CPI CARD GROUP INC., 10-K filed on 3/6/2020
Annual Report
v3.19.3.a.u2
Document and Entity Information - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Feb. 20, 2020
Jun. 30, 2019
Document and Entity Information      
Entity Registrant Name CPI Card Group Inc.    
Entity Central Index Key 0001641614    
Document Type 10-K    
Document Period End Date Dec. 31, 2019    
Amendment Flag false    
Current Fiscal Year End Date --12-31    
Entity Interactive Data Current Yes    
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Well-known Seasoned Issuer No    
Entity Filer Category Non-accelerated Filer    
Entity Common Stock, Shares Outstanding   11,224,191  
Entity Public Float     $ 11.0
Entity Small Business true    
Entity Emerging Growth Company true    
Entity Ex Transition Period true    
Entity Shell Company false    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
v3.19.3.a.u2
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 18,682 $ 20,291
Accounts receivable, net of allowances of $395 and $211, respectively 42,832 43,794
Inventories 20,192 9,827
Prepaid expenses and other current assets 6,345 4,997
Income taxes receivable 4,164 5,564
Total current assets 92,215 84,473
Plant, equipment, leasehold improvements and operating lease right-of-use assets, net 42,088 39,110
Intangible assets, net 30,802 35,437
Goodwill 47,150 47,150
Other assets 1,232 1,034
Total assets 213,487 207,204
Current liabilities:    
Accounts payable 16,482 16,511
Accrued expenses 22,820 23,853
Deferred revenue and customer deposits 468 912
Total current liabilities 39,770 41,276
Long-term debt 307,778 305,818
Deferred income taxes 6,896 5,749
Other long-term liabilities 11,478 3,937
Total liabilities 365,922 356,780
Commitments and contingencies (Note 14)
Series A Preferred Stock: $0.001 par value-100,000 shares authorized: 0 shares issued and outstanding at December 31, 2019 and 2018
Stockholders’ deficit:    
Common Stock; $0.001 par value—100,000,000 shares authorized; 11,224,191 shares issued and outstanding and 11,160,377 shares issued and outstanding at December 31, 2019 and 2018, respectively 11 11
Capital deficiency (111,988) (112,223)
Accumulated loss (40,458) (36,004)
Accumulated other comprehensive loss   (1,360)
Total stockholders’ deficit (152,435) (149,576)
Total liabilities and stockholders’ deficit $ 213,487 $ 207,204
v3.19.3.a.u2
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Consolidated Balance Sheets    
Allowance on accounts receivable $ 395 $ 211
Preferred shares, par value (in dollars per share) $ 0.001 $ 0.001
Preferred shares, authorized shares (in shares) 100,000 100,000
Preferred shares, issued shares (in shares) 0 0
Preferred shares, outstanding shares (in shares) 0 0
Common shares, par value (in dollars per share) $ 0.001 $ 0.001
Common shares, authorized shares (in shares) 100,000,000 100,000,000
Common shares, issued shares (in shares) 11,224,191 11,160,377
Common shares, outstanding shares (in shares) 11,224,191 11,160,377
v3.19.3.a.u2
Consolidated Statements of Operations and Comprehensive Loss - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Net sales:    
Net Sales $ 278,073 $ 255,814
Cost of sales:    
Depreciation and amortization 10,971 12,417
Total cost of sales 186,754 177,224
Gross profit 91,319 78,590
Operating expenses:    
Selling, general and administrative (exclusive of depreciation and amortization shown below) 65,744 68,014
Depreciation and amortization 6,031 5,988
Litigation settlement gain (6,000)  
Total operating expenses, net 65,775 74,002
Income from operations 25,544 4,588
Other expense, net:    
Interest, net (24,891) (23,431)
Foreign currency loss (1,327) (311)
Other income (expense), net (4) 16
Total other expense, net (26,222) (23,726)
Loss before income taxes (678) (19,138)
Income tax (expense) benefit (3,652) 4,339
Net loss from continuing operations (4,330) (14,799)
Net loss from discontinued operation, net of taxes (124) (22,663)
Net loss $ (4,454) $ (37,462)
Basic and diluted loss per share:    
Basic and diluted loss per share Basic and diluted - Continuing operations (in dollar per share) $ (0.39) $ (1.33)
Basic and diluted loss per share Basic and diluted - Discontinuing operations (in dollar per share) (0.01) (2.03)
Loss per share (in dollars per share) $ (0.40) $ (3.36)
Basic and diluted weighted-average shares outstanding (in shares) 11,196,710 11,149,554
Comprehensive loss    
Net loss $ (4,454) $ (37,462)
Reclassification adjustment to foreign currency loss 1,329  
Other comprehensive loss from discontinued operations   3,983
Currency translation adjustment 31 (205)
Total comprehensive loss (3,094) (33,684)
Products    
Net sales:    
Net Sales 143,941 125,069
Cost of sales:    
Products and Services (exclusive of depreciation and amortization shown below) 94,889 82,110
Services    
Net sales:    
Net Sales 134,132 130,745
Cost of sales:    
Products and Services (exclusive of depreciation and amortization shown below) $ 80,894 $ 82,697
v3.19.3.a.u2
Consolidated Statements of Stockholders' Deficit - USD ($)
$ in Thousands
ASC 606
Accumulated loss
ASC 606
Common Stock
Capital deficiency
Accumulated loss
Accumulated other comprehensive loss
Total
Beginning balance at Dec. 31, 2017     $ 11 $ (113,081) $ (1,366) $ (5,138) $ (119,574)
Beginning balance (in shares) at Dec. 31, 2017     11,134,714        
Adoption of ASC 606 $ 2,824 $ 2,824          
Shares issued under stock-based compensation plans (in shares)     25,663        
Stock-based compensation       858     858
Components of comprehensive (loss) income:              
Net loss         (37,462)   (37,462)
Other comprehensive loss from discontinued operations           3,983 3,983
Currency translation adjustment           (205) (205)
Ending balance at Dec. 31, 2018     $ 11 (112,223) (36,004) (1,360) $ (149,576)
Ending balance (in shares) at Dec. 31, 2018     11,160,377       11,160,377
Shares issued under stock-based compensation plans (in shares)     63,814        
Stock-based compensation       235     $ 235
Components of comprehensive (loss) income:              
Net loss         (4,454)   (4,454)
Reclassification adjustment to foreign currency loss           1,329 1,329
Currency translation adjustment           $ 31 31
Ending balance at Dec. 31, 2019     $ 11 $ (111,988) $ (40,458)   $ (152,435)
Ending balance (in shares) at Dec. 31, 2019     11,224,191       11,224,191
v3.19.3.a.u2
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Operating activities    
Net loss $ (4,454) $ (37,462)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Loss from discontinued operations 124 22,663
Depreciation and amortization expense 17,002 18,405
Stock-based compensation expense 250 961
Amortization of debt issuance costs and debt discount 1,960 1,949
Deferred income tax 1,147 (6,897)
Reclassification adjustment to foreign currency loss 1,329  
Other, net 146 302
Changes in operating assets and liabilities:    
Accounts receivable (688) (5,523)
Inventories (10,410) (1,998)
Prepaid expenses and other assets (1,328) (2,108)
Income taxes 1,369 2,644
Accounts payable 1,127 2,411
Accrued expenses (4,395) 10,436
Deferred revenue and customer deposits (446) 632
Other liabilities 232 655
Cash provided by operating activities - continuing operations 2,965 7,070
Cash used in operating activities -discontinued operations (124) (3,550)
Investing activities    
Acquisitions of plant, equipment and leasehold improvements (4,175) (5,634)
Cash received from sale of Canadian subsidiary 1,451  
Other 150  
Cash used in investing activities - continuing operations (2,574) (5,634)
Cash used in investing activities - discontinued operations 0 (220)
Financing activities    
Proceeds from revolving credit facility 11,500  
Principal payment on revolving credit facility (11,500)  
Payments on financing leases (1,926) (519)
Cash used in financing activities (1,926) (519)
Effect of exchange rates on cash 50 (61)
Net decrease in cash and cash equivalents: (1,609) (2,914)
Cash and cash equivalents, beginning of period 20,291 23,205
Cash and cash equivalents, end of period 18,682 20,291
Supplemental disclosures of cash flow information    
Cash paid (refunded) during the period for: Interest 23,036 20,703
Cash paid (refunded) during the period for: Income tax (refunds) payments, net 780 (657)
Right-of-use assets obtained in exchange for lease obligations- Operating leases 8,533  
Right-of-use assets obtained in exchange for lease obligations- Financing leases 6,438 1,812
Accounts payable and accrued expenses for acquisitions of plant, equipment and leasehold improvements $ 308 $ 1,339
v3.19.3.a.u2
Business
12 Months Ended
Dec. 31, 2019
Business  
Business

1. Business

CPI Card Group Inc., (which, together with its subsidiary companies, is referred to herein as “CPI” or the “Company”) is engaged in the design, production, data personalization, packaging and fulfillment of Financial Payment Cards, which the Company defines as credit cards, debit cards and prepaid debit cards issued on the networks of the Payment Card Brands (Visa, Mastercard, American Express and Discover) and Interac (in Canada). The Company also offers an instant card issuance system and services, which provides card issuing bank customers the ability to issue a personalized debit or credit card within the bank branch to individual cardholders.

As a producer and provider of services for Financial Payment Cards, each of the Company’s secure facilities must be compliant and registered with one or more of the Payment Card Brands and is therefore subject to specific requirements and conditions. Noncompliance with these requirements would prohibit the individual facilities of the Company from producing Financial Payment Cards for these entities’ payment card issuers.

In the fourth quarter of 2018, the Company entered into a definitive agreement to sell the Canadian subsidiary. The sale agreement did not include the portions of the business relating to Financial Payment Cards, as that business migrated to the Company’s operations in the U.S. or to other service providers in 2019. The transaction closed on April 1, 2019, and the Company received cash proceeds of $1,451.  After the payment of liabilities and transaction costs, including employee termination costs, the sale did not have a significant impact on cash, and no significant loss on sale.  In connection with the disposition of the foreign entity, the Company released the related cumulative translation adjustment from “Accumulated Other Comprehensive Loss” on the Balance Sheet into income from continuing operations during the year ended December 31, 2019. This adjustment was $1,329 and is included in “Foreign Currency Loss” on the Statement of Operations.  The Canadian subsidiary was not a significant operating segment and was part of the Other reportable segment

On August 3, 2018, the Company completed the sale of the U.K. Limited segment. The historical financial position, results of operations, and cash flows for the U.K. segment have been restated for all periods to conform with discontinued operations presentation. Unless otherwise indicated, financial information within this document relates to continuing operations.

In 2018, the Company consolidated three personalization operations in the United States into two facilities to better enable the Company to optimize operations and achieve market-leading quality and service with a market-competitive business model. In conjunction with this decision, the Company accelerated the depreciation of certain related assets, which totaled $2,398 for the year ended December 31, 2018. The Company recorded severance charges of $552, and recorded lease termination charges of $476 during the year ended December 31, 2018. The charges were recorded in the U.S. Debit and Credit segment and were included in “Cost of sales” and “Selling, general and administrative” expenses on the Consolidated Statement of Operations.

The Company’s business consists of the following reportable segments: U.S. Debit and Credit, U.S. Prepaid Debit and Other.

U.S. Debit and Credit Segment

The U.S. Debit and Credit segment primarily produces Financial Payment Cards and provides integrated card services to card-issuing banks in the United States. Products manufactured by this segment primarily include EMV and non-EMV Financial Payment Cards, including contact, contactless, and dual-interface cards, CPI MetalsTM, a premium metal card and Second WaveTM payment cards featuring a core made with recovered ocean-bound plastic.  The Company also sells instant card issuance solutions, and Private Label Credit Cards that are not issued on the networks of the Payment Cards Brands. The Company provides CPI On-Demand services, and produces images, personalized payment cards, and related collateral on a one-by-one, on demand basis for its customers. This segment also provides a variety of integrated card services, including card personalization and fulfillment services and instant issuance solutions. The U.S. Debit and Credit segment operations are each audited for compliance by multiple Payment Card Brands. Many customers require the Company to comply with the standards of the PCI Security Standards Council.

U.S. Prepaid Debit Segment

The U.S. Prepaid Debit segment primarily provides integrated card services to Prepaid Debit Card providers 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 U.S. Prepaid Debit segment operation is audited for compliance by multiple Payment Card Brands. Many customers require the Company to comply with the standards of the PCI Security Standards Council.

Other

The Other segment includes corporate expenses and a less significant operation that generated sales from the production of Financial Payment Cards and retail gift cards, and card personalization and fulfillment services in Canada, prior to its sale. The sale agreement did not include the portions of the business relating to Financial Payment Cards, as those business customers of the Canadian subsidiary migrated to the Company’s operations in the U.S. or to other service providers in 2019.

 

v3.19.3.a.u2
Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2019
Summary of Significant Accounting Policies  
Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying Consolidated Financial Statements include the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents and they are stated at cost, which approximates fair value.

Trade Accounts Receivable and Concentration of Credit Risk

Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company performs ongoing credit evaluations of its customers and generally requires no collateral to secure accounts receivable.

 

 

 

 

 

 

 

 

    

December 31, 2019

    

December 31, 2018

Trade accounts receivable

 

$

39,004

 

$

36,428

Unbilled accounts receivable

 

 

4,223

 

 

7,577

 

 

 

43,227

 

 

44,005

Less allowance for doubtful accounts

 

 

(395)

 

 

(211)

 

 

$

42,832

 

$

43,794

 

The Company maintains an allowance for potentially uncollectible accounts receivable based upon its assessment of the collectability of accounts receivable. Accounts are written off against the allowance when it is determined collection will not occur. The allowance for bad debt activity for the years ended December 31, 2019 and 2018 is summarized as follows:

 

 

 

 

 

 

Balance as of December 31, 2017

    

$

48

 

Bad debt expense

 

 

169

 

Write-off of uncollectible accounts

 

 

(6)

 

Balance as of December 31, 2018

 

$

211

 

Bad debt expense

 

 

228

 

Write-off of uncollectible accounts

 

 

(37)

 

Currency translation adjustments

 

 

(7)

 

Balance as of December 31, 2019

 

$

395

 

 

The increase in bad debt expense during 2019 primarily relates to reserves established for outstanding receivables from the Company’s Canadian operations that were disposed on April 1, 2019.

For the year ended December 31, 2019 one customer represented 18% of the Company’s consolidated net sales. For the year ended December 31, 2018 one customer represented 19% of the Company’s consolidated net sales.

Inventories

Inventories consist of raw materials, and finished goods and are measured at the lower of cost or net realizable value (determined on the first-in, first-out, specific identification or weighted-average method basis). Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Finished goods inventory represents primarily stock cards and Card@Once printers.  The stock cards are ready to be personalized as customer orders are received.

Plant, Equipment and Leasehold Improvements

Plant, equipment and leasehold improvements are recorded at cost. Accumulated depreciation is computed using the straight-line method over the lesser of the estimated useful life of the related assets (generally 3 to 10 years for machinery and equipment, furniture, computer equipment, and leasehold improvements) or, when applicable, the lease term. Maintenance and repairs that do not extend the useful life of the respective assets are charged to expense as incurred.

Long-lived assets with finite lives are reviewed for impairment whenever events indicate that the carrying amount of the asset or the carrying amounts of the asset group containing the asset may not be recoverable. In such reviews, estimated undiscounted future cash flows associated with these assets or asset groups are compared with their carrying value to determine if a write-down to fair value is required. 

Goodwill and Intangible Assets

 Goodwill is not amortized, but instead is tested for impairment at least annually on October 1 or more frequently when an event occurs or circumstances change that indicates the carrying value may not be recoverable. For impairment evaluations, the Company first makes a qualitative assessment with respect to goodwill. During 2017, the Company early adopted ASU 2017-04,  Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) in conjunction with its annual impairment testing effective October 1, 2017. In accordance with ASU 2017-04,  an entity should perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value.

During the year-ended December 31, 2019, the Company’s reporting units for goodwill impairment testing changed, based on the Company’s chief operating decision maker’s review of financial information and allocation of resources. As a result of this change in reporting units for goodwill impairment testing, the Company allocated goodwill, on a relative fair value, to the new reporting units.  All of the Company’s goodwill is included in the U.S. Debit and Credit segment.

The Company generally bases its measurement of the fair value of a reporting unit on a blended analysis of the present value of future discounted cash flows and the market valuation approach. The discounted cash flows model indicates the fair value of the reporting unit based on the present value of the cash flows that the Company expects the reporting unit to generate in the future. The Company's significant estimates in the discounted cash flows model include: its weighted average cost of capital; discrete and long-term rate of growth and profitability of the reporting unit's business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the reporting unit to publicly traded companies in similar lines of business. Significant estimates in the market valuation approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment, and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting unit.

Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets, and are reviewed for impairment whenever events indicate that the carrying amount of the asset may not be recoverable. In such reviews, estimated undiscounted future cash flows associated with these assets are compared with their carrying value to determine if a write-down to fair value is required.    

Income Taxes

The Company accounts for income taxes using an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

The Company has deferred tax assets and liabilities and maintains valuation allowances where it is more likely than not that all or a portion of deferred tax assets will not be realized. To the extent the Company determines that it will not realize the benefit of some or all of its deferred tax assets, then these deferred tax assets will be adjusted through the Company’s income tax expense in the period in which this determination is made.

The Company recognizes the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position, that the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.  The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense.

Stock-Based Compensation

The Company accounts for stock-based compensation pursuant to ASC 718, Share-Based Payments. All stock-based compensation to employees is required to be measured at fair value and expensed over the requisite service period. The Company accounts for forfeitures as they occur and reverses previously recognized expense for the unvested portion of the forfeited shares.  The Company recognizes compensation expense on awards on a straight-line basis over the vesting period for each tranche of an award. Refer to Note 16 “Stock Based Compensation” for additional discussion regarding details of the Company's stock-based compensation plans.

Net Sales

Products Net Sales

“Products” net sales are recognized when obligations under the terms of a contract with a customer are satisfied. In most instances, this occurs over time as cards are manufactured for specific customers, have no alternative use, and the Company has an enforceable right to payment for work performed. For work performed but not completed and unbilled, the Company estimates revenue by taking actual costs incurred and applying historical margins for similar types of contracts. Items included in “Products” revenue are the design and production of Financial Payment Cards, including contact-EMV, Dual-Interface EMV®, metal, contactless and magnetic stripe cards, private label credit cards and retail gift cards. Card@Once® printers and consumables are also included in “Products” net sales, and their associated revenues are recognized at the time of shipping. The Company includes gross shipping and handling revenue in net sales, and shipping and handling costs in cost of sales.

 

Services Net Sales

 

Revenue is recognized for “Services” as the services are performed. Items included in “Services” net sales include the personalization and fulfillment of Financial Payment Cards, providing tamper-evident secure packaging and fulfillment services to Prepaid Debit Card program managers, and software as a service personalization of instant issuance debit cards. The Company also generates “Service” revenue usage-fees from the Company’s patented card design software, known as MYCA, which provides customers and cardholders the ability to design cards on the internet and customize cards with individualized digital images. “Services” revenue is also generated from personalizing retail gift cards historically in Canada prior to disposition. As applicable, for work performed but not completed and unbilled, the Company estimates revenue by taking actual costs incurred and applying historical margins for similar types of contracts.

 

Customer Contracts

The Company often enters into Master Services Agreements (“MSAs”) with its customers. Generally, enforceable rights and obligations for goods and services occur only when a customer places a purchase order or statement of work to obtain goods or services under an MSA. The contract term as defined by ASU 2014-09 is the length of time it takes to deliver the goods or services promised under the purchase order or statement of work. As such, the Company's contracts are generally short term in nature.

 

Use of Estimates

The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These accounting principles require management to make assumptions and estimates relating to the reporting of assets and liabilities in its preparation of the Consolidated Financial Statements. Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, goodwill and intangible assets, leases, valuation allowances for inventories and deferred taxes, revenue recognized for work performed but not completed, and uncertain tax positions. Actual results could differ from those estimates.

Foreign Currency Translation

Financial statements of foreign subsidiaries that use local currencies as their functional currency are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and the weighted-average exchange rate for each reporting period for net sales, expenses, gains and losses. Translation adjustments are recorded as a component of Accumulated Other Comprehensive Loss in the accompanying consolidated financial statements. Subsequent to the sale of the UK Ltd. Segment and Canada, the Company has no significant foreign subsidiaries.

Foreign currency transaction gains and losses resulting from the process of re-measurement are recorded in “Foreign currency loss” in the accompanying Consolidated Statements of Operations and Comprehensive Loss. For the years ended December 31, 2019 and 2018 there were ($1,327) and ($311) of such foreign currency losses, respectively. During the year ended December 31, 2019, in connection with the sale of the Company’s Canada subsidiary, the Company released the related cumulative translation adjustment of $1,329 from “Accumulated Other Comprehensive Loss” on the Balance Sheet into net loss from continuing operations. 

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASC Topic 842, Leases (“ASC 842”), which provides guidance for accounting for leases. The new guidance requires companies to recognize the assets and liabilities for the rights and obligations created by leased assets. ASC 842 is effective for annual and interim periods beginning after December 15, 2018 (the Company’s fiscal year 2019) with early adoption permitted.  The guidance required a modified retrospective approach, with an option to apply the transition provisions of the new guidance at the adoption date without adjusting the comparative periods presented. In July 2018, the FASB issued additional accounting standard updates clarifying certain provisions, as well as providing for a second transition method allowing entities to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings. 

The Company adopted the new guidance on the effective date of January 1, 2019 and used the adoption date as the date of initial application as allowed under ASC 842. Consequently, historical financial information has not been updated and the disclosures required under the new standard have not be provided for dates and periods before January 1, 2019.

The new standard provides a number of optional practical expedients in transition. The Company elected the ‘package of practical expedients’, which permits the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs. The Company did not elect the use-of-hindsight transition practical expedient.

The new standard also provides practical expedients for the Company’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify, meaning the Company will not recognize right-of-use assets or lease liabilities for existing and new lease agreements as applicable. The Company also elected the practical expedient to not separate lease and non-lease components for all of its leases.

Right-of-use (“ROU’) represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. If applicable, the Company used the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives.

A lease is deemed to exist when the Company has the right to control the use of identified property, plant or equipment, as conveyed through a contract, for a certain period of time and consideration paid. The right to control is deemed to occur when the Company has the right to obtain substantially all of the economic benefits of the identified assets and the right to direct the use of such assets.

As a result of the adoption of ASC 842 the Company recorded $8,025 of operating ROU assets, and corresponding operating lease liabilities of $8,813 on January 1, 2019, relating to existing real estate operating leases.

The components of operating and finance lease costs for the year ended December 31, 2019 were as follows:

 

 

 

 

 

 

 

 

 

Year Ended
December 31, 2019

Total operating lease costs

 

 

$

2,625

 

 

 

 

 

Finance lease cost:

 

 

 

 

  Amortization of right-of-use assets

 

 

$

886

  Interest on lease liabilities

 

 

 

290

  Total financing lease costs

 

 

$

1,176

 

The following table reflects balances for operating leases and financing leases:

 

 

 

 

 

    

December 31, 2019

Operating leases

 

 

 

Operating lease right-of-use assets, net of amortization

 

$

6,312

 

 

 

 

Operating lease liability (current)

 

$

2,283

Long-term operating liability

 

 

5,067

  Total operating lease liabilities

 

$

7,350

 

 

 

 

Financing leases

 

 

 

Property, equipment and leasehold improvements

 

$

8,256

Accumulated depreciation

 

 

(1,094)

  Total financing leases in property, equipment and leasehold improvements, net

 

$

7,162

 

 

 

 

Financing lease liability (current)

 

$

2,211

Long-term financing liability

 

 

3,886

  Total financing lease liabilities

 

$

6,097

 

Finance and operating lease right-of-use assets are recorded in “Plant, equipment and leasehold improvements, net”. Financing and operating lease liabilities are recorded in “Accrued expenses” and “Other long-term liabilities”.

Components of lease expense were as follows:

 

 

 

 

 

 

 

 

December 31, 2019

Weighted Average Remaining Lease Term

 

 

 

  Operating Leases

 

 

3.40

  Financing Leases

 

 

2.86

 

 

 

 

Weighted Average Discount Rate

 

 

 

  Operating Leases

 

 

8.94%

  Financing Leases

 

 

9.28%

 

Future cash payments with respect to lease obligations as of December 31, 2019 were as follows:

 

 

 

 

 

 

 

 

 

 

Operating

 

 

Financing

 

 

 

Lease

 

 

Leases

Year Ending

 

 

 

 

 

 

2020

 

$

2,854

 

$

2,659

2021

 

 

2,646

 

 

2,043

2022

 

 

1,371

 

 

1,565

2023

 

 

1,097

 

 

676

2024

 

 

602

 

 

 —

  Total lease payments

 

 

8,570

 

 

6,943

Less imputed interest

 

 

(1,220)

 

 

(846)

  Total 

 

$

7,350

 

$

6,097

 

Future cash payments with respect to lease obligations as of December 31, 2018 were as follows:

 

 

 

 

 

 

 

 

    

Operating

    

Capital

 

 

Leases

 

Leases

2019

 

$

2,927

 

$

521

2020

 

 

2,771

 

 

474

2021

 

 

2,512

 

 

243

2022

 

 

1,243

 

 

256

2023

 

 

971

 

 

71

Thereafter

 

 

652

 

 

 —

Total

 

$

11,076

 

$

1,565

 

Cash paid on operating leases was $1,973 during the year ended December 31, 2019.

 

As of January 1, 2018, the Company adopted Accounting Standards Update Codification ASC 606, Revenue from Contracts with Customers, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also requires an entity to disclose sufficient quantitative and qualitative information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company applied ASC 606 as of January 1, 2018 to all its contracts using the modified retrospective method and recognized the cumulative effect of adoption as an adjustment to the opening balance of “Accumulated loss” on the Consolidated Balance Sheet. Under the new guidance, the Company recognizes certain performance obligations over time as the goods are produced, since those products provide value to only a specified customer, have no alternative use and the Company has the right to payment for work completed on such items. This accelerates the timing of revenue recognition for these arrangements, as revenue is recognized as goods are produced rather than upon shipment or delivery of goods. See Note 3 “Net Sales” for revenue recognition timing and methodology under ASC 606. 

 

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). This ASU changes the model for the recognition of credit losses from an incurred loss model, which recognized credit losses only if it was probable that a loss had been incurred, to an expected loss model, which requires the Company to estimate the total credit losses expected on the portfolio of financial instruments. This standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company does not anticipate the adoption of this standard will have a material impact on the Company’s consolidated financial position, results of operations, and cash flows.

v3.19.3.a.u2
Net Sales
12 Months Ended
Dec. 31, 2019
Net Sales.  
Net Sales

3. Net Sales

 

The Company disaggregates its net sales by major source as follows:

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2019

 

 

Products

 

Services

 

Total

U.S. Debit and Credit

 

$

144,541

 

$

68,600

 

$

213,141

U.S. Prepaid Debit

 

 

 —

 

 

64,330

 

 

64,330

Other

 

 

396

 

 

1,283

 

 

1,679

Intersegment eliminations

 

 

(996)

 

 

(81)

 

 

(1,077)

Total

 

$

143,941

 

$

134,132

 

$

278,073

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2018

 

 

Products

 

Services

 

Total

U.S. Debit and Credit

 

$

122,119

 

$

56,478

 

$

178,597

U.S. Prepaid Debit

 

 

 —

 

 

69,199

 

 

69,199

Other

 

 

4,398

 

 

5,493

 

 

9,891

Intersegment eliminations

 

 

(1,448)

 

 

(425)

 

 

(1,873)

Total

 

$

125,069

 

$

130,745

 

$

255,814

 

Products Net Sales

Products” net sales are recognized when obligations under the terms of a contract with a customer are satisfied. In most instances, this occurs over time as cards are manufactured for specific customers and have no alternative use and the Company has an enforceable right to payment for work performed. For work performed but not completed and unbilled, the Company estimates revenue by taking actual costs incurred and applying historical margins for similar types of contracts. Items included in “Products” revenue are manufactured Financial Payment Cards, including in contact-EMV, Dual-Interface EMV, contactless and magnetic stripe cards, Second Wave, metal, private label credit cards and retail gift cards. Card@Once printers and consumables are also included in “Products” revenue, and their associated revenues are recognized at the time of shipping. The Company includes gross shipping and handling revenue in net sales, and shipping and handling costs in cost of sales.

Services Net Sales

Net sales are recognized for “Services” as the services are performed. Items included in “Services” net sales include the personalization and fulfillment of Financial Payment Cards, providing tamper-evident secure packaging and fulfillment services to Prepaid Debit Card program managers and software as a service personalization of instant issuance debit cards. For work performed but not completed and unbilled, the Company estimates revenue by taking actual costs incurred and applying historical margins for similar types of contracts.

Customer Contracts

The Company often enters into Master Services Agreements (“MSAs”) with its customers. Generally, enforceable rights and obligations for goods and services occur only when a customer places a purchase order or statement of work to obtain goods or services under an MSA. The contract term as defined by ASC 606 is the length of time it takes to deliver the goods or services promised under the purchase order or statement of work. As such, the Company's contracts are generally short term in nature.

v3.19.3.a.u2
Discontinued Operation
12 Months Ended
Dec. 31, 2019
Discontinued Operation  
Discontinued Operation

4. Discontinued Operation

On August 3, 2018, the Company completed the sale of its United Kingdom facilities that comprised the U.K. Limited reporting segment. The Company did not retain significant continuing involvement with the discontinued operation subsequent to the disposal. In connection with the sale, the Company performed a goodwill impairment test and recorded a charge of $6,366 in the second quarter of 2018.  The impairment was a result of continued market softness in the U.K. Limited segment, resulting in lower sales and margins and an expected sales price below the carrying value of the segment. The Company also recorded an impairment charge of $1,249 to customer relationship intangible assets related to the U.K. Limited segment in the second quarter of 2018.

The Company recorded a $7,248 loss on sale of U.K Limited for the year ended December 31, 2018.  In connection with the substantial liquidation of the foreign entity, the Company released the related cumulative translation adjustment from accumulated other comprehensive loss into loss from discontinued operations.  This adjustment was $3,983 and is included in other expense (income), net in the schedule below.

The major line items constituting the loss of the discontinued operation for the year ended December 31, 2019 and 2018 were as follows:

 

 

 

 

 

 

 

 

 

 

For the year ended

 

 

December 31, 

 

 

2019

 

2018

Total net sales

 

$

 —

 

$

10,741

Total cost of sales

 

 

 —

 

 

10,222

Selling, general and administrative

 

 

142

 

 

4,336

Impairments

 

 

 —

 

 

7,615

Other expense (income), net

 

 

 —

 

 

4,006

Pretax loss from discontinued operation

 

 

(142)

 

 

(15,438)

  Pretax loss on sale of discontinued operation

 

 

 —

 

 

(7,248)

Total pretax loss on discontinued operation

 

 

(142)

 

 

(22,686)

Income tax benefit

 

 

18

 

 

23

Net loss from discontinued operation

 

$

(124)

 

$

(22,663)

 

v3.19.3.a.u2
Inventories
12 Months Ended
Dec. 31, 2019
Inventories  
Inventories

5. Inventories

 

Inventories are summarized below:

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2019

    

2018

 

Raw materials

 

$

16,492

 

$

8,235

 

Finished goods

 

 

5,047

 

 

2,991

 

Inventory reserve

 

 

(1,347)

 

 

(1,399)

 

 

 

$

20,192

 

$

9,827

 

 

v3.19.3.a.u2
Plant, Equipment, Leasehold Improvements and Operating Lease Right-of-use Assets
12 Months Ended
Dec. 31, 2019
Plant, Equipment, Leasehold Improvements and Operating Lease Right-of-use Assets  
Plant, Equipment, Leasehold Improvements and Operating Lease Right-of-use Assets

 

6. Plant, Equipment, Leasehold Improvements and Operating Lease Right-of-use Assets

 

Plant, equipment, leasehold improvements and operating lease right-of-use assets consist of the following:

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2019

    

2018

 

Machinery and equipment

 

$

52,212

 

$

62,067

 

Machinery and equipment under financing leases

 

 

8,256

 

 

1,812

 

Furniture, fixtures and computer equipment

 

 

4,749

 

 

7,730

 

Leasehold improvements

 

 

14,905

 

 

19,651

 

Construction in progress

 

 

455

 

 

1,596

 

 

 

 

80,577

 

 

92,856

 

Less accumulated depreciation and amortization

 

 

(44,801)

 

 

(53,746)

 

Operating lease right-of-use assets, net of accumulated amortization

 

 

6,312

 

 

 —

 

 

 

$

42,088

 

$

39,110

 

 

Amounts recorded for the depreciation of plant, equipment and leasehold improvements were $12,384 and $13,749 for the years ended December 31, 2019 and 2018, respectively.

 

There were no impairments of the Company’s plant, equipment, and leasehold improvement assets for the continuing operations of the Company for the years ended December 31, 2019 and 2018.

v3.19.3.a.u2
Goodwill and Other Intangible Assets
12 Months Ended
Dec. 31, 2019
Goodwill and Other Intangible Assets  
Goodwill and Other Intangible Assets

7. Goodwill and Other Intangible Assets

 

All of the Company’s $47,150 of goodwill is included in the U.S. Debit and Credit segment at December 31, 2019 and 2018.

 

 In connection with the sale of the Company’s U.K. Limited segment, the Company performed a goodwill impairment test and recorded a charge of $6,366 in discontinued operations during the year ended December 31, 2018.  The impairment was a result of continued market softness in the U.K. operations, resulting in lower sales and margins and an expected sale price below the carrying value of the segment.

The Company completed its goodwill impairment testing as of October 1, 2019, and no impairments were recognized as a result of this analysis.

CPI’s amortizable intangible assets consist of customer relationships, technology and software, and trademarks. Total intangible assets are being amortized over a weighted-average useful life of 15.7 years. Intangible amortization expense totaled $4,635 and $4,656 for the years ended December 31, 2019 and 2018, respectively.  During the year ended December 31, 2019 there were no impairments of the Company’s amortizable intangible assets.  The Company recorded an impairment charge of $1,249 to customer relationship intangible assets related to the U.K. Limited segment in the second quarter of 2018, which is reported in discontinued operations.

Intangible assets consist of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

December 31, 2018

 

 

    

Weighted Average

    

 

    

Accumulated

    

Net Book

    

 

    

Accumulated

    

Net Book

 

 

 

Life (Years)

 

Cost

 

Amortization

 

Value

 

Cost

 

Amortization

 

Value

 

Customer relationships

 

17.2

 

$

55,454

 

 

(28,865)

 

$

26,589

 

$

55,454

 

$

(25,587)

 

$

29,867

 

Technology and software

 

 8

 

 

7,101

 

 

(4,952)

 

 

2,149

 

 

7,101

 

 

(4,024)

 

 

3,077

 

Trademarks

 

8.7

 

 

3,330

 

 

(1,266)

 

 

2,064

 

 

3,330

 

 

(877)

 

 

2,453

 

Noncompete agreements

 

 5

 

 

491

 

 

(491)

 

 

 —

 

 

491

 

 

(451)

 

 

40

 

Intangible assets subject to amortization

 

 

 

$

66,376

 

$

(35,574)

 

$

30,802

 

$

66,376

 

$

(30,939)

 

$

35,437

 

 

The estimated future aggregate amortization expense for the identified amortizable intangibles noted above as of December 31, 2019 is as follows:

 

 

 

 

 

2020

 

$

4,595

2021

    

 

4,352

2022

 

 

3,867

2023

 

 

3,867

2024

 

 

3,530

Thereafter

 

 

10,591

 

 

$

30,802

 

v3.19.3.a.u2
Fair Value of Financial Instruments
12 Months Ended
Dec. 31, 2019
Fair Value of Financial Instruments  
Fair Value of Financial Instruments

 

8. Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). In determining fair value, the Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

·

Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

·

Level 2—Inputs, other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

·

Level 3—Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

The Company’s financial assets and liabilities that are not required to be remeasured at fair value in the Consolidated Balance Sheets are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrying

 

 

 

Fair Value Measurement at

 

 

 

Value as of

 

Fair Value as of

 

December 31, 2019

 

 

 

December 31,

 

December 31,

 

(Using Fair Value Hierarchy)

 

 

    

2019

    

2019

    

Level 1

    

Level 2

    

Level 3

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Lien Term Loan

 

$

312,500

 

$

234,375

 

$

 

$

234,375

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrying

 

 

 

Fair Value Measurement at

 

 

 

Value as of

 

Fair Value as of

 

December 31, 2018

 

 

 

December 31,

 

December 31,

 

(Using Fair Value Hierarchy)

 

 

    

2018

    

2018

    

Level 1

    

Level 2

    

Level 3

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Lien Term Loan

 

$

312,500

 

$

203,125

 

$

 

$

203,125

 

$

 

 

The aggregate fair value of the Company’s First Lien Term Loan, as defined in Note 10, “Long-Term Debt and Credit Facility,” was based on bank quotes.

The carrying amounts for cash and cash equivalents approximate fair value due to their short maturities.

Nonrecurring fair value measurements include the Company’s goodwill and intangible asset impairments recognized during the year ended December 31, 2018, as determined based on unobservable Level 3 inputs.  Refer to Note 7, “Goodwill and Other Intangible Assets”, and Note 4, “Discontinued Operations”.

v3.19.3.a.u2
Accrued Liabilities
12 Months Ended
Dec. 31, 2019
Accrued Liabilities  
Accrued Liabilities

9. Accrued Liabilities

 

Accrued liabilities consisted of the following:

 

 

 

 

 

 

 

 

 

    

December 31, 2019

    

December 31, 2018

 

 

 

 

 

 

    

Accrued payroll and related employee expenses

 

$

3,954

 

$

4,040

Accrued employee performance bonus

 

 

3,920

 

 

7,137

Accrued Interest

 

 

4,951

 

 

5,058

Operating and financing lease liability (current portion)

 

 

4,494

 

 

521

Other

 

 

5,501

 

 

7,097

Total accrued expenses

 

$

22,820

 

$

23,853

 

v3.19.3.a.u2
Long-Term Debt and Credit Facility
12 Months Ended
Dec. 31, 2019
Long-Term Debt and Credit Facility  
Long-Term Debt and Credit Facility

10. Long-Term Debt and Credit Facility

 

Long-term debt consists of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Interest

 

December 31,

 

December 31,

 

 

 

Rate

    

2019

    

2018

    

First Lien Term Loan (a)

 

 

6.71%

 

$

312,500

 

$

312,500

 

Unamortized discount

 

 

 

 

 

(1,770)

 

 

(2,448)

 

Unamortized deferred financing costs

 

 

 

 

 

(2,952)

 

 

(4,234)

 

Total long-term debt

 

 

 

 

 

307,778

 

 

305,818

 

Less current maturities

 

 

 

 

 

 

 

 

Long-term debt, net of current maturities

 

 

 

 

$

307,778

 

$

305,818

 

(a)

Interest rate on December 31, 2019

 

First Lien Credit Facility

On August 17, 2015, the Company entered into the first lien credit facility (the “First Lien Credit Facility”) with a syndicate of lenders providing for a  $435,000 first lien term loan (the “First Lien Term Loan”) and a $40,000 revolving credit facility (the “Revolving Credit Facility”). The First Lien Term Loan matures August 17, 2022 and the Revolving Credit Facility was terminated on March 6, 2020.     

On March 6, 2020, the Company entered into a new $30,000 senior credit facility (the “Senior Credit Facility”),  which matures on May 17, 2022.  The Revolving Credit Facility was terminated concurrently with the closing of the new Senior Credit Facility on March 6, 2020.  Refer to Note 19- Subsequent Event for further information.

The Revolving Credit Facility was, and the First Lien Credit Facility is, secured by a first-priority security interest in substantially all of the Company's assets constituting equipment, inventory, receivables, cash and other tangible and intangible property.

Interest rates under the First Lien Term Loan are based, at the Company's election, on a Eurodollar rate, subject to an interest rate floor of 1.0%, plus a margin of 4.50% or a base rate plus a margin of 3.50%. The interest rate as of December 31, 2019 was 6.71%.

The First Lien Term Loan contains customary nonfinancial covenants, including among other things, restrictions on indebtedness, issuance of liens, investments, dividends, redemptions and other distributions to equity holders, asset sales, certain mergers or consolidations, sales, transfers, leases or dispositions of substantially all of the Company's assets and affiliate transactions. The First Lien Credit Facility also contained a requirement that, as of the last day of any fiscal quarter, if the amount the Company has drawn under the Revolving Credit Facility was greater than 50% of the aggregate principal amount of all commitments of the lenders thereunder, then the Company must maintain a first lien net leverage not in excess of 7.0 times adjusted EBITDA, as defined in the agreement.  As of December 31, 2019, the Company was in compliance with all covenants under the First Lien Credit Facility. 

The Revolving Credit Facility required, and the First Lien Term Loan also requires a  prepayment in advance of the maturity date upon the occurrence of certain customary events, including based on an annual excess cash flow calculation, pursuant to the terms of the agreement, with any required payments to be made after the issuance of the Company’s annual financial statements. The Company did not have a required excess cash flow payment related to 2019.  

In accordance with the terms of the First Lien Credit Facility, the Company repaid $112,500 of the First Lien Term Loan on October 15, 2015 in conjunction with the completion of its initial public offering, and an additional $10,000 during the fourth quarter of 2015.

As of December 31, 2019, the Company did not have any outstanding amounts under the Revolving Credit Facility, and had $19,950 available for borrowing. The interest rate on the Revolving Credit Facility was the Federal base rate plus 3.5%.  The Company had one outstanding letter of credit for $50 relating to the security deposit on a real property lease agreement under the terms of the Revolving Credit Facility. The Company paid a fee on outstanding letters of credit at the applicable margin, which was 4.5% as of December 31, 2019, in addition to a fronting fee of 0.125% per annum. In addition, the Company was required to pay an unused commitment fee ranging from 0.375% per annum to 0.50% per annum of the average unused portion of the revolving commitments. The Company accrued interest of $4,951 and $5,058 recorded within “Accrued expenses” on the Consolidated Balance Sheets as of December 31, 2019, and 2018, respectively.

Deferred Financing Costs and Discount

Certain costs and discounts incurred with borrowings or the establishment or modification of credit facilities are reflected as a reduction to the long-term debt balance. These costs are amortized as an adjustment to interest expense over the life of the borrowing using the effective-interest rate method.

v3.19.3.a.u2
Income Taxes
12 Months Ended
Dec. 31, 2019
Income Taxes  
Income Taxes

11. Income Taxes

 

Income tax (benefit) expense from continuing operations and effective income tax rates consist of the following:

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2019

    

2018

    

Current taxes:

 

 

 

 

 

 

 

Domestic

 

$

2,490

 

$

2,558

 

Foreign

 

 

15

 

 

 —

 

 

 

 

2,505

 

 

2,558

 

Deferred taxes:

 

 

 

 

 

 

 

Domestic

 

 

1,147

 

 

(6,897)

 

Foreign

 

 

 —

 

 

 —

 

 

 

 

1,147

 

 

(6,897)

 

Income tax expense (benefit)

 

$

3,652

 

$

(4,339)

 

Loss before income taxes

 

 

 

 

 

 

 

Domestic income (loss)

 

$

801

 

$

(18,383)

 

Foreign

 

 

(1,479)

 

 

(755)

 

Total

 

$

(678)

 

$

(19,138)

 

Effective income tax rate

 

 

(538.6)

%

 

22.7

%

 

The effective income tax rate differs from the U.S. federal statutory income tax rate as follows:

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

2019

    

2018

    

Tax at federal statutory rate

 

21.0

%

21.0

%

State income taxes

 

(114.8)

 

4.0

 

Foreign taxes

 

(51.9)

 

(0.1)

 

Tax benefit for U.K. sale

 

345.2

 

17.5

 

Valuation allowance

 

(474.7)

 

(13.5)

 

Unrecognized tax benefits

 

(34.5)

 

(4.8)

 

Tax credits

 

(108.4)

 

2.5

 

Deferred tax impact of enacted tax rate and law changes

 

 —

 

(0.7)

 

Permanent items

 

(120.6)

 

(1.8)

 

Other

 

0.1

 

(1.4)

 

Effective income tax rate

 

(538.6)

%

22.7

%

 

The components of the deferred tax assets and liabilities are as follows:

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2019

 

2018

 

Deferred tax assets:

 

 

 

 

 

 

 

Accrued expense

 

$

2,426

 

$

2,553

 

Net operating loss carryforward

 

 

1,216

 

 

5,589

 

Deferred financing costs

 

 

400

 

 

553

 

Stock compensation

 

 

892

 

 

861

 

Tax credit carryforward

 

 

17

 

 

1,118

 

Interest limitation

 

 

8,773

 

 

4,412

 

Lease liability

 

 

1,728

 

 

 —

 

Other

 

 

669

 

 

927

 

Total gross deferred tax assets

 

 

16,121

 

 

16,013

 

Valuation allowance

 

 

(5,638)

 

 

(6,823)

 

Net deferred tax assets

 

 

10,483

 

 

9,190

 

Deferred tax liabilities:

 

 

 

 

 

 

 

Plant, equipment and leasehold improvements

 

 

(5,505)

 

 

(3,851)

 

Intangible assets

 

 

(8,877)

 

 

(9,311)

 

Right-of-use assets

 

 

(1,486)

 

 

 —

 

Prepaid expenses and other

 

 

(1,511)

 

 

(1,777)

 

Total gross deferred tax liabilities

 

 

(17,379)

 

 

(14,939)

 

Net deferred tax liabilities

 

$

(6,896)

 

$

(5,749)

 

 

The net change in the valuation allowance during the year ended December 31, 2019 was a decrease of $1,185. The overall decrease is comprised primarily of a decrease related to the sale of certain foreign subsidiaries and changes in facts and circumstances related to state research and development credits carried forward, partially offset by an increase due to the interest deduction limitation related to section 163(j) that is not expected to be fully realized.   

For 2019, the effective tax rate differs from the federal U.S. statutory rate primarily due to the impact of tax expense recorded related to a partial valuation allowance on certain U.S. deferred tax assets.  The partial valuation allowance is due to the limitation on the deductibility of interest expense which is a provision of U.S. government tax reform legislation enacted in December 2017.  In addition, the Company recorded tax benefits relating to certain elections in connection with the U.K. segment disposition. Other items impacting the effective tax rate in 2019 include other permanent non-deductible items, and state and foreign income taxes. 

The Company no longer has any substantial potential tax benefits associated with gross foreign operating loss carryforwards due to the sale of its Canadian subsidiary. The Company has potential tax benefits associated with $3,668 of gross domestic operating loss carryforwards as of December 31, 2019, which do not expire. The Company also has various state and local operating loss carryforwards which will expire at various dates from 2033 to 2038. The Company does expect to be able to utilize these losses prior to expiration.  The Company’s income tax receivable on the consolidated balance sheet as of December 31, 2019, and December 31, 2018, is primarily comprised of a U.S. federal income tax receivable relating to a prior tax year.

The Company has potential tax benefits associated with state research and development tax credit carryforwards as of December 31, 2019 of $108, which will expire in 2032. The Company expects to be able to recognize these credit carryforwards, and accordingly has not provided a valuation allowance for the tax benefit. Additionally, the Company does not have any potential tax benefits associated with federal research and development tax credit carryforwards as of December 31, 2019.

At December 31, 2019, no provision has been made for U.S. federal and state taxes on cumulative foreign earnings as there are no current or cumulative earnings of foreign operations. The Company recorded no current tax benefit in 2019 related to the sale of the Canadian operations.

Unrecognized Tax Benefits

Unrecognized tax benefits represent the aggregate tax effect of differences between the tax return positions and the amounts otherwise recognized in the Company’s consolidated financial statements, and are reflected in “Other long term liabilities” and “Deferred income taxes” in the Company’s consolidated balance sheets.  The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax provision only when based upon the technical merits, it is “more-likely-than-not” that the tax position will be sustained upon examination.

 

 

 

 

 

 

 

 

Balance as of December 31, 2018

 

$

2,044

Increase related to current year tax position

 

 

349

Decrease related to prior year tax position

 

 

(97)

Decrease related to settlements with tax authorities, net of federal benefit

 

 

(124)

Balance as of December 31, 2019

 

$

2,172

 

The Company recognizes interest and penalties with respect to unrecognized tax benefits as a component of income tax expense. The amount of accrued interest and penalties related to unrecognized tax benefits for the year ended December 31, 2019 was $238, and was $221 for the year ended December 31, 2018.

The Company is generally subject to potential federal and state examinations for the tax years on and after December 31, 2014 for federal purposes and December 31, 2015 for state purposes. The Company is subject to examinations for its U.K. subsidiaries for tax years ended on and after December 31, 2018. The Company's Canadian subsidiary which was sold April 1, 2019, is subject to examination for tax years ended on and after December 31, 2016.

v3.19.3.a.u2
Stockholders' Deficit
12 Months Ended
Dec. 31, 2019
Stockholders’ Deficit  
Stockholders’ Deficit

12. Stockholders’ Deficit

Common Stock

Common Stock has a par value of $0.001 per share. Holders of common stock are entitled to receive dividends and distributions subject to the participation rights of holders of all classes of stock at the time outstanding, as such holders have prior rights as to dividends pursuant to the rights of any series of Preferred Stock. Upon any liquidation, dissolution, or winding up of the Company, after required payments are made to holders of any series of Preferred Stock, any remaining assets of the Company will be distributed ratably to the holders of Common Stock. Holders of Common Stock are entitled to one vote per share. 

v3.19.3.a.u2
Loss per Share
12 Months Ended
Dec. 31, 2019
Loss per Share  
Loss per Share

13. Loss per Share

Basic or diluted loss per share is computed by dividing net earnings or loss by the weighted-average number of ordinary shares outstanding during the period.

The following table sets forth the computation of basic and diluted loss per share:

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2019

    

2018

 

Numerator:

 

 

 

 

 

 

 

Net loss from continuing operations

 

$

(4,330)

 

$

(14,799)

 

Net loss from a discontinued operation, net of taxes

 

 

(124)

 

 

(22,663)

 

Net loss

 

$

(4,454)

 

$

(37,462)

 

Denominator:

 

 

 

 

 

 

 

Basic and diluted EPS—weighted average common shares outstanding

 

 

11,196,710

 

 

11,149,554

 

Basic and Diluted EPS:

 

 

 

 

 

 

 

Loss per share from continuing operations

 

$

(0.39)

 

$

(1.33)

 

Loss per share from discontinued operations, net of taxes

 

 

(0.01)

 

 

(2.03)

 

Loss per share

 

$

(0.40)

 

$

(3.36)

 

The potentially dilutive effect of 800,431 and 985,876 stock options and restricted stock units as of December 31, 2019 and 2018, respectively, has been excluded from the computation of diluted earnings per share as their inclusion would be anti-dilutive.

v3.19.3.a.u2
Commitments and Contingencies: Litigation Settlement
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies: Litigation Settlement.  
Commitments and Contingencies: Litigation Settlement

14. Commitments and Contingencies; Litigation Settlement

Commitments

Please see Note 2 Summary of Significant Accounting Polices for details on our future cash payments with respect to financing and operating leases

The Company has recorded the current portion of financing lease obligations in “Accrued expenses” and the long-term financing lease obligations in “Other long-term liabilities”, within the consolidated balance sheet as of December 31, 2019, and December 31, 2018. 

The Company incurred rent expense under non-cancellable operating leases during the years ended December 31, 2019 and 2018, totaling $3,344 and $3,767, respectively.

During the normal course of business, the Company enters into non-cancellable agreements to purchase goods and services, including production equipment and information technology systems. The Company leases real property for its facilities under non-cancellable operating lease agreements. Land and facility leases expire at various dates between 2021 and 2024 and contain various provisions for rental adjustments and renewals. The leases typically require the Company to pay property taxes, insurance and normal maintenance costs.

Contingencies

In accordance with applicable accounting guidance, the Company establishes an accrued liability when loss contingencies are both probable and estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. As a matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is probable and estimable. Once the loss contingency is deemed to be both probable and estimable, the Company will establish an accrued liability and record a corresponding amount of litigation-related expense. The Company expenses professional fees associated with litigation claims and assessments as incurred.

Heckermann v. Montross et al., Case No. 1:17-CV-01673 (D. Del.) (the “Derivative Suit”)

On November 20, 2017, a purported Company stockholder filed a stockholder derivative complaint in the United States District Court for the District of Delaware (the “Court”) against certain of the Company’s former officers and current and former directors, along with the sponsors of the Company’s October 2015 initial public offering (“IPO”). The Company was also named as a nominal defendant. The derivative complaint asserted claims under §§10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 and sought, among other things, injunctive relief, damages and costs. It alleged false or misleading statements and omissions in the Registration Statement filed by the Company in connection with its IPO and subsequent public filings and statements. The derivative complaint also asserted claims for purported breaches of fiduciary duties, unjust enrichment, mismanagement and waste of corporate assets.

On December 18, 2019, the parties filed a Stipulation and Agreement of Settlement to resolve and dismiss the Derivative Suit, and on January 2, 2020, the Court granted preliminary approval of the settlement set forth therein. Under the settlement, (i) all claims that were or could have been asserted in the Derivative Suit will be resolved and discharged, (ii) the Company will implement certain corporate governance reforms, and (iii) the Company’s insurer will pay fees and expenses awarded to the plaintiff’s counsel in the amount of $343 and a service award to the plaintiff of a nominal amount. The Court will hold a hearing on April 1, 2020 to, among other things, approve the settlement.  No liability has been recorded by the Company as of December 31, 2019, and December 31, 2018.

In addition to the matter described above, the Company is subject to routine legal proceedings in the ordinary course of business. The Company believes that the ultimate resolution of these matters will not have a material adverse effect on our business, financial condition or results of operations.

Litigation Settlement 

CPI Card Group Inc. v. Multi Packaging Solutions, Inc., et al. Second Case 

During the summer of 2017, the Company and its subsidiary, CPI Card Group – Minnesota, Inc. (together, the “Company Plaintiffs”), commenced a lawsuit in the United States District Court for the District of Minnesota against a former employee, Multi Packaging Solutions, Inc. (“MPS”), and two MPS employees as individuals (collectively, the Defendants).  On June 12, 2019, the Company Plaintiffs and the Defendants reached a settlement pursuant to which the case was resolved and dismissed by mutual agreement on terms that provided for, among other things, a cash payment to the Company.  The Company received a $6,000 cash settlement payment during the second quarter of 2019, and recorded the gain within income from operations, in the Other segment.  The case was dismissed in its entirety, with prejudice, by court order on July 12, 2019.

v3.19.3.a.u2
Employee Benefit Plan
12 Months Ended
Dec. 31, 2019
Employee Benefit Plan  
Employee Benefit Plan

15. Employee Benefit Plan

The Company maintains a qualified defined-contribution plan under the provisions of the Internal Revenue Code Section 401(k), which covers substantially all employees in the United States who meet certain eligibility requirements. Under the plan, participants may defer their salary subject to statutory limitations and may direct the contributions among various investment options. The Company matches 100% of the participant’s first 3% of deferrals and 50% matching on each of the 4th and 5th percent contributed by the participant. As the Company operates the plan as a safe harbor 401(k) plan, the Company’s match is 100% vested at the time of the match.

The aggregate amounts charged to expense in connection with the plan were $1,359 and $1,235 for the years ended December 31, 2019 and 2018, respectively.

v3.19.3.a.u2
Stock Based Compensation
12 Months Ended
Dec. 31, 2019
Stock Based Compensation  
Stock Based Compensation

16. Stock Based Compensation

CPI Card Group Inc. Omnibus Incentive Plan

During October 2015, the Company adopted the CPI Card Group Inc. Omnibus Incentive Plan (the “Omnibus Plan”) pursuant to which cash and equity based incentives may be granted to participating employees, advisors and directors. The Company had reserved 1,200,000 shares of common stock for issuance under the Omnibus Plan.  As of December 31, 2019, there were 278,199 shares available for grant under the Omnibus Plan.

The Company did not grant any awards of non-qualified stock options for the year ended December 31, 2019.  During the year ended December 31, 2018, the Company granted awards of non-qualified stock options for 159,755 shares of common stock. All stock option grants have a 10-year term, and will generally vest ratably over a three-year period beginning on the first anniversary of the grant date. 

The following is a summary of the activity in outstanding stock options under the Omnibus Plan:  

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

 

 

 

Weighted-

    

 

 

 

 

Weighted-

 

 

Average

 

 

 

 

 

Average

 

 

Remaining

 

 

 

 

 

Exercise

 

 

Contractual Term

 

 

 

Options

 

Price

 

 

(in Years)

 

 

 

 

 

 

 

 

 

 

 

Outstanding as of December 31, 2018

 

910,627

 

$

14.99

 

 

 

 

Forfeited

 

(117,543)

 

 

15.48

 

 

 

 

Outstanding as of December 31, 2019

 

793,084

 

$

14.91

 

 

7.40

 

Options vested and exercisable as of December 31, 2019

 

542,513

 

 

19.01

 

 

7.15

 

Options vested and expected to vest as of December 31, 2019

 

793,084

 

 

14.91

 

 

7.40

 

 

The following is a summary of the activity in non-vested stock options under the Omnibus Plan:    

 

 

 

 

 

 

 

    

 

    

 

 

 

 

 

 

Weighted-

 

 

 

 

Average

 

 

 

 

Grant-Date

 

 

Number

 

Fair Value

Non-vested as of December 31, 2018

 

605,352

 

$

3.14

Forfeited

 

(78,676)

 

 

3.39

Vested

 

(276,105)

 

 

4.20

Non-vested as of December 31, 2019

 

250,571

 

$

1.90

 

 

 

 

 

 

Unvested options as of December 31, 2019 vest as follows:

 

 

 

2020

 

200,364

2021

 

50,207

Total unvested options as of December 31, 2019

 

250,571

 

The fair value of stock option awards was determined at the date of grant using a Black-Scholes option-pricing model, with the following weighted-average assumptions:

 

 

 

 

 

 

December 31, 2018

 

Expected term in years

 

6.0

 

Volatility

 

48.0

%

Risk-free interest rate

 

2.7

%

Dividend yield

 

%

 

Expected term –For option grants valued using a Black-Scholes option-pricing model, the Company estimated the expected term based on the average of the weighted-average vesting period and the contractual term of the stock option awards by utilizing the “simplified method”, as the Company does not have sufficient available historical data to estimate the expected term of these stock option awards. 

Volatility – The Company considered the volatility of its own common stock in determining the fair value of stock option awards, in addition to a peer group average historical volatility over the expected option term.  This is due to the limited amount of trading history of the Company’s common stock.  The peer group was based on financial technology companies that completed an initial public offering of common stock within the last 10 years. 

Risk-free interest rate – The risk-free interest rate was determined by using the United States Treasury rate for the period that coincided with the expected option term.

Dividend yield – The estimated dividend yield is based on the Company’s recent historical dividend practice and the market value of its common stock. 

The weighted average grant-date fair value of options granted is as follows:

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

    

2019

    

2018

 

Weighted Average Grant-Date Fair Value of Options Granted

 

$

n/a

 

$

1.21

 

 

 

 

 

 

 

 

 

The following table summarizes the changes in the number of outstanding restricted stock units for the year ended December 31, 2019 under the Omnibus Plan:

 

 

 

 

 

 

 

    

 

    

  Weighted-

 

 

 

 

Average

 

 

 

 

Grant-Date

 

 

Shares 

 

Fair Value

Outstanding as of December 31, 2018

 

68,649

 

$

6.25

Vested

 

(57,563)

 

 

3.15

Forfeited

 

(3,739)

 

 

22.01

Outstanding as of December 31, 2019

 

7,347

 

$

22.49

 

The Company did not grant awards of restricted stock units for the year ended December 31, 2019. During the year ended December 31, 2018, the Company granted awards of restricted stock units for 75,188 shares of common stock. The restricted stock unit awards contain conditions associated with continued employment or service, and generally vest one year from the date of grant.  On the vesting dates, shares of common stock are issued to the award recipients.  Unvested restricted stock units of 7,347 as of December 31, 2019 will vest entirely in 2020.

 

The following table summarizes the changes in the number of outstanding cash performance awards for the year ended December 31, 2019:

 

 

 

 

 

 

Cash Performance Awards

Outstanding as of December 31, 2018

 

425,012

Vested

 

(212,505)

Forfeited

 

(71,435)

Outstanding as of December 31, 2019

 

141,072

 

During the year ended December 31, 2017, the Company granted awards of 932,837 cash performance units with a grant-date fair value of $663. These awards will settle in cash in three annual payments on the first, second and third anniversaries of the date of grant.  The cash performance units are based on the performance of the Company’s stock, measured based on the Company’s stock price at each of the first, second, and third anniversaries of the grant date compared to the Company’s stock price on the date of grant.  The cash performance units originally in 2017 were valued using a Monte Carlo simulation.  The Company recognizes compensation expense on a straight-line basis for each annual performance period. The cash performance units are accounted for as a liability and remeasured to fair value at the end of each reporting period.  As of December 31, 2019, the Company recognized a liability of $65 in “Accrued expenses” in the Consolidated Balance Sheet for unsettled cash performance units, which are expected to vest in March 2020.

Compensation expense for the Omnibus Plan for the years ended December 31, 2019 and 2018 was $250 and $961, respectively.  As of December 31, 2019, the total unrecognized compensation expense related to unvested options, restricted stock units, and cash performance unit awards under the Omnibus Plan was $126, which the Company expects to recognize over an estimated weighted average period of 0.8 years.

CPI Holdings I, Inc. Amended and Restated 2007 Stock Option Plan

In 2007, the Company’s Board of Directors adopted the CPI Holdings I, Inc. Amended and Restated 2007 Stock Option Plan (the “Option Plan”). Under the provisions of the Option Plan, stock options may be granted to employees, directors, and consultants at an exercise price greater than or equal to (and not less than) the fair market value of a share on the date the option is granted. 

As a result of the Company’s adoption of its Omnibus Plan, as further described above, no further awards will be made under the Option Plan. 

During the year ended December 31, 2019, the remaining 6,600 outstanding shares in the Option Plan were exercised. As such, there were no outstanding shares remaining as of December 31, 2019

There was no compensation expense related to options previously granted under the Option Plan, for years ended December 31, 2019 and 2018.

v3.19.3.a.u2
Segment Reporting
12 Months Ended
Dec. 31, 2019
Segment Reporting  
Segment Reporting

17. Segment Reporting

The Company has identified reportable segments as those consolidated subsidiaries 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 superior to available 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 identify strategies to improve the allocation of resources amongst segments.

On August 3, 2018, the Company completed the sale of the U.K. Limited segment. See Note 4 “Discontinued Operation” for further information. The Company has restated all historical periods presented within these financial statements and has not included U.K. Limited as a reportable segment. 

As of December 31, 2019, the Company’s reportable segments were as follows:

·

U.S. Debit and Credit,

·

U.S. Prepaid Debit, and

·

Other.

U.S. Debit and Credit Segment

The U.S. Debit and Credit segment primarily produces Financial Payment Cards and provides integrated card services to card-issuing banks in the United States. Products manufactured by this segment primarily include EMV and non-EMV Financial Payment Cards, including contact, contactless, and dual-interface cards, CPI MetalsTM, a premium metal card and Second WaveTM payment cards featuring a core made with recovered ocean-bound plastic.  The Company also sells instant card issuance solutions, and Private Label Credit Cards that are not issued on the networks of the Payment Cards Brands. The Company provides CPI 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 U.S. Debit and Credit segment operations are each audited for compliance by multiple Payment Card Brands. Many of the Company’s customers require CPI to comply with the standards of the PCI Security Standards Council.

U.S. Prepaid Debit Segment

The U.S. Prepaid Debit segment primarily provides integrated card services to Prepaid Debit Card providers 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 U.S. Prepaid Debit segment operation is audited for compliance by multiple Payment Card Brands.  Many of the Company’s customers require CPI to comply with the standards of the PCI Security Standards Council.

Other

The Other segment includes corporate expenses and a less significant operation that generated sales from the production of Financial Payment Cards and retail gift cards, and card personalization and fulfillment services in Canada, prior to its sale. The sale agreement did not include the portions of the business relating to Financial Payment Cards, as those business customers of the Canadian subsidiary migrated to the Company’s operations in the U.S. or to other service providers in 2019.

 

Performance Measures of Reportable Segments

Net sales and EBITDA from continuing operations of the Company’s reportable segments for the years ended December 31, 2019 and 2018 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

EBITDA

 

 

December 31,

 

December 31,

 

    

2019

    

2018

    

2019

    

2018

U.S. Debit and Credit

 

$

213,141

 

$

178,597

 

$

46,227

 

$

34,213

U.S. Prepaid Debit

 

 

64,330

 

 

69,199

 

 

22,456

 

 

23,782

Other

 

 

1,679

 

 

9,891

 

 

(27,468)

 

 

(35,297)

Intersegment eliminations(a)

 

 

(1,077)

 

 

(1,873)

 

 

 —

 

 

 —

Total:

 

$

278,073

 

$

255,814

 

$

41,215

 

$

22,698


(a)

Amounts include the elimination of sales between segments for consolidation.

 

The following table provides a reconciliation of total segment EBITDA from continuing operations to “Net loss from continuing operations” for the years ended December 31, 2019 and 2018:

 

 

 

 

 

 

 

 

 

December 31,

 

    

2019

    

2018

Total segment EBITDA from continuing operations

 

$

41,215

 

$

22,698

Interest, net

 

 

(24,891)

 

 

(23,431)

Income tax benefit (expense)

 

 

(3,652)

 

 

4,339

Depreciation and amortization

 

 

(17,002)

 

 

(18,405)

Net loss from continuing operations

 

$

(4,330)

 

$

(14,799)

 

Balance Sheet Data of Reportable Segments

 

Total assets of the Company’s reportable segments as of December 31, 2019 and 2018 were as follows:

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2019

    

2018

 

U.S. Debit and Credit

 

$

176,496

 

$

169,567

 

U.S. Prepaid Debit

 

 

25,259

 

 

25,117

 

Other

 

 

11,732

 

 

12,520

 

Total assets

 

$

213,487

 

$

207,204

 

 

Net Sales to Geographic Location; Property, Equipment and Leasehold Improvements and Long-Lived assets by Geographic Segments

 

Subsequent to the sale of the Company’s U.K. Limited segment and reclassification to discontinued operations, and the sale of the Company’s Canada operations on April 1, 2019, the Company’s Net Sales, Property, Equipment and Leasehold Improvements, and Long-Lived assets relating to geographic locations outside of the United States is insignificant.

 

Net Sales by Product and Services

 

Net sales from products and services sold by the Company for the years ended December 31, 2019 and 2018 were as follows:

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

    

2019

    

2018

    

Product net sales(a)

 

$

143,941

 

$

125,069

 

Services net sales(b)

 

 

134,132

 

 

130,745

 

Total net sales:

 

$

278,073

 

$

255,814

 


(a)

 “Products” net sales include the design and production of Financial Payment Cards in contact-EMV, Dual-Interface EMV, metal, contactless and magnetic stripe card formats. The Company also generates “Products” revenue from the sale of Card@Once printers and consumables, private label credit cards and retail gift cards.

 

(b)

“Services” net sales include revenue from the personalization and fulfillment of Financial Payment Cards, providing tamper-evident security packaging and fulfillment services to Prepaid Debit Card program managers and software as a service personalization of instant issuance debit cards. The Company also generates “Services” revenue from usage fees generated from the Company’s patented card design software, known as MYCA, which provides customers and cardholders the ability to design cards on the internet and customize cards with individualized digital images. “Services” revenue is also generated from personalizing retail gift cards, historically generated in Canada prior to the disposition.

v3.19.3.a.u2
Quarterly Financial Information (Unaudited)
12 Months Ended
Dec. 31, 2019
Quarterly Financial Information (Unaudited)  
Quarterly Financial Information (Unaudited)

18. Quarterly Financial Information (Unaudited)

 

Summarized quarterly results for the years ended December 31, 2019 and 2018 on a continuing operations basis, were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

 

 

 

 

 

 

 

 December 31, 

 

2019 by Quarter:

    

Q1

    

Q2

    

Q3

    

Q4

    

2019

 

Net sales

 

$

66,866

 

$

66,901

 

$

71,681

 

$

72,625

 

$

278,073

 

Gross profit

 

$

21,521

 

$

22,381

 

$

25,419

 

$

21,998

 

$

91,319

 

Net income (loss) from continuing operations

 

$

(3,097)

 

$

1,552

 

$

(656)

 

$

(2,129)

 

$

(4,330)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings (loss) per share from continuing operations

 

$

(0.28)

 

$

0.14

 

$

(0.06)

 

$

(0.19)

 

$

(0.39)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

2018 by Quarter:

    

Q1

    

Q2

    

Q3

    

Q4

    

2018

 

Net sales

 

$

54,857

 

$

61,454

 

$

70,987

 

$

68,516

 

$

255,814

 

Gross profit

 

$

14,428

 

$

19,875

 

$

23,308

 

$

20,979

 

$

78,590

 

Net loss from continuing operations

 

$

(5,677)

 

$

(802)

 

$

(1,085)

 

$

(7,235)

 

$

(14,799)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share from continuing operations

 

$

(0.51)

 

$

(0.07)

 

$

(0.10)

 

$

(0.65)

 

$

(1.33)

 

 

v3.19.3.a.u2
Subsequent Event
12 Months Ended
Dec. 31, 2019
Subsequent Event  
Subsequent Event

19. Subsequent Event

 

On March 6, 2020, the Company entered into a new $30,000 floating rate senior credit facility (the “Senior Credit Facility”) with two of its First Lien Term Loan lenders.  The Senior Credit Facility, which is senior in priority to the Company’s $312,500 First Lien Term Loan, matures on May 17, 2022, and is collateralized by substantially all of the Company’s assets.  The Company plans to use the proceeds towards execution of its strategic plan. Concurrently with the closing of the new Senior Credit Facility, the Company’s Revolving Credit Facility was terminated, and CPI and CPI Acquisition, Inc. entered into a second amendment to the First Lien Term Loan. The Revolving Credit Facility had no outstanding borrowings as of December 31, 2019, or on its termination date of March 6, 2020. 

 

v3.19.3.a.u2
Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2019
Summary of Significant Accounting Policies  
Basis of Presentation

Basis of Presentation

The accompanying Consolidated Financial Statements include the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents and they are stated at cost, which approximates fair value.

Trade Accounts Receivable and Concentration of Credit Risk

Trade Accounts Receivable and Concentration of Credit Risk

Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company performs ongoing credit evaluations of its customers and generally requires no collateral to secure accounts receivable.

 

 

 

 

 

 

 

 

    

December 31, 2019

    

December 31, 2018

Trade accounts receivable

 

$

39,004

 

$

36,428

Unbilled accounts receivable

 

 

4,223

 

 

7,577

 

 

 

43,227

 

 

44,005

Less allowance for doubtful accounts

 

 

(395)

 

 

(211)

 

 

$

42,832

 

$

43,794

 

The Company maintains an allowance for potentially uncollectible accounts receivable based upon its assessment of the collectability of accounts receivable. Accounts are written off against the allowance when it is determined collection will not occur. The allowance for bad debt activity for the years ended December 31, 2019 and 2018 is summarized as follows:

 

 

 

 

 

 

Balance as of December 31, 2017

    

$

48

 

Bad debt expense

 

 

169

 

Write-off of uncollectible accounts

 

 

(6)

 

Balance as of December 31, 2018

 

$

211

 

Bad debt expense

 

 

228

 

Write-off of uncollectible accounts

 

 

(37)

 

Currency translation adjustments

 

 

(7)

 

Balance as of December 31, 2019

 

$

395

 

 

The increase in bad debt expense during 2019 primarily relates to reserves established for outstanding receivables from the Company’s Canadian operations that were disposed on April 1, 2019.

For the year ended December 31, 2019 one customer represented 18% of the Company’s consolidated net sales. For the year ended December 31, 2018 one customer represented 19% of the Company’s consolidated net sales.

Inventories

Inventories

Inventories consist of raw materials, and finished goods and are measured at the lower of cost or net realizable value (determined on the first-in, first-out, specific identification or weighted-average method basis). Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Finished goods inventory represents primarily stock cards and Card@Once printers.  The stock cards are ready to be personalized as customer orders are received.

Plant, Equipment and Leasehold Improvements

Plant, Equipment and Leasehold Improvements

Plant, equipment and leasehold improvements are recorded at cost. Accumulated depreciation is computed using the straight-line method over the lesser of the estimated useful life of the related assets (generally 3 to 10 years for machinery and equipment, furniture, computer equipment, and leasehold improvements) or, when applicable, the lease term. Maintenance and repairs that do not extend the useful life of the respective assets are charged to expense as incurred.

Long-lived assets with finite lives are reviewed for impairment whenever events indicate that the carrying amount of the asset or the carrying amounts of the asset group containing the asset may not be recoverable. In such reviews, estimated undiscounted future cash flows associated with these assets or asset groups are compared with their carrying value to determine if a write-down to fair value is required. 

Goodwill and Intangible Assets

Goodwill and Intangible Assets

 Goodwill is not amortized, but instead is tested for impairment at least annually on October 1 or more frequently when an event occurs or circumstances change that indicates the carrying value may not be recoverable. For impairment evaluations, the Company first makes a qualitative assessment with respect to goodwill. During 2017, the Company early adopted ASU 2017-04,  Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) in conjunction with its annual impairment testing effective October 1, 2017. In accordance with ASU 2017-04,  an entity should perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value.

During the year-ended December 31, 2019, the Company’s reporting units for goodwill impairment testing changed, based on the Company’s chief operating decision maker’s review of financial information and allocation of resources. As a result of this change in reporting units for goodwill impairment testing, the Company allocated goodwill, on a relative fair value, to the new reporting units.  All of the Company’s goodwill is included in the U.S. Debit and Credit segment.

The Company generally bases its measurement of the fair value of a reporting unit on a blended analysis of the present value of future discounted cash flows and the market valuation approach. The discounted cash flows model indicates the fair value of the reporting unit based on the present value of the cash flows that the Company expects the reporting unit to generate in the future. The Company's significant estimates in the discounted cash flows model include: its weighted average cost of capital; discrete and long-term rate of growth and profitability of the reporting unit's business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the reporting unit to publicly traded companies in similar lines of business. Significant estimates in the market valuation approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment, and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting unit.

Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets, and are reviewed for impairment whenever events indicate that the carrying amount of the asset may not be recoverable. In such reviews, estimated undiscounted future cash flows associated with these assets are compared with their carrying value to determine if a write-down to fair value is required.    

Income Taxes

Income Taxes

The Company accounts for income taxes using an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

The Company has deferred tax assets and liabilities and maintains valuation allowances where it is more likely than not that all or a portion of deferred tax assets will not be realized. To the extent the Company determines that it will not realize the benefit of some or all of its deferred tax assets, then these deferred tax assets will be adjusted through the Company’s income tax expense in the period in which this determination is made.

The Company recognizes the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position, that the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.  The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for stock-based compensation pursuant to ASC 718, Share-Based Payments. All stock-based compensation to employees is required to be measured at fair value and expensed over the requisite service period. The Company accounts for forfeitures as they occur and reverses previously recognized expense for the unvested portion of the forfeited shares.  The Company recognizes compensation expense on awards on a straight-line basis over the vesting period for each tranche of an award. Refer to Note 16 “Stock Based Compensation” for additional discussion regarding details of the Company's stock-based compensation plans.

Net Sales

Net Sales

Products Net Sales

“Products” net sales are recognized when obligations under the terms of a contract with a customer are satisfied. In most instances, this occurs over time as cards are manufactured for specific customers, have no alternative use, and the Company has an enforceable right to payment for work performed. For work performed but not completed and unbilled, the Company estimates revenue by taking actual costs incurred and applying historical margins for similar types of contracts. Items included in “Products” revenue are the design and production of Financial Payment Cards, including contact-EMV, Dual-Interface EMV®, metal, contactless and magnetic stripe cards, private label credit cards and retail gift cards. Card@Once® printers and consumables are also included in “Products” net sales, and their associated revenues are recognized at the time of shipping. The Company includes gross shipping and handling revenue in net sales, and shipping and handling costs in cost of sales.

 

Services Net Sales

 

Revenue is recognized for “Services” as the services are performed. Items included in “Services” net sales include the personalization and fulfillment of Financial Payment Cards, providing tamper-evident secure packaging and fulfillment services to Prepaid Debit Card program managers, and software as a service personalization of instant issuance debit cards. The Company also generates “Service” revenue usage-fees from the Company’s patented card design software, known as MYCA, which provides customers and cardholders the ability to design cards on the internet and customize cards with individualized digital images. “Services” revenue is also generated from personalizing retail gift cards historically in Canada prior to disposition. As applicable, for work performed but not completed and unbilled, the Company estimates revenue by taking actual costs incurred and applying historical margins for similar types of contracts.

 

Customer Contracts

The Company often enters into Master Services Agreements (“MSAs”) with its customers. Generally, enforceable rights and obligations for goods and services occur only when a customer places a purchase order or statement of work to obtain goods or services under an MSA. The contract term as defined by ASU 2014-09 is the length of time it takes to deliver the goods or services promised under the purchase order or statement of work. As such, the Company's contracts are generally short term in nature.

 

Use of Estimates

Use of Estimates

The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These accounting principles require management to make assumptions and estimates relating to the reporting of assets and liabilities in its preparation of the Consolidated Financial Statements. Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, goodwill and intangible assets, leases, valuation allowances for inventories and deferred taxes, revenue recognized for work performed but not completed, and uncertain tax positions. Actual results could differ from those estimates.

Foreign Currency Translation

Foreign Currency Translation

Financial statements of foreign subsidiaries that use local currencies as their functional currency are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and the weighted-average exchange rate for each reporting period for net sales, expenses, gains and losses. Translation adjustments are recorded as a component of Accumulated Other Comprehensive Loss in the accompanying consolidated financial statements. Subsequent to the sale of the UK Ltd. Segment and Canada, the Company has no significant foreign subsidiaries.

Foreign currency transaction gains and losses resulting from the process of re-measurement are recorded in “Foreign currency loss” in the accompanying Consolidated Statements of Operations and Comprehensive Loss. For the years ended December 31, 2019 and 2018 there were ($1,327) and ($311) of such foreign currency losses, respectively. During the year ended December 31, 2019, in connection with the sale of the Company’s Canada subsidiary, the Company released the related cumulative translation adjustment of $1,329 from “Accumulated Other Comprehensive Loss” on the Balance Sheet into net loss from continuing operations. 

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASC Topic 842, Leases (“ASC 842”), which provides guidance for accounting for leases. The new guidance requires companies to recognize the assets and liabilities for the rights and obligations created by leased assets. ASC 842 is effective for annual and interim periods beginning after December 15, 2018 (the Company’s fiscal year 2019) with early adoption permitted.  The guidance required a modified retrospective approach, with an option to apply the transition provisions of the new guidance at the adoption date without adjusting the comparative periods presented. In July 2018, the FASB issued additional accounting standard updates clarifying certain provisions, as well as providing for a second transition method allowing entities to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings. 

The Company adopted the new guidance on the effective date of January 1, 2019 and used the adoption date as the date of initial application as allowed under ASC 842. Consequently, historical financial information has not been updated and the disclosures required under the new standard have not be provided for dates and periods before January 1, 2019.

The new standard provides a number of optional practical expedients in transition. The Company elected the ‘package of practical expedients’, which permits the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs. The Company did not elect the use-of-hindsight transition practical expedient.

The new standard also provides practical expedients for the Company’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify, meaning the Company will not recognize right-of-use assets or lease liabilities for existing and new lease agreements as applicable. The Company also elected the practical expedient to not separate lease and non-lease components for all of its leases.

Right-of-use (“ROU’) represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. If applicable, the Company used the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives.

A lease is deemed to exist when the Company has the right to control the use of identified property, plant or equipment, as conveyed through a contract, for a certain period of time and consideration paid. The right to control is deemed to occur when the Company has the right to obtain substantially all of the economic benefits of the identified assets and the right to direct the use of such assets.

As a result of the adoption of ASC 842 the Company recorded $8,025 of operating ROU assets, and corresponding operating lease liabilities of $8,813 on January 1, 2019, relating to existing real estate operating leases.

The components of operating and finance lease costs for the year ended December 31, 2019 were as follows:

 

 

 

 

 

 

 

 

 

Year Ended
December 31, 2019

Total operating lease costs

 

 

$

2,625

 

 

 

 

 

Finance lease cost:

 

 

 

 

  Amortization of right-of-use assets

 

 

$

886

  Interest on lease liabilities

 

 

 

290

  Total financing lease costs

 

 

$

1,176

 

The following table reflects balances for operating leases and financing leases:

 

 

 

 

 

    

December 31, 2019

Operating leases

 

 

 

Operating lease right-of-use assets, net of amortization

 

$

6,312

 

 

 

 

Operating lease liability (current)

 

$

2,283

Long-term operating liability

 

 

5,067

  Total operating lease liabilities

 

$

7,350

 

 

 

 

Financing leases

 

 

 

Property, equipment and leasehold improvements

 

$

8,256

Accumulated depreciation

 

 

(1,094)

  Total financing leases in property, equipment and leasehold improvements, net

 

$

7,162

 

 

 

 

Financing lease liability (current)

 

$

2,211

Long-term financing liability

 

 

3,886

  Total financing lease liabilities

 

$

6,097

 

Finance and operating lease right-of-use assets are recorded in “Plant, equipment and leasehold improvements, net”. Financing and operating lease liabilities are recorded in “Accrued expenses” and “Other long-term liabilities”.

Components of lease expense were as follows:

 

 

 

 

 

 

 

 

December 31, 2019

Weighted Average Remaining Lease Term

 

 

 

  Operating Leases

 

 

3.40

  Financing Leases

 

 

2.86

 

 

 

 

Weighted Average Discount Rate

 

 

 

  Operating Leases

 

 

8.94%

  Financing Leases

 

 

9.28%

 

Future cash payments with respect to lease obligations as of December 31, 2019 were as follows:

 

 

 

 

 

 

 

 

 

 

Operating

 

 

Financing

 

 

 

Lease

 

 

Leases

Year Ending

 

 

 

 

 

 

2020

 

$

2,854

 

$

2,659

2021

 

 

2,646

 

 

2,043

2022

 

 

1,371

 

 

1,565

2023

 

 

1,097

 

 

676

2024

 

 

602

 

 

 —

  Total lease payments

 

 

8,570

 

 

6,943

Less imputed interest

 

 

(1,220)

 

 

(846)

  Total 

 

$

7,350

 

$

6,097

 

Future cash payments with respect to lease obligations as of December 31, 2018 were as follows:

 

 

 

 

 

 

 

 

    

Operating

    

Capital

 

 

Leases

 

Leases

2019

 

$

2,927

 

$

521

2020

 

 

2,771

 

 

474

2021

 

 

2,512

 

 

243

2022

 

 

1,243

 

 

256

2023

 

 

971

 

 

71

Thereafter

 

 

652

 

 

 —

Total

 

$

11,076

 

$

1,565

 

Cash paid on operating leases was $1,973 during the year ended December 31, 2019.

 

As of January 1, 2018, the Company adopted Accounting Standards Update Codification ASC 606, Revenue from Contracts with Customers, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also requires an entity to disclose sufficient quantitative and qualitative information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company applied ASC 606 as of January 1, 2018 to all its contracts using the modified retrospective method and recognized the cumulative effect of adoption as an adjustment to the opening balance of “Accumulated loss” on the Consolidated Balance Sheet. Under the new guidance, the Company recognizes certain performance obligations over time as the goods are produced, since those products provide value to only a specified customer, have no alternative use and the Company has the right to payment for work completed on such items. This accelerates the timing of revenue recognition for these arrangements, as revenue is recognized as goods are produced rather than upon shipment or delivery of goods. See Note 3 “Net Sales” for revenue recognition timing and methodology under ASC 606. 

 

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). This ASU changes the model for the recognition of credit losses from an incurred loss model, which recognized credit losses only if it was probable that a loss had been incurred, to an expected loss model, which requires the Company to estimate the total credit losses expected on the portfolio of financial instruments. This standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company does not anticipate the adoption of this standard will have a material impact on the Company’s consolidated financial position, results of operations, and cash flows.

v3.19.3.a.u2
Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2019
Summary of Significant Accounting Policies  
Schedule of trade accounts receivable

 

 

 

 

 

 

 

 

    

December 31, 2019

    

December 31, 2018

Trade accounts receivable

 

$

39,004

 

$

36,428

Unbilled accounts receivable

 

 

4,223

 

 

7,577

 

 

 

43,227

 

 

44,005

Less allowance for doubtful accounts

 

 

(395)

 

 

(211)

 

 

$

42,832

 

$

43,794

 

Schedule of allowance for bad debt and credit activity

 

 

 

 

 

 

Balance as of December 31, 2017

    

$

48

 

Bad debt expense

 

 

169

 

Write-off of uncollectible accounts

 

 

(6)

 

Balance as of December 31, 2018

 

$

211

 

Bad debt expense

 

 

228

 

Write-off of uncollectible accounts

 

 

(37)

 

Currency translation adjustments

 

 

(7)

 

Balance as of December 31, 2019

 

$

395

 

 

Schedule of operating and finance lease costs

 

 

 

 

 

 

 

 

 

Year Ended
December 31, 2019

Total operating lease costs

 

 

$

2,625

 

 

 

 

 

Finance lease cost:

 

 

 

 

  Amortization of right-of-use assets

 

 

$

886

  Interest on lease liabilities

 

 

 

290

  Total financing lease costs

 

 

$

1,176

 

Schedule of balance sheet information for operating leases and financing leases

 

 

 

 

 

    

December 31, 2019

Operating leases

 

 

 

Operating lease right-of-use assets, net of amortization

 

$

6,312

 

 

 

 

Operating lease liability (current)

 

$

2,283

Long-term operating liability

 

 

5,067

  Total operating lease liabilities

 

$

7,350

 

 

 

 

Financing leases

 

 

 

Property, equipment and leasehold improvements

 

$

8,256

Accumulated depreciation

 

 

(1,094)

  Total financing leases in property, equipment and leasehold improvements, net

 

$

7,162

 

 

 

 

Financing lease liability (current)

 

$

2,211

Long-term financing liability

 

 

3,886

  Total financing lease liabilities

 

$

6,097

 

Schedule of Components of lease expense

 

 

 

 

 

 

 

December 31, 2019

Weighted Average Remaining Lease Term

 

 

 

  Operating Leases

 

 

3.40

  Financing Leases

 

 

2.86

 

 

 

 

Weighted Average Discount Rate

 

 

 

  Operating Leases

 

 

8.94%

  Financing Leases

 

 

9.28%

 

Lease maturity schedule

 

 

 

 

 

 

 

 

 

 

Operating

 

 

Financing

 

 

 

Lease

 

 

Leases

Year Ending

 

 

 

 

 

 

2020

 

$

2,854

 

$

2,659

2021

 

 

2,646

 

 

2,043

2022

 

 

1,371

 

 

1,565

2023

 

 

1,097

 

 

676

2024

 

 

602

 

 

 —

  Total lease payments

 

 

8,570

 

 

6,943

Less imputed interest

 

 

(1,220)

 

 

(846)

  Total 

 

$

7,350

 

$

6,097

 

Schedule of future cash payments with respect to operating leases and purchase obligations

Future cash payments with respect to lease obligations as of December 31, 2018 were as follows:

 

 

 

 

 

 

 

 

    

Operating

    

Capital

 

 

Leases

 

Leases

2019

 

$

2,927

 

$

521

2020

 

 

2,771

 

 

474

2021

 

 

2,512

 

 

243

2022

 

 

1,243

 

 

256

2023

 

 

971

 

 

71

Thereafter

 

 

652

 

 

 —

Total

 

$

11,076

 

$

1,565

 

v3.19.3.a.u2
Net Sales (Tables)
12 Months Ended
Dec. 31, 2019
Net Sales.  
Schedule of disaggregation of net sales by major source

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2019

 

 

Products

 

Services

 

Total

U.S. Debit and Credit

 

$

144,541

 

$

68,600

 

$

213,141

U.S. Prepaid Debit

 

 

 —

 

 

64,330

 

 

64,330

Other

 

 

396

 

 

1,283

 

 

1,679

Intersegment eliminations

 

 

(996)

 

 

(81)

 

 

(1,077)

Total

 

$

143,941

 

$

134,132

 

$

278,073

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2018

 

 

Products

 

Services

 

Total

U.S. Debit and Credit

 

$

122,119

 

$

56,478

 

$

178,597

U.S. Prepaid Debit

 

 

 —

 

 

69,199

 

 

69,199

Other

 

 

4,398

 

 

5,493

 

 

9,891

Intersegment eliminations

 

 

(1,448)

 

 

(425)

 

 

(1,873)

Total

 

$

125,069

 

$

130,745

 

$

255,814

 

v3.19.3.a.u2
Discontinued Operation (Tables)
12 Months Ended
Dec. 31, 2019
Discontinued Operation  
Schedule of assets, liabilities and operations of discontinued operations

The major line items constituting the loss of the discontinued operation for the year ended December 31, 2019 and 2018 were as follows:

 

 

 

 

 

 

 

 

 

 

For the year ended

 

 

December 31, 

 

 

2019

 

2018

Total net sales

 

$

 —

 

$

10,741

Total cost of sales

 

 

 —

 

 

10,222

Selling, general and administrative

 

 

142

 

 

4,336

Impairments

 

 

 —

 

 

7,615

Other expense (income), net

 

 

 —

 

 

4,006

Pretax loss from discontinued operation

 

 

(142)

 

 

(15,438)

  Pretax loss on sale of discontinued operation

 

 

 —

 

 

(7,248)

Total pretax loss on discontinued operation

 

 

(142)

 

 

(22,686)

Income tax benefit

 

 

18

 

 

23

Net loss from discontinued operation

 

$

(124)

 

$

(22,663)

 

v3.19.3.a.u2
Inventories (Tables)
12 Months Ended
Dec. 31, 2019
Inventories  
Schedule of inventories

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2019

    

2018

 

Raw materials

 

$

16,492

 

$

8,235

 

Finished goods

 

 

5,047

 

 

2,991

 

Inventory reserve

 

 

(1,347)

 

 

(1,399)

 

 

 

$

20,192

 

$

9,827

 

 

v3.19.3.a.u2
Plant, Equipment, Leasehold Improvements and Operating Lease Right-of-use Assets (Tables)
12 Months Ended
Dec. 31, 2019
Plant, Equipment, Leasehold Improvements and Operating Lease Right-of-use Assets  
Schedule of plant, equipment, leasehold improvements and operating lease right-to-use assets

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2019

    

2018

 

Machinery and equipment

 

$

52,212

 

$

62,067

 

Machinery and equipment under financing leases

 

 

8,256

 

 

1,812

 

Furniture, fixtures and computer equipment

 

 

4,749

 

 

7,730

 

Leasehold improvements

 

 

14,905

 

 

19,651

 

Construction in progress

 

 

455

 

 

1,596

 

 

 

 

80,577

 

 

92,856

 

Less accumulated depreciation and amortization

 

 

(44,801)

 

 

(53,746)

 

Operating lease right-of-use assets, net of accumulated amortization

 

 

6,312

 

 

 —

 

 

 

$

42,088

 

$

39,110

 

 

v3.19.3.a.u2
Goodwill and Other Intangible Assets (Tables)
12 Months Ended
Dec. 31, 2019
Goodwill and Other Intangible Assets  
Schedule of intangible assets excluding goodwill

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

December 31, 2018

 

 

    

Weighted Average

    

 

    

Accumulated

    

Net Book

    

 

    

Accumulated

    

Net Book

 

 

 

Life (Years)

 

Cost

 

Amortization

 

Value

 

Cost

 

Amortization

 

Value

 

Customer relationships

 

17.2

 

$

55,454

 

 

(28,865)

 

$

26,589

 

$

55,454

 

$

(25,587)

 

$

29,867

 

Technology and software

 

 8

 

 

7,101

 

 

(4,952)

 

 

2,149

 

 

7,101

 

 

(4,024)

 

 

3,077

 

Trademarks

 

8.7

 

 

3,330

 

 

(1,266)

 

 

2,064

 

 

3,330

 

 

(877)

 

 

2,453

 

Noncompete agreements

 

 5

 

 

491

 

 

(491)

 

 

 —

 

 

491

 

 

(451)

 

 

40

 

Intangible assets subject to amortization

 

 

 

$

66,376

 

$

(35,574)

 

$

30,802

 

$

66,376

 

$

(30,939)

 

$

35,437

 

 

Schedule of future aggregate amortization expense for identified amortizable intangibles

 

 

 

 

2020

 

$

4,595

2021

    

 

4,352

2022

 

 

3,867

2023

 

 

3,867

2024

 

 

3,530

Thereafter

 

 

10,591

 

 

$

30,802

 

v3.19.3.a.u2
Fair Value of Financial Instruments (Tables)
12 Months Ended
Dec. 31, 2019
Fair Value of Financial Instruments  
Schedule of financial assets and liabilities subject to fair value measurements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrying

 

 

 

Fair Value Measurement at

 

 

 

Value as of

 

Fair Value as of

 

December 31, 2019

 

 

 

December 31,

 

December 31,

 

(Using Fair Value Hierarchy)

 

 

    

2019

    

2019

    

Level 1

    

Level 2

    

Level 3

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Lien Term Loan

 

$

312,500

 

$

234,375

 

$

 

$

234,375

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrying

 

 

 

Fair Value Measurement at

 

 

 

Value as of

 

Fair Value as of

 

December 31, 2018

 

 

 

December 31,

 

December 31,

 

(Using Fair Value Hierarchy)

 

 

    

2018

    

2018

    

Level 1

    

Level 2

    

Level 3

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Lien Term Loan

 

$

312,500

 

$

203,125

 

$

 

$

203,125

 

$

 

 

v3.19.3.a.u2
Accrued Liabilities (Tables)
12 Months Ended
Dec. 31, 2019
Accrued Liabilities  
Schedule of Accrued Liabilities

 

 

 

 

 

 

 

 

    

December 31, 2019

    

December 31, 2018

 

 

 

 

 

 

    

Accrued payroll and related employee expenses

 

$

3,954

 

$

4,040

Accrued employee performance bonus

 

 

3,920

 

 

7,137

Accrued Interest

 

 

4,951

 

 

5,058

Operating and financing lease liability (current portion)

 

 

4,494

 

 

521

Other

 

 

5,501

 

 

7,097

Total accrued expenses

 

$

22,820

 

$

23,853

 

v3.19.3.a.u2
Long-Term Debt and Credit Facility (Tables)
12 Months Ended
Dec. 31, 2019
Long-Term Debt and Credit Facility  
Schedule of long-term debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Interest

 

December 31,

 

December 31,

 

 

 

Rate

    

2019

    

2018

    

First Lien Term Loan (a)

 

 

6.71%

 

$

312,500

 

$

312,500

 

Unamortized discount

 

 

 

 

 

(1,770)

 

 

(2,448)

 

Unamortized deferred financing costs

 

 

 

 

 

(2,952)

 

 

(4,234)

 

Total long-term debt

 

 

 

 

 

307,778

 

 

305,818

 

Less current maturities

 

 

 

 

 

 

 

 

Long-term debt, net of current maturities

 

 

 

 

$

307,778

 

$

305,818

 

(a)

Interest rate on December 31, 2019

v3.19.3.a.u2
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income Taxes  
Schedule of income tax (benefit) expense from continuing operations and effective income tax rates

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2019

    

2018

    

Current taxes:

 

 

 

 

 

 

 

Domestic

 

$

2,490

 

$

2,558

 

Foreign

 

 

15

 

 

 —

 

 

 

 

2,505

 

 

2,558

 

Deferred taxes:

 

 

 

 

 

 

 

Domestic

 

 

1,147

 

 

(6,897)

 

Foreign

 

 

 —

 

 

 —

 

 

 

 

1,147

 

 

(6,897)

 

Income tax expense (benefit)

 

$

3,652

 

$

(4,339)

 

Loss before income taxes

 

 

 

 

 

 

 

Domestic income (loss)

 

$

801

 

$

(18,383)

 

Foreign

 

 

(1,479)

 

 

(755)

 

Total

 

$

(678)

 

$

(19,138)

 

Effective income tax rate

 

 

(538.6)

%

 

22.7

%

 

Schedule of effective income tax rate reconciliation

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

2019

    

2018

    

Tax at federal statutory rate

 

21.0

%

21.0

%

State income taxes

 

(114.8)

 

4.0

 

Foreign taxes

 

(51.9)

 

(0.1)

 

Tax benefit for U.K. sale

 

345.2

 

17.5

 

Valuation allowance

 

(474.7)

 

(13.5)

 

Unrecognized tax benefits

 

(34.5)

 

(4.8)

 

Tax credits

 

(108.4)

 

2.5

 

Deferred tax impact of enacted tax rate and law changes

 

 —

 

(0.7)

 

Permanent items

 

(120.6)

 

(1.8)

 

Other

 

0.1

 

(1.4)

 

Effective income tax rate

 

(538.6)

%

22.7

%

 

Schedule of components of deferred tax assets and liabilities

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2019

 

2018

 

Deferred tax assets:

 

 

 

 

 

 

 

Accrued expense

 

$

2,426

 

$

2,553

 

Net operating loss carryforward

 

 

1,216

 

 

5,589

 

Deferred financing costs

 

 

400

 

 

553

 

Stock compensation

 

 

892

 

 

861

 

Tax credit carryforward

 

 

17

 

 

1,118

 

Interest limitation

 

 

8,773

 

 

4,412

 

Lease liability

 

 

1,728

 

 

 —

 

Other

 

 

669

 

 

927

 

Total gross deferred tax assets

 

 

16,121

 

 

16,013

 

Valuation allowance

 

 

(5,638)

 

 

(6,823)

 

Net deferred tax assets

 

 

10,483

 

 

9,190

 

Deferred tax liabilities:

 

 

 

 

 

 

 

Plant, equipment and leasehold improvements

 

 

(5,505)

 

 

(3,851)

 

Intangible assets

 

 

(8,877)

 

 

(9,311)

 

Right-of-use assets

 

 

(1,486)

 

 

 —

 

Prepaid expenses and other

 

 

(1,511)

 

 

(1,777)

 

Total gross deferred tax liabilities

 

 

(17,379)

 

 

(14,939)

 

Net deferred tax liabilities

 

$

(6,896)

 

$

(5,749)

 

 

Unrecognized Tax Benefits

 

 

 

 

 

 

 

 

Balance as of December 31, 2018

 

$

2,044

Increase related to current year tax position

 

 

349

Decrease related to prior year tax position

 

 

(97)

Decrease related to settlements with tax authorities, net of federal benefit

 

 

(124)

Balance as of December 31, 2019

 

$

2,172

 

v3.19.3.a.u2
Loss per Share (Tables)
12 Months Ended
Dec. 31, 2019
Loss per Share  
Computation of basic and diluted loss per share

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2019

    

2018

 

Numerator:

 

 

 

 

 

 

 

Net loss from continuing operations

 

$

(4,330)

 

$

(14,799)

 

Net loss from a discontinued operation, net of taxes

 

 

(124)

 

 

(22,663)

 

Net loss

 

$

(4,454)

 

$

(37,462)

 

Denominator:

 

 

 

 

 

 

 

Basic and diluted EPS—weighted average common shares outstanding

 

 

11,196,710

 

 

11,149,554

 

Basic and Diluted EPS:

 

 

 

 

 

 

 

Loss per share from continuing operations

 

$

(0.39)

 

$

(1.33)

 

Loss per share from discontinued operations, net of taxes

 

 

(0.01)

 

 

(2.03)

 

Loss per share

 

$

(0.40)

 

$

(3.36)

 

 

v3.19.3.a.u2
Stock Based Compensation (Tables)
12 Months Ended
Dec. 31, 2019
Summary of changes in outstanding restricted stock units

 

 

 

 

 

 

 

    

 

    

  Weighted-

 

 

 

 

Average

 

 

 

 

Grant-Date

 

 

Shares 

 

Fair Value

Outstanding as of December 31, 2018

 

68,649

 

$

6.25

Vested

 

(57,563)

 

 

3.15

Forfeited

 

(3,739)

 

 

22.01

Outstanding as of December 31, 2019

 

7,347

 

$

22.49

 

Summary of changes in number of outstanding cash performance units

 

 

 

 

 

Cash Performance Awards

Outstanding as of December 31, 2018

 

425,012

Vested

 

(212,505)

Forfeited

 

(71,435)

Outstanding as of December 31, 2019

 

141,072

 

Omnibus Plan  
Summary of outstanding and exercisable stock options

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

 

 

 

Weighted-

    

 

 

 

 

Weighted-

 

 

Average

 

 

 

 

 

Average

 

 

Remaining

 

 

 

 

 

Exercise

 

 

Contractual Term

 

 

 

Options

 

Price

 

 

(in Years)

 

 

 

 

 

 

 

 

 

 

 

Outstanding as of December 31, 2018

 

910,627

 

$

14.99

 

 

 

 

Forfeited

 

(117,543)

 

 

15.48

 

 

 

 

Outstanding as of December 31, 2019

 

793,084

 

$

14.91

 

 

7.40

 

Options vested and exercisable as of December 31, 2019

 

542,513

 

 

19.01

 

 

7.15

 

Options vested and expected to vest as of December 31, 2019

 

793,084

 

 

14.91

 

 

7.40

 

 

Summary of activity in non-vested stock options

 

 

 

 

 

 

 

    

 

    

 

 

 

 

 

 

Weighted-

 

 

 

 

Average

 

 

 

 

Grant-Date

 

 

Number

 

Fair Value

Non-vested as of December 31, 2018

 

605,352

 

$

3.14

Forfeited

 

(78,676)

 

 

3.39

Vested

 

(276,105)

 

 

4.20

Non-vested as of December 31, 2019

 

250,571

 

$

1.90

 

 

 

 

 

 

 

Schedule of vesting for unvested options

 

 

 

2020

 

200,364

2021

 

50,207

Total unvested options as of December 31, 2019

 

250,571

 

Schedule of valuation assumptions

 

 

 

 

 

 

December 31, 2018

 

Expected term in years

 

6.0

 

Volatility

 

48.0

%

Risk-free interest rate

 

2.7

%

Dividend yield

 

%

 

Weighted average grant date fair value of options granted

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

    

2019

    

2018

 

Weighted Average Grant-Date Fair Value of Options Granted

 

$

n/a

 

$

1.21

 

 

 

 

 

 

 

 

 

 

v3.19.3.a.u2
Segment Reporting (Tables)
12 Months Ended
Dec. 31, 2019
Segment Reporting  
Schedule of revenue and EBITDA of the company's reportable segments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

EBITDA

 

 

December 31,

 

December 31,

 

    

2019

    

2018

    

2019

    

2018

U.S. Debit and Credit

 

$

213,141

 

$

178,597

 

$

46,227

 

$

34,213

U.S. Prepaid Debit

 

 

64,330

 

 

69,199

 

 

22,456

 

 

23,782

Other

 

 

1,679

 

 

9,891

 

 

(27,468)

 

 

(35,297)

Intersegment eliminations(a)

 

 

(1,077)

 

 

(1,873)

 

 

 —

 

 

 —

Total:

 

$

278,073

 

$

255,814

 

$

41,215

 

$

22,698


(a)

Amounts include the elimination of sales between segments for consolidation.

Schedule of reconciliation of total segment EBITDA to income before taxes

 

 

 

 

 

 

 

 

 

December 31,

 

    

2019

    

2018

Total segment EBITDA from continuing operations

 

$

41,215

 

$

22,698

Interest, net

 

 

(24,891)

 

 

(23,431)

Income tax benefit (expense)

 

 

(3,652)

 

 

4,339

Depreciation and amortization

 

 

(17,002)

 

 

(18,405)

Net loss from continuing operations

 

$

(4,330)

 

$

(14,799)

 

Schedule of total assets of the company's reportable segments

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2019

    

2018

 

U.S. Debit and Credit

 

$

176,496

 

$

169,567

 

U.S. Prepaid Debit

 

 

25,259

 

 

25,117

 

Other

 

 

11,732

 

 

12,520

 

Total assets

 

$

213,487

 

$

207,204

 

 

Schedule of net sales from product and services sold by the company

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

    

2019

    

2018

    

Product net sales(a)

 

$

143,941

 

$

125,069

 

Services net sales(b)

 

 

134,132

 

 

130,745

 

Total net sales:

 

$

278,073

 

$

255,814

 


(a)

 “Products” net sales include the design and production of Financial Payment Cards in contact-EMV, Dual-Interface EMV, metal, contactless and magnetic stripe card formats. The Company also generates “Products” revenue from the sale of Card@Once printers and consumables, private label credit cards and retail gift cards.

 

“Services” net sales include revenue from the personalization and fulfillment of Financial Payment Cards, providing tamper-evident security packaging and fulfillment services to Prepaid Debit Card program managers and software as a service personalization of instant issuance debit cards. The Company also generates “Services” revenue from usage fees generated from the Company’s patented card design software, known as MYCA, which provides customers and cardholders the ability to design cards on the internet and customize cards with individualized digital images. “Services” revenue is also generated from personalizing retail gift cards, historically generated in Canada prior to the disposition.

v3.19.3.a.u2
Quarterly Financial Information (Unaudited) (Tables)
12 Months Ended
Dec. 31, 2019
Quarterly Financial Information (Unaudited)  
Schedule of summarized quarterly results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

 

 

 

 

 

 

 

 December 31, 

 

2019 by Quarter:

    

Q1

    

Q2

    

Q3

    

Q4

    

2019

 

Net sales

 

$

66,866

 

$

66,901

 

$

71,681

 

$

72,625

 

$

278,073

 

Gross profit

 

$

21,521

 

$

22,381

 

$

25,419

 

$

21,998

 

$

91,319

 

Net income (loss) from continuing operations

 

$

(3,097)

 

$

1,552

 

$

(656)

 

$

(2,129)

 

$

(4,330)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings (loss) per share from continuing operations

 

$

(0.28)

 

$

0.14

 

$

(0.06)

 

$

(0.19)

 

$

(0.39)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

2018 by Quarter:

    

Q1

    

Q2

    

Q3

    

Q4

    

2018

 

Net sales

 

$

54,857

 

$

61,454

 

$

70,987

 

$

68,516

 

$

255,814

 

Gross profit

 

$

14,428

 

$

19,875

 

$

23,308

 

$

20,979

 

$

78,590

 

Net loss from continuing operations

 

$

(5,677)

 

$

(802)

 

$

(1,085)

 

$

(7,235)

 

$

(14,799)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share from continuing operations

 

$

(0.51)

 

$

(0.07)

 

$

(0.10)

 

$

(0.65)

 

$

(1.33)

 

 

v3.19.3.a.u2
Business (Details)
$ in Thousands
1 Months Ended 12 Months Ended
Feb. 28, 2018
item
Dec. 31, 2019
USD ($)
item
Dec. 31, 2018
USD ($)
Business      
Minimum number of payment card brands which certify card services | item   1  
Number of personalization operations consolidated | item 3    
Number of facilities personalization operations were consolidated into | item 2    
Accelerated depreciation     $ 2,398
Severance charge     552
Termination charge     $ 476
Proceeds from Divestiture of Interest in Subsidiaries and Affiliates   $ 1,451  
Reclassification of cumulative translation adjustment from accumulated other comprehensive income   $ 1,329  
v3.19.3.a.u2
Summary of Significant Accounting Policies - Trade Accounts Receivable (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Trade Accounts Receivable      
Trade accounts receivable $ 39,004 $ 36,428  
Unbilled accounts receivable 4,223 7,577  
Trade and unbilled accounts receivable 43,227 44,005  
Less allowance for doubtful accounts (395) (211) $ (48)
Accounts receivable, net $ 42,832 $ 43,794  
v3.19.3.a.u2
Summary of Significant Accounting Policies - Bad debts and Concentration of Credit Risk (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Allowance for bad debt and credit activity    
Beginning balance $ 211 $ 48
Bad debt expense 228 169
Write-off of uncollectible accounts (37) (6)
Currency translation adjustment (7)  
Ending balance $ 395 $ 211
Customer Concentration Risk | Net sales    
Allowance for bad debt and credit activity    
Concentration risk (as a percent) 18.00% 19.00%
v3.19.3.a.u2
Summary of Significant Accounting Policies - Plant, Equipment and Leasehold Improvements (Details)
12 Months Ended
Dec. 31, 2019
Minimum  
Plant, Equipment and Leasehold Improvements  
Useful life (in years) 3 years
Maximum  
Plant, Equipment and Leasehold Improvements  
Useful life (in years) 10 years
v3.19.3.a.u2
Summary of Significant Accounting Policies - Foreign Currency Translation (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Foreign Currency Translation    
Foreign currency (losses) gains $ (1,327) $ (311)
Reclassification adjustment to foreign currency loss $ (1,329)  
v3.19.3.a.u2
Summary of Significant Accounting Policies - Other (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Jan. 01, 2019
Recently Issued Accounting Pronouncements    
Lease, Practical Expedient, Use of Hindsight false  
Lease, Practical Expedients, Package true  
Operating lease liabilities $ 7,350  
Accounting Standards Update 2016-02    
Recently Issued Accounting Pronouncements    
Right-to-use assets   $ 8,025
Operating lease liabilities   $ 8,813
v3.19.3.a.u2
Summary of Significant Accounting Policies - Components of Operating and Finance Lease Expense (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
Operating lease cost:  
Total operating lease costs $ 2,625
Finance lease cost:  
Amortization of right-of-use assets 886
Interest on lease liabilities 290
Total financing lease cost $ 1,176
v3.19.3.a.u2
Summary of Significant Accounting Policies - Operating and Financing Leases (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Leases    
Operating lease right-of-use assets, net of amortization $ 6,312  
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] pmts:PropertyPlantAndEquipmentOperatingLeaseRightOfUseAsse  
Operating lease liability (current) $ 2,283  
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] Accrued Liabilities, Current  
Long-term operating liability $ 5,067  
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] Other Liabilities, Noncurrent  
Total operating lease liabilities $ 7,350  
Property, equipment and leasehold improvements 80,577 $ 92,856
Accumulated depreciation (44,801) (53,746)
Total financing leases in property, equipment and leasehold improvements, net 42,088 $ 39,110
Financing lease liability (current) $ 2,211  
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] Accrued Liabilities, Current  
Long-term financing liability $ 3,886  
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] Other Liabilities, Noncurrent  
Total financing lease liabilities $ 6,097  
Financing leases    
Leases    
Property, equipment and leasehold improvements 8,256  
Accumulated depreciation (1,094)  
Total financing leases in property, equipment and leasehold improvements, net $ 7,162  
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] pmts:PropertyPlantAndEquipmentOperatingLeaseRightOfUseAsse  
v3.19.3.a.u2
Summary of Significant Accounting Policies - Components of Lease Expense (Details)
Dec. 31, 2019
Weighted Average Remaining Lease Term  
Weighted Average Remaining Lease Term - Operating Leases 3 years 4 months 24 days
Weighted Average Remaining Lease Term - Financing Leases 2 years 10 months 10 days
Weighted Average Discount Rate  
Weighted Average Discount Rate - Operating Leases 8.94%
Weighted Average Discount Rate - Financing Leases 9.28%
v3.19.3.a.u2
Summary of Significant Accounting Policies - Lease Maturity (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
Operating Leases  
2020 $ 2,854
2021 2,646
2022 1,371
2023 1,097
2024 602
Total operating lease payment 8,570
Less imputed interest (1,220)
Total operating lease liabilities 7,350
Cash paid for amounts included in the measurement of lease liabilities 1,973
Financing Leases  
2020 2,659
2021 2,043
2022 1,565
2023 676
Total financing lease payment 6,943
Less imputed interest (846)
Total financing lease liabilities $ 6,097
v3.19.3.a.u2
Summary of Significant Accounting Policies - Operating and Capital Leases (Details)
$ in Thousands
Dec. 31, 2018
USD ($)
Future Cash Payments, Capital Lease:  
2019 $ 521
2020 474
2021 243
2022 256
2023 71
Total 1,565
Future Cash Payments, Operating Leases:  
2019 2,927
2020 2,771
2021 2,512
2022 1,243
2023 971
Thereafter 652
Total $ 11,076
v3.19.3.a.u2
Net Sales (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Disaggregation of Revenue    
Net Sales $ 278,073 $ 255,814
Operating Segments | U.S. Debit and Credit    
Disaggregation of Revenue    
Net Sales 213,141 178,597
Operating Segments | U.S. Prepaid Debit    
Disaggregation of Revenue    
Net Sales 64,330 69,199
Operating Segments | Other    
Disaggregation of Revenue    
Net Sales 1,679 9,891
Intersegment eliminations    
Disaggregation of Revenue    
Net Sales (1,077) (1,873)
Products    
Disaggregation of Revenue    
Net Sales 143,941 125,069
Products | Operating Segments | U.S. Debit and Credit    
Disaggregation of Revenue    
Net Sales 144,541 122,119
Products | Operating Segments | Other    
Disaggregation of Revenue    
Net Sales 396 4,398
Products | Intersegment eliminations    
Disaggregation of Revenue    
Net Sales (996) (1,448)
Services    
Disaggregation of Revenue    
Net Sales 134,132 130,745
Services | Operating Segments | U.S. Debit and Credit    
Disaggregation of Revenue    
Net Sales 68,600 56,478
Services | Operating Segments | U.S. Prepaid Debit    
Disaggregation of Revenue    
Net Sales 64,330 69,199
Services | Operating Segments | Other    
Disaggregation of Revenue    
Net Sales 1,283 5,493
Services | Intersegment eliminations    
Disaggregation of Revenue    
Net Sales $ (81) $ (425)
v3.19.3.a.u2
Discontinued Operation (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2019
Dec. 31, 2018
Discontinued Operation and Disposition      
Impairment of goodwill     $ 6,366
Reclassification adjustment to foreign currency loss   $ (1,329)  
Major line items constituting the (loss) income of the discontinued operation      
Net (loss) from discontinued operation   (124) (22,663)
U.K. Limited | Sold      
Discontinued Operation and Disposition      
Impairment of goodwill $ 6,366    
Impairment of intangible assets $ 1,249    
Loss from a discontinued operation, net of taxes     7,248
Reclassification adjustment to foreign currency loss     (3,983)
Major line items constituting the (loss) income of the discontinued operation      
Total net sales     10,741
Total cost of sales     10,222
Selling general and administrative   142 4,336
Impairment     7,615
Other expense (income), net     4,006
Pretax loss from discontinued operation   (142) (15,438)
Pre-tax loss on sale of discontinued operation     (7,248)
Total pretax loss on discontinued operation   (142) (22,686)
Income tax benefit   18 23
Net (loss) from discontinued operation   $ (124) $ (22,663)
v3.19.3.a.u2
Inventories (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Inventories    
Raw materials $ 16,492 $ 8,235
Finished goods 5,047 2,991
Inventory reserve (1,347) (1,399)
Inventory $ 20,192 $ 9,827
v3.19.3.a.u2
Plant, Equipment, Leasehold Improvements and Operating Lease Right-of-use Assets (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Plant, Equipment and Leasehold Improvements    
Plant, equipment and leasehold improvements, gross $ 80,577 $ 92,856
Less accumulated depreciation (44,801) (53,746)
Operating lease right-of-use assets, net of amortization 6,312  
Total financing leases in property, equipment and leasehold improvements, net 42,088 39,110
Depreciation 12,384 13,749
Impairments of the Company's plant, equipment, and leasehold improvement assets 0 0
Machinery and equipment    
Plant, Equipment and Leasehold Improvements    
Plant, equipment and leasehold improvements, gross 52,212 62,067
Machinery and equipment under financing leases    
Plant, Equipment and Leasehold Improvements    
Plant, equipment and leasehold improvements, gross 8,256 1,812
Furniture, fixtures and computer equipment    
Plant, Equipment and Leasehold Improvements    
Plant, equipment and leasehold improvements, gross 4,749 7,730
Leasehold improvements    
Plant, Equipment and Leasehold Improvements    
Plant, equipment and leasehold improvements, gross 14,905 19,651
Construction in progress    
Plant, Equipment and Leasehold Improvements    
Plant, equipment and leasehold improvements, gross $ 455 $ 1,596
v3.19.3.a.u2
Goodwill and Other Intangible Assets - Goodwill by Reporting Segment (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2019
Goodwill $ 47,150 $ 47,150
Impairment of goodwill 6,366  
Operating Segments | U.S. Debit and Credit    
Goodwill $ 47,150 $ 47,150
v3.19.3.a.u2
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($)
3 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2019
Dec. 31, 2018
Intangible Assets      
Intangible asset impairment charge   $ 0  
Weighted Average Life   15 years 8 months 12 days  
Intangible amortization expense   $ 4,635,000 $ 4,656,000
Intangible assets subject to amortization, Cost   66,376,000 66,376,000
Intangible assets subject to amortization, Accumulated Amortization   (35,574,000) (30,939,000)
Intangible assets subject to amortization, Net Book Value   $ 30,802,000 35,437,000
Customer relationships      
Intangible Assets      
Intangible asset impairment charge $ 1,249,000    
Weighted Average Life   17 years 2 months 12 days  
Intangible assets subject to amortization, Cost   $ 55,454,000 55,454,000
Intangible assets subject to amortization, Accumulated Amortization   (28,865,000) (25,587,000)
Intangible assets subject to amortization, Net Book Value   $ 26,589,000 29,867,000
Technology and software      
Intangible Assets      
Weighted Average Life   8 years  
Intangible assets subject to amortization, Cost   $ 7,101,000 7,101,000
Intangible assets subject to amortization, Accumulated Amortization   (4,952,000) (4,024,000)
Intangible assets subject to amortization, Net Book Value   $ 2,149,000 3,077,000
Trademarks      
Intangible Assets      
Weighted Average Life   8 years 8 months 12 days  
Intangible assets subject to amortization, Cost   $ 3,330,000 3,330,000
Intangible assets subject to amortization, Accumulated Amortization   (1,266,000) (877,000)
Intangible assets subject to amortization, Net Book Value   $ 2,064,000 2,453,000
Non-compete agreements      
Intangible Assets      
Weighted Average Life   5 years  
Intangible assets subject to amortization, Cost   $ 491,000 491,000
Intangible assets subject to amortization, Accumulated Amortization   $ (491,000) (451,000)
Intangible assets subject to amortization, Net Book Value     $ 40,000
v3.19.3.a.u2
Goodwill and Other Intangible Assets - Future Aggregate Amortization Expense (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Estimated future aggregate amortization expense    
2020 $ 4,595  
2021 4,352  
2022 3,867  
2023 3,867  
2024 3,530  
Thereafter 10,591  
Intangible assets subject to amortization, Net Book Value $ 30,802 $ 35,437
v3.19.3.a.u2
Fair Value of Financial Instruments (Details) - First Lien Credit Facility - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Liabilities:    
Carrying amount $ 312,500 $ 312,500
Term Loan    
Liabilities:    
Carrying amount 312,500 312,500
Long-term debt 234,375 203,125
Level 2 | Term Loan    
Liabilities:    
Long-term debt $ 234,375 $ 203,125
v3.19.3.a.u2
Accrued Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Accrued Liabilities    
Accrued payroll and related employee expenses $ 3,954 $ 4,040
Accrued employee performance bonus 3,920 7,137
Accrued Interest 4,951 5,058
Operating and financing lease liability (current portion) 4,494 521
Other 5,501 7,097
Total accrued expenses $ 22,820 $ 23,853
v3.19.3.a.u2
Long-Term Debt and Credit Facility - Long-Term Debt (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Long-term Debt    
Unamortized discount $ (1,770) $ (2,448)
Unamortized deferred financing costs (2,952) (4,234)
Total long-term debt 307,778 305,818
Long-term debt, net of current maturities $ 307,778 305,818
First Lien Credit Facility    
Long-term Debt    
Interest rate (as a percent) 6.71%  
Long-term debt $ 312,500 $ 312,500
v3.19.3.a.u2
Long-Term Debt and Credit Facility - First Lien Credit Facility (Details)
3 Months Ended 12 Months Ended
Oct. 15, 2015
USD ($)
Aug. 17, 2015
USD ($)
Dec. 31, 2015
USD ($)
Dec. 31, 2019
USD ($)
letter
Mar. 05, 2020
USD ($)
Dec. 31, 2018
USD ($)
Long-term Debt            
Fee on outstanding letters of credit (as a percent)       4.50%    
Fronting fee for letters of credit (as a percent)       0.125%    
Number of outstanding letters of credit | letter       1    
Letters of credit outstanding       $ 50,000    
Accrued interest       $ 4,951,000   $ 5,058,000
First Lien Credit Facility            
Long-term Debt            
Maximum net leverage ratio   7.00        
Eurodollar rate | First Lien Credit Facility            
Long-term Debt            
Applicable margin over reference rate (as a percent)       4.50%    
Eurodollar rate | First Lien Credit Facility | Minimum            
Long-term Debt            
Interest rate (as a percent)       1.00%    
Base rate | First Lien Credit Facility            
Long-term Debt            
Applicable margin over reference rate (as a percent)       3.50%    
Term Loan | First Lien Credit Facility            
Long-term Debt            
Maximum borrowing capacity   $ 435,000,000        
Amount repaid $ 112,500,000   $ 10,000,000      
Revolving Credit Facility            
Long-term Debt            
Amount outstanding       $ 0    
Available for borrowing       $ 19,950,000    
Revolving Credit Facility | Minimum            
Long-term Debt            
Unused commitment fee (as a percent)       0.375%    
Revolving Credit Facility | Maximum            
Long-term Debt            
Unused commitment fee (as a percent)       0.50%    
Revolving Credit Facility | First Lien Credit Facility            
Long-term Debt            
Maximum borrowing capacity   $ 40,000,000        
Amount drawn to trigger net leverage requirement (as a percent)       50.00%    
Amount outstanding       $ 0 $ 0  
Revolving Credit Facility | Senior Credit Facility            
Long-term Debt            
Maximum borrowing capacity         $ 30,000,000  
Revolving Credit Facility | Base rate            
Long-term Debt            
Applicable margin over reference rate (as a percent)       3.50%    
v3.19.3.a.u2
Income Taxes - Continuing Operations (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Current taxes:    
Domestic $ 2,490 $ 2,558
Foreign 15  
Current income tax (benefit) expense 2,505 2,558
Deferred taxes:    
Domestic 1,147 (6,897)
Deferred income tax (benefit) expense 1,147 (6,897)
Income tax expense (benefit) 3,652 (4,339)
Loss before income taxes    
Domestic income (loss) 801 (18,383)
Foreign (1,479) (755)
Income (loss) before income taxes $ (678) $ (19,138)
Effective income tax rate (as a percent) (538.60%) 22.70%
Tax expense recorded related to valuation allowance $ 1,185  
v3.19.3.a.u2
Income Taxes – Continuing Operations - Effective Income Tax Rate Reconciliation (Details)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Effective Income Tax Rate Reconciliation    
Tax at federal statutory rate (as a percent) 21.00% 21.00%
State income taxes (as a percent) (114.80%) 4.00%
Foreign taxes (as a percent) (51.90%) (0.10%)
Tax benefit for U.K. sale 345.20% 17.50%
Valuation allowance (as a percent) (474.70%) (13.50%)
Unrecognized tax benefits (as a percent) (34.50%) (4.80%)
Tax credits (as a percent) (108.40%) 2.50%
Deferred tax impact of enacted tax rate and law changes (as a percent)   (0.70%)
Permanent items (as a percent) (120.60%) (1.80%)
Other (as a percent) 0.10% (1.40%)
Effective income tax rate (as a percent) (538.60%) 22.70%
v3.19.3.a.u2
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Deferred tax assets:    
Accrued expense $ 2,426 $ 2,553
Net operating loss carryforward 1,216 5,589
Deferred financing costs 400 553
Stock compensation 892 861
Tax credit carryforward 17 1,118
Interest limitation 8,773 4,412
Lease liability 1,728  
Other 669 927
Total gross deferred tax asset 16,121 16,013
Valuation allowance (5,638) (6,823)
Net deferred tax assets 10,483 9,190
Deferred tax liabilities:    
Plant, property and leasehold improvements (5,505) (3,851)
Intangible assets (8,877) (9,311)
Right-to-use assets (1,486)  
Prepaid expense and other (1,511) (1,777)
Total gross deferred tax liabilities (17,379) (14,939)
Net deferred tax liabilities $ (6,896) $ (5,749)
v3.19.3.a.u2
Income Taxes - Foreign Currency Exchange Rate Fluctuations, Changes in Net Operating Losses and Credit Carryforwards (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
Valuation allowance  
Net increase in valuation allowance $ 1,185
State  
Operating Loss Carryforwards  
Research and development tax credit carryforwards 108
Foreign  
Operating Loss Carryforwards  
Operating Loss Carryforwards $ 3,668
v3.19.3.a.u2
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Unrecognized Tax Benefits    
Unrecognized Tax Benefits, Beginning Balance $ 2,044  
Increase related to current year tax position 349  
Decrease related to prior year tax position (97)  
Decrease related to settlements with tax authorities, net of federal benefit (124)  
Unrecognized Tax Benefits, Ending Balance 2,172  
Unrecognized tax benefits, accrued interest and penalties $ 238 $ 221
v3.19.3.a.u2
Stockholders' Deficit (Details)
Dec. 31, 2019
Vote / shares
$ / shares
Dec. 31, 2018
$ / shares
Dividends, Common Stock [Abstract]    
Common shares, par value (in dollars per share) | $ / shares $ 0.001 $ 0.001
Common Stock    
Class of Stock    
Voting rights per share | Vote / shares 1  
v3.19.3.a.u2
Loss per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Numerator:                    
Net loss from continuing operations $ (2,129) $ (656) $ 1,552 $ (3,097) $ (7,235) $ (1,085) $ (802) $ (5,677) $ (4,330) $ (14,799)
Net loss from discontinued operation                 (124) (22,663)
Net loss                 $ (4,454) $ (37,462)
Denominator:                    
Basic and diluted EPS—weighted average common shares outstanding (in shares)                 11,196,710 11,149,554
Basic and diluted EPS:                    
Loss per share from continuing operations (in dollars per share) $ (0.19) $ (0.06) $ 0.14 $ (0.28) $ (0.65) $ (0.10) $ (0.07) $ (0.51) $ (0.39) $ (1.33)
Loss per share from discontinued operations, net of taxes (in dollars per share)                 (0.01) (2.03)
Loss per share (in dollars per share)                 $ (0.40) $ (3.36)
Stock Options                    
Outstanding stock based awards                    
Potential dilutive effect of share-based compensation excluded (in shares)                 800,431  
Restricted stock units                    
Outstanding stock based awards                    
Potential dilutive effect of share-based compensation excluded (in shares)                   985,876
v3.19.3.a.u2
Commitments and Contingencies: Litigation Settlement - Commitments (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Commitments and Contingencies: Litigation Settlement.    
Operating leases, rent expense $ 3,344 $ 3,767
v3.19.3.a.u2
Commitments and Contingencies: Litigation Settlement - Contingencies (Details)
12 Months Ended
Dec. 18, 2019
USD ($)
Jun. 30, 2015
plaintiff
Dec. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Heckermann Montross Suit | Pending Litigation        
Commitments and Contingencies        
Loss contingency accrual     $ 0 $ 0
Heckermann Montross Suit | Settled Litigation        
Commitments and Contingencies        
Settlement expense $ 343,000      
CPI Card Group Inc. v. Multi Packaging Solutions, Inc., et al. Second Case | Settled Litigation        
Commitments and Contingencies        
Number of purported shareholders that have filed lawsuits | plaintiff   2    
Proceeds from settlements     $ 6,000,000  
v3.19.3.a.u2
Employee Benefit Plan (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Employee Benefits    
Employee benefit plan, Company's portion vested at time of match (as a percent) 100.00%  
Employee benefit plan expense $ 1,359 $ 1,235
Participant's first 3% of deferrals    
Employee Benefits    
Employee benefit plan, Company match (as a percent) 100.00%  
Participant's second 2% of deferrals    
Employee Benefits    
Employee benefit plan, Company match (as a percent) 50.00%  
v3.19.3.a.u2
Stock Based Compensation - Omnibus Incentive Plan (Details) - USD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Sep. 25, 2017
Cash Performance        
Stock based compensation        
Vesting period 3 years      
Valuation Assumptions:        
Unrecognized compensation expense     $ 663  
Omnibus Plan        
Valuation Assumptions:        
Unrecognized compensation expense $ 126      
Period over which compensation expense expected to recognize 9 months 18 days      
Omnibus Plan | Stock Options        
Stock based compensation        
Number of shares authorized       1,200,000
Number of shares available for grant 278,199      
Stock options granted (in shares) 0 159,755    
Stock option life (in years) 10 years      
Number of shares        
Balance at beginning of year (in shares) 910,627      
Granted (in shares) 0 159,755    
Forfeited (in shares) (117,543)      
Balance at end of year (in shares) 793,084 910,627    
Options: Options vested and exercisable 542,513      
Options: Options vested and expected to vest 793,084      
Weighted-Average Exercise Price        
Balance at beginning of year (in dollars per share) $ 14.99      
Forfeited (in dollars per share) 15.48      
Balance at end of year (in dollars per share) 14.91 $ 14.99    
Weighted-Average Exercise Price: Options vested and exercisable 19.01      
Weighted-Average Exercise Price: Options vested and expected to vest $ 14.91      
Weighted- Average Remaining Contractual Term (in Years)        
Balance (in years) 7 years 4 months 24 days      
Weighted-Average Remaining Contractual Term (in Years): Options vested and exercisable 7 years 1 month 24 days      
Weighted-Average Remaining Contractual Term (in Years): Options vested and expected to vest 7 years 4 months 24 days      
Number of unvested options scheduled to vest        
Non-Vested Options as of beginning of period 605,352      
Granted (in shares) 0 159,755    
Forfeited (in shares) (78,676)      
Vested (in shares) (276,105)      
Non-Vested Options as of end of period 250,571 605,352    
Weighted-Average Grant Date Fair Value        
Non-Vested, beginning balance $ 3.14      
Granted: Weighted-Average Grant Date Fair Value   $ 1.21    
Forfeited: Weighted-Average Grant Date Fair Value 3.39      
Vested: Weighted-Average Grant Date Fair Value 4.20      
Non-Vested, ending balance $ 1.90 $ 3.14    
Valuation Assumptions:        
Expected term in years   6 years    
Volatility (as a percent)   48.00%    
Risk-free interest rate   2.70%    
Omnibus Plan | Stock Options | Maximum        
Valuation Assumptions:        
Volatility rate, peer group determined by tech companies that completed IPO within the state year range (in years) 10 years      
Awards vesting beginning the first anniversary of the grant date | Stock Options        
Stock based compensation        
Vesting period 3 years      
2020 | Omnibus Plan | Stock Options        
Number of unvested options scheduled to vest        
Non-Vested Options as of end of period 200,364      
2021 | Omnibus Plan | Stock Options        
Number of unvested options scheduled to vest        
Non-Vested Options as of end of period 50,207      
v3.19.3.a.u2
Stock Based Compensation - Restricted Stock Units (Details) - Omnibus Plan - USD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2019
Weighted Average Grant Date Fair Value      
Unrecognized compensation expense     $ 126
Period over which compensation expense expected to recognize 9 months 18 days    
Restricted stock units      
Number of Restricted Stock Units      
Units outstanding at the beginning of the period (in shares) 68,649    
Granted (in shares) 0 75,188  
Vested (in shares) (57,563)    
Forfeited (in shares) (3,739)    
Units outstanding at the end of the period (in shares) 7,347 68,649  
Weighted Average Grant Date Fair Value      
Units outstanding at the beginning of the period (in dollars per shares) $ 6.25    
Vested (in dollars per share) 3.15    
Forfeited (in dollars per share) 22.01    
Units outstanding at the end of the period (in dollars per shares) $ 22.49 $ 6.25  
Vesting period 1 year    
Compensation expense $ 250 $ 961  
Unvested restricted stock (in units) 7,347 68,649 7,347
v3.19.3.a.u2
Stock Based Compensation - Cash Performance Units (Details) - Cash Performance - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2017
Number of Cash Performance Units    
Units outstanding at the beginning of the period (in shares) 425,012  
Granted (in shares)   932,837
Vested (in shares) (212,505)  
Forfeited (in shares) (71,435)  
Units outstanding at the end of the period (in shares) 141,072  
Vesting period 3 years  
Accrued expenses    
Number of Cash Performance Units    
Cash performance liability $ 65  
v3.19.3.a.u2
Stock Based Compensation - Option Plan (Details) - Stock Options - Option Plan - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Stock based compensation    
Compensation expense $ 0 $ 0
Number of shares    
Exercised (in shares) 6,600  
Exercisable (in shares) 0  
v3.19.3.a.u2
Segment Reporting - Revenue and EBITDA from Continuing Operations (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Segment Reporting    
Revenue $ 278,073 $ 255,814
EBITDA 41,215 22,698
U.S. Debit and Credit    
Segment Reporting    
EBITDA 46,227 34,213
U.S. Prepaid Debit    
Segment Reporting    
EBITDA 22,456 23,782
Other    
Segment Reporting    
EBITDA (27,468) (35,297)
Operating Segments | U.S. Debit and Credit    
Segment Reporting    
Revenue 213,141 178,597
Operating Segments | U.S. Prepaid Debit    
Segment Reporting    
Revenue 64,330 69,199
Operating Segments | Other    
Segment Reporting    
Revenue 1,679 9,891
Intersegment eliminations    
Segment Reporting    
Revenue $ (1,077) $ (1,873)
v3.19.3.a.u2
Segment Reporting - Reconciliation of EBITDA from Continuing Operations to "Net income (loss) from continuing operations" (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Reconciliation of total segment EBITDA to income before taxes                    
Total segment EBITDA from continuing operations                 $ 41,215 $ 22,698
Interest, net                 (24,891) (23,431)
Income tax (expense) benefit                 (3,652) 4,339
Depreciation and amortization                 (17,002) (18,405)
Net loss from continuing operations $ (2,129) $ (656) $ 1,552 $ (3,097) $ (7,235) $ (1,085) $ (802) $ (5,677) $ (4,330) $ (14,799)
v3.19.3.a.u2
Segment Reporting - Balance Sheet Data (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Segment Reporting    
Total assets $ 213,487 $ 207,204
Operating Segments    
Segment Reporting    
Total assets 213,487 207,204
Operating Segments | U.S. Debit and Credit    
Segment Reporting    
Total assets 176,496 169,567
Operating Segments | U.S. Prepaid Debit    
Segment Reporting    
Total assets 25,259 25,117
Operating Segments | Other    
Segment Reporting    
Total assets $ 11,732 $ 12,520
v3.19.3.a.u2
Segment Reporting - Net Sales by Product and Services (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Segment Reporting    
Total net sales $ 278,073 $ 255,814
Products    
Segment Reporting    
Total net sales 143,941 125,069
Services    
Segment Reporting    
Total net sales $ 134,132 $ 130,745
v3.19.3.a.u2
Quarterly Financial Information (Unaudited) (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Quarterly Financial Information (Unaudited)                    
Total net sales $ 72,625 $ 71,681 $ 66,901 $ 66,866 $ 68,516 $ 70,987 $ 61,454 $ 54,857 $ 278,073 $ 255,814
Gross profit 21,998 25,419 22,381 21,521 20,979 23,308 19,875 14,428 91,319 78,590
Net income (loss) from continuing operations $ (2,129) $ (656) $ 1,552 $ (3,097) $ (7,235) $ (1,085) $ (802) $ (5,677) $ (4,330) $ (14,799)
Basic and diluted loss per share:                    
earnings (loss) per share from continuing operations (in dollars per share) $ (0.19) $ (0.06) $ 0.14 $ (0.28) $ (0.65) $ (0.10) $ (0.07) $ (0.51) $ (0.39) $ (1.33)
v3.19.3.a.u2
Subsequent Event (Details)
Mar. 05, 2020
USD ($)
item
Dec. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Aug. 17, 2015
USD ($)
Revolving Credit Facility        
Subsequent events        
Amount outstanding   $ 0    
First Lien Credit Facility        
Subsequent events        
Long-term debt   312,500,000 $ 312,500,000  
First Lien Credit Facility | Term Loan        
Subsequent events        
Maximum borrowing capacity       $ 435,000,000
Long-term debt   312,500,000 $ 312,500,000  
First Lien Credit Facility | Revolving Credit Facility        
Subsequent events        
Maximum borrowing capacity       $ 40,000,000
Amount outstanding $ 0 $ 0    
Senior Credit Facility | Revolving Credit Facility        
Subsequent events        
Maximum borrowing capacity 30,000,000      
Subsequent Events | Senior Credit Facility | Revolving Credit Facility        
Subsequent events        
Maximum borrowing capacity $ 30,000,000      
Number of first lien term loan lenders | item 2