UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8‑K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 6, 2019
CPI CARD GROUP INC.
(Exact name of registrant as specified in its charter)

 	 

 

 	
Delaware
(State or other jurisdiction
of incorporation)	001‑37584
(Commission
File Number)	26‑0344657
(I.R.S. Employer
Identification No.)	
 	 	 	
 	CPI Card Group Inc.
10026 West San Juan Way
Littleton, CO
(Address of principal executive offices)	80127
(Zip Code)	
 
(303) 973‑9311
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐   Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12)
☐   Pre-commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b))
☐   Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b‑2 of the Securities Exchange Act of 1934 (§240.12b‑2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☒

 

 

Item 2.02   Results of Operations and Financial Condition.*
On March 6, 2019, CPI Card Group Inc. (the “Company”) issued a press release announcing financial results for its fiscal quarter and full year ended December 31, 2018. A copy of the press release is attached hereto as Exhibit 99.1.

Item 7.01 Regulation FD Disclosure.*	 	
 
In connection with the issuance of the Earnings Release, the Company is holding a public conference call on March 6, 2019 during which Scott Scheirman, President and Chief Executive Officer, and John Lowe, Chief Financial Officer, will provide the presentation attached hereto as Exhibit 99.2.
 
Item 9.01   Financial Statements and Exhibits.
(d) Exhibits:

Exhibit Number	Exhibit Description	
99.1*	Press release issued March 6, 2019 announcing the fourth quarter and full year results	
99.2*	Presentation of the Company dated March 6, 2019	

*The information furnished under Item 2.02 and Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 	CPI CARD GROUP INC.	

Dated: March 6, 2019	By:	/s/ Sarah J. Kilgore	
 	Name:	Sarah J. Kilgore	
 	Title:	Chief Legal and Compliance Officer	

 

Exhibit 99.1
CPI Card Group Inc. Reports Fourth Quarter and Full Year 2018 Results
Date: March 6, 2019
Fourth Quarter Net Sales of $68.5 million, Up 19% Year-Over-Year
Fourth Quarter Continuing Operations - GAAP Net Loss of $7.2 Million, $5.4 Million on an Adjusted Basis
Fourth Quarter Adjusted EBITDA from Continuing Operations of $5.1 Million, A 53% Year-Over-Year Increase
Cash of $20.3 million, Available Revolver of $20.0 million, Available Liquidity of $40.3 million at Year End
 
Call scheduled for Wednesday, March 6, 2019 at 9:00 a.m. Eastern Time
Littleton, Colo. March 6, 2019 -- CPI Card Group Inc. (Nasdaq: PMTS; TSX: PMTS.TO) (“CPI Card Group” or the “Company”) today reported financial results for the fourth quarter and full year ended December 31, 2018. 
Scott Scheirman, President and Chief Executive Officer of CPI, stated, “Fourth quarter financial results reflect the continued progress we are making towards strengthening our business and fostering changes that we believe will help us to achieve long-term success. Our fourth quarter performance was highlighted by top-line growth of 19% year over year, marking our fourth consecutive quarter of year-over-year net sales growth.  During the quarter, we saw continued top line momentum across the business, particularly in our emerging products and solutions.”
Scheirman continued, “As we enter 2019, we remain committed to our strategy of deep customer focus, providing market-leading quality products and customer service, developing a market-competitive business model and continuous innovation. Through continued thoughtful, disciplined execution of these highly targeted initiatives, we believe we can achieve our vision of being the partner of choice for our customers by providing market-leading quality products and customer service with a market competitive business model.”
Financial results, including non-GAAP measures, discussed in this press release for all periods reflect continuing operations unless otherwise noted. The sale of CPI U.K., which had historically been reported as the U.K. Limited segment has been accounted for as discontinued operations, and comparative financial information has been restated in accordance with U.S. GAAP (“GAAP”) requirements.  All earnings per share amounts reflect the one-for-five reverse stock split, which occurred in December 2017.
Fourth Quarter and Full Year 2018 Consolidated Financial Highlights from Continuing Operations
Net sales were $68.5 million in the fourth quarter of 2018, an increase of 19.2% from the fourth quarter of 2017.  For the full year ended December 31, 2018, net sales were $255.8 million, an increase of 14.3% over the prior year.  Loss from operations was $0.4 million in the fourth quarter of

 

2018 compared with a loss from operations of $21.5 million in the fourth quarter of 2017.  As a reminder, the Company recorded a non-cash impairment charge of $19.1 million in the fourth quarter of 2017, of which $17.2 million related to the U.S. Debit and Credit segment, and the remaining $1.9 million related to the Other segment.  The Company generated income from operations of $4.6 million during the full year 2018 compared with a loss from operations of $19.3 million during the full year 2017. Net loss was $7.2 million, or $0.65 per diluted share, and $14.8 million, or $1.33 per diluted share, for the fourth quarter and full year 2018, respectively.  This compares with a net loss of $14.4 million, or $1.29 per diluted share, and $23.1 million, or $2.08 per diluted share, for the fourth quarter and full year 2017, respectively.  The Company’s net loss was impacted by a reduction in the effective tax rate for the year ended 2018 compared to the prior year, which lowered the income tax benefit by $12.2 million, due primarily to U.S. tax reform legislation.
Adjusted EBITDA for the fourth quarter of 2018 was $5.1 million, up 52.7% compared with $3.3 million in the prior year fourth quarter. For the full year 2018, adjusted EBITDA increased 16.6% to $27.1 million compared to the full year 2017.  These year-over-year improvements are primarily the result of net sales growth and lower costs resulting from cost optimization initiatives implemented throughout 2018.
Fourth Quarter and Full Year 2018 Segment Information from Continuing Operations
U.S. Debit and Credit:
Net sales increased 23.9% to $49.6 million in the fourth quarter of 2018 compared with the fourth quarter of 2017. The increase in U.S. Debit and Credit segment net sales was driven primarily by increased sales from our emerging products and solutions, including CPI Metals™, dual-interface EMV® cards, and Card@Once®.  Full year 2018 segment net sales were $178.6 million, an increase of 10.1% compared to 2017.  EMV card volumes, excluding metal and dual interface, were up 17% and 5% during the fourth quarter and full year 2018, respectively, compared with the fourth quarter and full year 2017, while average selling prices declined on a year over year basis. 
U.S. Prepaid Debit:
Net sales increased 6.0% to $17.1 million in the fourth quarter of 2018 compared with the fourth quarter of 2017, driven by additional sales volumes from our existing customer base.  Full year 2018 segment net sales were $69.2 million, an increase of 21.4% compared to 2017.
Balance Sheet, Liquidity, and Cash Flow from Continuing Operations
Cash provided by operating activities for the fourth quarter of 2018 was $8.9 million and capital expenditures totaled $0.6 million, yielding free cash flow of $8.3 million during the fourth quarter.  For the full year ended December 31, 2018, cash provided by operating activities was $7.0 million, capital expenditures totaled $5.6 million and free cash flow was $1.4 million.
At December 31, 2018, the Company had $20.3 million of cash and cash equivalents and a $40.0 million revolving credit facility, of which $20.0 million was available for borrowing.
Total debt principal outstanding, comprised of the Company’s First Lien Term Loan, was $312.5 million at December 31, 2018, unchanged from December 31, 2017. Net of debt issuance costs and discount, recorded debt was $305.8 million as of December 31, 2018. The Company’s First Lien Term Loan matures on August 17, 2022 and includes no financial covenants.
John Lowe, Chief Financial Officer, stated, “We continued to deliver solid top-line performance in the fourth quarter of 2018, which helped boost our fourth quarter adjusted EBITDA performance by more than 50% compared with the fourth quarter of last year. Our continued disciplined approach of

 

driving revenue growth and operational efficiency yielded positive free cash flow generation from continuing operations for the full year 2018.  We continue to believe we have adequate cash and liquidity to support our business plans.”
EMV® is a registered trademark or trademark of EMVCo LLC in the United States and other countries.
Non-GAAP Financial Measures
In addition to financial results reported in accordance with U.S. generally accepted accounting principles (GAAP), we have provided the following non-GAAP financial measures in this release, all reported on a continuing operations basis: Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) per Share, EBITDA, reconciliation of US Debit and Credit segment EBITDA excluding impairments, Adjusted EBITDA, and Free Cash Flow. These non-GAAP financial measures are utilized by management in comparing our operating performance on a consistent basis between fiscal periods. We believe that these financial measures are appropriate to enhance an overall understanding of our underlying operating performance trends compared to historical and prospective periods and our peers. Management also believes that these measures are useful to investors in their analysis of our results of operations and provide improved comparability between fiscal periods. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Our non-GAAP measures may be different from similarly titled measures of other companies. Investors are encouraged to review the reconciliation of these historical non-GAAP measures to their most directly comparable GAAP financial measures included in Exhibit E to this press release.
Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) per Share
Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) per Share are presented on a continuing operations basis and exclude the impact of impairments, amortization of intangible assets; litigation and related charges incurred in connection with certain patent and shareholder litigation; stock-based compensation expense; restructuring and other charges; and other non-operational, non-cash or non-recurring items, net of their income tax impact. In 2017, an income tax rate of 35% was used to calculate the related tax impact on adjustments noted above.  Beginning in the first quarter of 2018, a 21% tax rate is used to calculate Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) per Share. In conjunction with U.S. government comprehensive tax reform, there was a reduction of the U.S. federal tax rate from 35.0% to 21.0% effective in 2018.  We believe that Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) per Share are useful in assessing our financial performance by excluding items that are not indicative of our core operating performance or that may obscure trends useful in evaluating our results of operations. 
EBITDA
EBITDA represents earnings before interest, taxes, depreciation and amortization, all on a continuing operations basis. EBITDA is presented because it is an important supplemental measure of performance, and it is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is also presented and compared by analysts and investors in evaluating our ability to meet debt service obligations. Other companies in our industry may calculate EBITDA differently. EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net (loss) income or net (loss) income from continuing operations as indicators of operating performance or any other measures of performance derived in accordance with GAAP. Because EBITDA is calculated before recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a measure of discretionary cash available to invest in the growth of the business. Additionally, the Company provided a

 

reconciliation of US Debit and Credit segment EBITDA excluding impairments, for the comparable periods as presented within.  This is presented to reflect EBITDA without the effects of impairment charges, and the resulting EBITDA margin percentage, and EBITDA growth rate year over year.  This measurement is meaningful to show EBITDA without impairment charges to better reflect comparability between periods.  This EBITDA metric without impairment charges has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for, analysis of our results as reported under GAAP.
Adjusted EBITDA
Adjusted EBITDA is presented on a continuing operations basis and is defined as EBITDA adjusted for impairments, litigation and related charges incurred in connection with certain patent and shareholder litigation; stock-based compensation expense; restructuring and other charges; foreign currency gain or loss; and other items that are unusual in nature, infrequently occurring or not considered part of our core operations, as set forth in the reconciliation on Exhibit E. Adjusted EBITDA is also a defined term in our existing credit agreement, which generally conforms to the definition above, and impacts certain credit measures and compliance targets within the credit agreement. Adjusted EBITDA is intended to show our unleveraged, pre-tax operating results and therefore reflects our financial performance based on operational factors, excluding non-operational, non-cash or non-recurring losses or gains. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for, analysis of our results as reported under GAAP. For example, Adjusted EBITDA does not reflect: (a) our capital expenditures, future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expenses or the cash requirements necessary to service interest or principal payments on our debt; (d) tax payments that represent a reduction in cash available to us; (e) any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; (f) the impact of earnings or charges resulting from matters that we and the lenders under our credit agreement may not consider indicative of our ongoing operations; or (g) the impact of any discontinued operations. In particular, our definition of Adjusted EBITDA allows us to add back certain non-cash, non-operating or non-recurring charges that are deducted in calculating net (loss) income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results.
In addition, certain of these expenses can represent the reduction of cash that could be used for other purposes. Further, although not included in the calculation of Adjusted EBITDA, the measure may at times allow us to add estimated cost savings and operating synergies related to operational changes ranging from acquisitions to dispositions to restructurings and/or exclude one-time transition expenditures that we anticipate we will need to incur to realize cost savings before such savings have occurred. Further, management and various investors use the ratio of total debt less cash to Adjusted EBITDA, or "net debt leverage", as a measure of our financial strength and ability to incur incremental indebtedness when making key investment decisions and evaluating us against peers.   The metric “total debt less cash” includes borrowed long term debt and capital lease obligations, less cash.  Adjusted EBITDA margin percentage as shown in Exhibit E is computed as Adjusted EBITDA divided by total net sales.
Free Cash Flow
We define Free Cash Flow as cash flow from continuing operations less capital expenditures from continuing operations. We use this metric in analyzing our ability to service and repay our debt. However, this measure does not represent funds available for investment or other discretionary uses since it does not deduct cash used to service our debt, nor does it reflect the cash impacts of our discontinued operations.

 

About CPI Card Group Inc.
CPI Card Group is a leading provider in payment card production and related services, offering a single source for credit, debit and prepaid debit cards including EMV® chip and dual interface, personalization, instant issuance, fulfillment and digital payment services. With more than 20 years of experience in the payments market and as a trusted partner to financial institutions, CPI’s solid reputation of product consistency, quality and outstanding customer service supports our position as a leader in the market. Serving our customers from locations throughout the United States and Canada, we have a large network of high security facilities in North America, each of which is certified by one or more of the payment brands: Visa, Mastercard®, American Express, Discover and Interac in Canada. Learn more at www.cpicardgroup.com .
Conference Call and Webcast
CPI Card Group Inc. will hold a conference call on March 6, 2019 at 9:00 a.m. ET to review its fourth quarter and full year 2018 results. To participate in the Company's conference call via telephone or online:
Participant Toll-Free Dial-In Number: (800) 860-2442
Participant International Dial-In Number: (412) 858-4600
Webcast Link: https://services.choruscall.com/links/pmts190306.html
Participants are advised to login for the live webcast 10 minutes prior to the scheduled start time.
 
A replay of the conference call and webcast will be available until March 20, 2019 at:
 
Replay: (877) 344-7529 or (412) 317-0088;
Conference ID: 10127909
Webcast replay: http://investor.cpicardgroup.com
 
Forward-Looking Statements
Certain statements and information in this earnings release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “1933 Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “1934 Act”). The words “believe,” “estimate,” “project,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us, and other information currently available. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. We are making investors aware that such forward-looking statements, because they relate to future events, are by their very nature subject to many important factors that could cause actual results to differ materially from those contemplated. These risks and uncertainties include, but are not limited to: our substantial indebtedness, including inability to make debt service payments or refinance such indebtedness; the restrictive terms of our credit facility and covenants of future agreements governing indebtedness and the resulting restraints on our ability to pursue our business strategies; our limited ability to raise capital in the future; system security risks, data protection breaches and cyber-attacks and possible exposure to litigation and/or regulatory penalties under applicable data privacy and other laws for failure to prevent such incidents; interruptions in our operations, including our IT systems, or in the operations of the third parties that operate the data centers or computing infrastructure on which we rely;  our failure to maintain our listing on the NASDAQ Capital Market; our inability to adequately protect our trade secrets and

 

intellectual property rights from misappropriation or infringement, claims that our technology is infringing on the intellectual property of others, and risks related to open source software; defects in our software; problems in production quality and process; our failure to retain our existing customers or identify and attract new customers; a loss of market share or a decline in profitability resulting from competition; our inability to recruit, retain and develop qualified personnel, including key personnel; our inability to sell, exit, reconfigure or consolidate businesses or facilities that no longer meet with our strategy; our inability to develop, introduce and commercialize new products; the effect of legal and regulatory proceedings; developing technologies that make our existing technology solutions and products less relevant or a failure to introduce new products and services in a timely manner; quarterly variation in our operating results; infringement of our intellectual property rights, or claims that our technology is infringing on third-party intellectual property; our inability to realize the full value of our long-lived assets; our failure to operate our business in accordance with the PCI Security Standards Council (“PCI”) security standards or other industry standards such as Payment Card Brand certification standards; costs relating to the obligatory collection of sales tax and claims for uncollected sales tax in states that impose sales tax collection requirements on out-of-state companies; disruption or delays in our manufacturing operations or supply chain; a decline in U.S. and global market and economic conditions and resulting decreases in consumer and business spending; costs relating to product defects and any related product liability and/or warranty claims; maintenance and further imposition of tariffs and/or trade restrictions on goods imported into the United States; our dependence on licensing arrangements; risks associated with international operations; non-compliance with, and changes in, laws in the United States and in foreign jurisdictions in which we operate and sell our products; risks associated with the controlling stockholders’ ownership of our stock; and other risks that are described in Part I, Item 1A – Risk Factors of our Form 10-K and our other reports filed from time to time with the Securities and Exchange Commission (the “SEC”).  
 
We caution and advise readers not to place undue reliance on forward-looking statements, which speak only as of the date hereof. These statements are based on assumptions that may not be realized and involve risks and uncertainties that could cause actual results to differ materially from the expectations and beliefs contained herein. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
 
####
For more information:
CPI encourages investors to use its investor relations website as a way of easily finding information about the company. CPI promptly makes available on this website, free of charge, the reports that the company files or furnishes with the SEC, corporate governance information and press releases. CPI uses its investor relations site (http://investor.cpicardgroup.com) as a means of disclosing material information and for complying with its disclosure obligations under Regulation FD.
CPI Card Group Inc. Investor Relations:
Jennifer Almquist
(877) 369-9016
InvestorRelations@cpicardgroup.com
 
CPI Card Group Inc. Media Relations:
Media@cpicardgroup.com
 
CPI Card Group Inc.   Earnings Release Supplemental Financial Information
 	 	
Exhibit A	Condensed Consolidated Statements of Operations and Comprehensive Loss - Unaudited for the three months and full years ended December 31, 2018 and 2017	

 

Exhibit B	Condensed Consolidated Balance Sheets – Unaudited as of December 31, 2018 and 2017	
 	 	
Exhibit C	Condensed Consolidated Statements of Cash Flows - Unaudited for the years ended December 31, 2018 and 2017	
 	 	
Exhibit D	Segment Summary Information – Unaudited for the three months and full years ended December 31, 2018 and 2017	
 	 	
Exhibit E	Supplemental GAAP to Non-GAAP Reconciliations - Unaudited for the three months and full years ended December 31, 2018 and 2017	

 

 

 	 	 	 	 	 	 	 	 	 	EXHIBIT A	 	
CPI Card Group Inc. and Subsidiaries	 	
Condensed Consolidated Statements of Operations and Comprehensive Loss	 	
(Dollars in Thousands, Except Per Share Amounts)	 	
(Unaudited)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended December 31, 	 	Year Ended December 31, 	 	
 	    	2018	    	2017	 	2018	    	2017	 	
Net sales:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Products	 	$	34,158	 	$	24,815	 	$	125,069	 	$	104,459	 	
Services	 	 	34,358	 	 	32,674	 	 	130,745	 	 	119,285	 	
Total net sales	 	 	68,516	 	 	57,489	 	 	255,814	 	 	223,744	 	
Cost of sales:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Products (exclusive of depreciation and amortization shown below)	 	 	23,034	 	 	16,803	 	 	82,110	 	 	70,527	 	
Services (exclusive of depreciation and amortization shown below)	 	 	21,706	 	 	20,605	 	 	82,697	 	 	74,315	 	
Depreciation and amortization	 	 	2,797	 	 	2,634	 	 	12,417	 	 	10,697	 	
Total cost of sales	 	 	47,537	 	 	40,042	 	 	177,224	 	 	155,539	 	
Gross profit	 	 	20,979	 	 	17,447	 	 	78,590	 	 	68,205	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative (exclusive of depreciation and amortization shown below)	 	 	19,895	 	 	18,405	 	 	68,014	 	 	62,206	 	
Impairments	 	 	 —	 	 	19,074	 	 	 —	 	 	19,074	 	
Depreciation and amortization	 	 	1,475	 	 	1,446	 	 	5,988	 	 	6,225	 	
Total operating expenses	 	 	21,370	 	 	38,925	 	 	74,002	 	 	87,505	 	
Income (loss) from operations	 	 	(391)	 	 	(21,478)	 	 	4,588	 	 	(19,300)	 	
Other expense, net:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest, net	 	 	(6,188)	 	 	(5,318)	 	 	(23,431)	 	 	(20,850)	 	
Foreign currency (loss) gain	 	 	(63)	 	 	(3)	 	 	(311)	 	 	517	 	
Other income, net	 	 	 1	 	 	 1	 	 	16	 	 	12	 	
Total other expense, net	 	 	(6,250)	 	 	(5,320)	 	 	(23,726)	 	 	(20,321)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before income taxes	 	 	(6,641)	 	 	(26,798)	 	 	(19,138)	 	 	(39,621)	 	
Income tax benefit (expense)	 	 	(594)	 	 	12,382	 	 	4,339	 	 	16,536	 	
Net loss from continuing operations	 	 	(7,235)	 	 	(14,416)	 	 	(14,799)	 	 	(23,085)	 	
Discontinued operations:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income from discontinued operation, net of taxes	 	 	(112)	 	 	(191)	 	 	(22,663)	 	 	1,075	 	
Net loss	 	$	(7,347)	 	$	(14,607)	 	$	(37,462)	 	$	(22,010)	 	

Basic and Diluted Loss per Share:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	(0.65)	 	$	(1.29)	 	$	(1.33)	 	$	(2.08)	 	
Discontinued operations	 	 	(0.01)	 	 	(0.02)	 	 	(2.03)	 	 	0.10	 	
 	 	$	(0.66)	 	$	(1.31)	 	$	(3.36)	 	$	(1.98)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted-average shares outstanding:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and dilutive	 	 	11,160,377	 	 	11,134,633	 	 	11,149,554	 	 	11,117,454	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Dividends declared per common share	 	$	 —	 	$	 —	 	$	 —	 	$	0.45	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Comprehensive loss	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(7,347)	 	$	(14,607)	 	$	(37,462)	 	$	(22,010)	 	
Reclassification adjustment from discontinued operations	 	 	 —	 	 	 —	 	 	3,983	 	 	 —	 	
Currency translation adjustment	 	 	(118)	 	 	
56	 	 	(205)	 	 	1,277	 	
Total comprehensive loss	 	$	(7,465)	 	$	(14,551)	 	$	(33,684)	 	$	(20,733)	 	

 
 
Impair
 	 	 	 	 	 	 	 	
 	 	 	 	 	EXHIBIT B	 	
CPI Card Group Inc. and Subsidiaries	 	
Condensed Consolidated Balance Sheets	 	
(Dollars in Thousands, Except Share and Per Share Amounts)	 	
(Unaudited)	

 	 	December 31, 	 	December 31, 	 	
 	    	2018	    	2017	 	
 	 	 	 	 	 	 	 	
Assets	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	20,291	 	$	23,205	 	
Accounts receivable, net of allowances of $211 and $48, respectively	 	 	43,794	 	 	32,531	 	
Inventories	 	 	9,827	 	 	13,799	 	
Prepaid expenses and other current assets	 	 	4,997	 	 	3,681	 	
Income taxes receivable	 	 	5,564	 	 	8,208	 	
Assets of discontinued operation	 	 	 —	 	 	20,651	 	
Total current assets	 	 	84,473	 	 	102,075	 	
Plant, equipment and leasehold improvements, net	 	 	39,110	 	 	44,436	 	
Intangible assets, net	 	 	35,437	 	 	40,093	 	
Goodwill	 	 	47,150	 	 	47,150	 	
Other assets	 	 	1,034	 	 	251	 	
Total assets	 	$	207,204	 	$	234,005	 	
 	 	 	 	 	 	 	 	
Liabilities and stockholders’ deficit	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	
Accounts payable	 	$	16,511	 	$	13,239	 	
Accrued expenses	 	 	23,853	 	 	12,789	 	
Deferred revenue and customer deposits	 	 	912	 	 	3,342	 	
Liabilities of discontinued operation	 	 	 —	 	 	5,669	 	
Total current liabilities	 	 	41,276	 	 	35,039	 	
Long-term debt	 	 	305,818	 	 	303,869	 	
Deferred income taxes	 	 	5,749	 	 	12,168	 	
Other long-term liabilities	 	 	3,937	 	 	2,503	 	
Total liabilities	 	 	356,780	 	 	353,579	 	
 	 	 	 	 	 	 	 	
Commitments and contingencies	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Stockholders’ deficit:	 	 	 	 	 	 	 	
Common Stock; $0.001 par value—100,000,000 shares authorized; 11,160,377 and 11,134,714 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively	 	 	11	 	 	11	 	
Capital deficiency	 	 	(112,223)	 	 	(113,081)	 	
Accumulated loss	 	 	(36,004)	 	 	(1,366)	 	
Accumulated other comprehensive loss	 	 	(1,360)	 	 	(5,138)	 	
Total stockholders’ deficit	 	 	(149,576)	 	 	(119,574)	 	
Total liabilities and stockholders’ deficit	 	$	207,204	 	$	234,005	 	

 
 	 	 	 	 	 	 	 	
 	 	 	 	 	 	EXHIBIT C	 	
CPI Card Group Inc. and Subsidiaries	
Condensed Consolidated Statements of Cash Flows	
(Dollars in Thousands)	
(Unaudited)	
 	 	 	 	 	 	 	 	
 	 	Year Ended December 31, 	 	
 	    	2018	    	2017	 	
Operating activities	 	 	 	 	 	 	 	
Net loss	 	$	(37,462)	 	$	(22,010)	 	
Adjustments to reconcile net loss  to net cash provided by operating activities:	 	 	 	 	 	 	 	
Loss (income) from discontinued operations	 	 	22,663	 	 	(1,075)	 	
Impairments	 	 	 —	 	 	19,074	 	
Depreciation and amortization expense	 	 	18,405	 	 	16,922	 	
Stock-based compensation expense	 	 	961	 	 	1,989	 	
Amortization of debt issuance costs and debt discount	 	 	1,949	 	 	1,947	 	
Deferred income taxes	 	 	(6,897)	 	 	(9,167)	 	
Other, net	 	 	302	 	 	(165)	 	
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	
Accounts receivable	 	 	(5,523)	 	 	(6,396)	 	
Inventories	 	 	(1,998)	 	 	2,826	 	
Prepaid expenses and other assets	 	 	(2,108)	 	 	619	 	
Income taxes	 	 	2,644	 	 	(8,581)	 	
Accounts payable	 	 	2,411	 	 	5,655	 	
Accrued expenses	 	 	10,436	 	 	(456)	 	
Deferred revenue and customer deposits	 	 	632	 	 	599	 	
Other liabilities	 	 	655	 	 	1,671	 	
Cash provided by operating activities - continuing operations	 	 	7,070	 	 	3,452	 	
Cash used in operating activities - discontinued operations	 	 	(3,550)	 	 	(1,025)	 	
Investing activities	 	 	 	 	 	 	 	
Acquisitions of plant, equipment and leasehold improvements	 	 	(5,634)	 	 	(7,263)	 	
Cash used in investing activities - continuing operations	 	 	(5,634)	 	 	(7,263)	 	
Cash used in investing activities - discontinued operations	 	 	(220)	 	 	(1,527)	 	
Financing activities	 	 	 	 	 	 	 	
Dividends paid on common stock	 	 	 —	 	 	(7,540)	 	
Payments on capital leases	 	 	(519)	 	 	 —	 	
Taxes withheld and paid on stock-based compensation awards	 	 	 —	 	 	(341)	 	
Cash used in financing activities	 	 	(519)	 	 	(7,881)	 	
Effect of exchange rates on cash	 	 	
(61)	 	 	
494	 	
Net decrease in cash and cash equivalents	 	 	(2,914)	 	 	(13,750)	 	
Cash and cash equivalents, beginning of period	 	 	23,205	 	 	36,955	 	
Cash and cash equivalents, end of period	 	$	20,291	 	$	23,205	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	EXHIBIT D	 	
CPI Card Group Inc. and Subsidiaries	
Segment Summary Information	
For the Three Months and Year Ended December 31, 2018 and 2017	
(Dollars in Thousands)	
(Unaudited)	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales  (1) and (2)  	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended December 31, 	 	 	
 	    	2018	    	2017	    	$ Change	    	% Change	 	 	
Net sales by segment:	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S Debit and Credit	 	$	49,605	 	$	40,042	 	$	9,563	 	23.9	%	 	
U.S. Prepaid Debit	 	 	17,071	 	 	16,104	 	 	967	 	6.0	%	 	
Other	 	 	2,292	 	 	2,658	 	 	(366)	 	(13.8)	%	 	
Eliminations	 	 	(452)	 	 	(1,315)	 	 	863	 	*	%	 	
Total	 	$	68,516	 	$	57,489	 	$	11,027	 	19.2	%	 	
* Calculation not meaningful
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Year Ended December 31, 	 	
 	    	2018	    	2017	    	$ Change	    	% Change	 	
Net sales by segment:	 	 	 	 	 	 	 	 	 	 	 	 	
U.S Debit and Credit	 	$	178,597	 	$	162,216	 	$	16,381	 	10.1	%	
U.S. Prepaid Debit	 	 	69,199	 	 	57,005	 	 	12,194	 	21.4	%	
Other	 	 	9,891	 	 	11,049	 	 	(1,158)	 	(10.5)	%	
Eliminations	 	 	(1,873)	 	 	(6,526)	 	 	4,653	 	*	%	
Total	 	$	255,814	 	$	223,744	 	$	32,070	 	14.3	%	
* Calculation not meaningful

Gross Profit (1) and (2)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended December 31, 	 	
 	    	2018	    	 	% of Net
Sales	    	2017	    	% of Net
Sales	    	$ Change	    	% Change	    	
Gross profit by segment:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S Debit and Credit	 	$	14,145	 	 	28.5	%   	$	10,944	 	27.2	%   	$	3,201	 	29.2	%	
U.S. Prepaid Debit	 	 	6,311	 	 	37.0	%   	 	5,941	 	36.9	%   	 	370	 	6.2	%	
Other	 	 	523	 	 	*	%   	 	562	 	*	%   	 	(39)	 	(6.9)	%	
Total	 	$	20,979	 	 	30.6	%   	$	17,447	 	30.3	%   	$	3,532	 	20.2	%	
* Calculation not meaningful

 	 	Year Ended December 31, 	 	
 	    	2018	    	 	% of Net
Sales	    	2017	    	% of Net
Sales	    	$ Change	    	% Change	    	
Gross profit by segment:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S Debit and Credit	 	$	50,036	 	 	28.0	%   	$	45,179	 	27.8	%   	$	4,857	 	10.8	%	
U.S. Prepaid Debit	 	 	26,422	 	 	38.2	%   	 	20,358	 	35.7	%   	 	6,064	 	29.8	%	
Other	 	 	2,132	 	 	*	%   	 	2,668	 	*	%   	 	(536)	 	(20.1)	%	
Total	 	$	78,590	 	 	30.7	%   	$	68,205	 	30.5	%   	$	10,385	 	15.2	%	
* Calculation not meaningful

Income (loss) from Operations (1) and (2)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	Three Months Ended December 31, 	 	
 	    	 	2018	    	 	% of Net
Sales	    	 	2017	    	% of Net
Sales	    	 	$ Change	    	% Change	    	
Income (loss) from Operations by segment:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S Debit and Credit	 	$	6,764	 	 	13.6	%   	$	(12,645)	 	(31.6)	%   	$	19,409	 	*	%	
U.S. Prepaid Debit	 	 	4,996	 	 	29.3	%   	 	5,084	 	31.6	%   	 	(88)	 	(1.7)	%	
Other	 	 	(12,151)	 	 	*	%   	 	(13,917)	 	*	%   	 	1,766	 	12.7	%	
Total	 	$	(391)	 	 	(0.6)	%   	$	(21,478)	 	(37.4)	%   	$	21,087	 	98.2	%	
* Calculation not meaningful
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	Year Ended December 31, 	 	
 	    	 	2018	    	 	% of Net
Sales	    	 	2017	    	% of Net
Sales	    	 	$ Change	    	% Change	    	
Income (loss) from Operations by segment:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S Debit and Credit	 	$	22,414	 	 	12.6	%   	$	2,121	 	1.3	%   	$	20,293	 	956.8	%	
U.S. Prepaid Debit	 	 	21,928	 	 	31.7	%   	 	16,679	 	29.3	%   	 	5,249	 	31.5	%	
Other	 	 	(39,754)	 	 	*	%   	 	(38,100)	 	*	%   	 	(1,654)	 	(4.3)	%	
Total	 	$	4,588	 	 	1.8	%   	$	(19,300)	 	(8.6)	%   	$	23,888	 	*	%	
* Calculation not meaningful

EBITDA (1), (2) and (3)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended December 31, 	 	
 	    	2018	    	 	% of Net
Sales	    	2017	    	% of Net
Sales	    	$ Change	    	% Change	    	
EBITDA by segment	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S Debit and Credit	 	$	9,425	 	 	19.0	%   	$	(10,255)	 	(25.6)	%   	$	19,680	 	*	%	
U.S. Prepaid Debit	 	 	5,445	 	 	31.9	%   	 	5,592	 	34.7	%   	 	(147)	 	(2.6)	%	
Other	 	 	(11,051)	 	 	*	%   	 	(12,737)	 	*	%   	 	1,686	 	13.2	%   	
Total	 	$	3,819	 	 	5.6	%   	$	(17,400)	 	(30.3)	%   	$	21,219	 	121.9	%	
* Calculation not meaningful	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

 	 	Year Ended December 31, 	 	
 	    	2018	    	 	% of Net
Sales	    	2017	    	% of Net
Sales	    	$ Change	    	% Change	    	
EBITDA by segment  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S Debit and Credit	 	$	34,213	 	 	19.2	%   	$	11,618	 	7.2	%   	$	22,595	 	194.5	%	
U.S. Prepaid Debit	 	 	23,782	 	 	34.4	%   	 	18,847	 	33.1	%   	 	4,935	 	26.2	%	
Other	 	 	(35,297)	 	 	*	%   	 	(32,314)	 	*	%   	 	(2,983)	 	(9.2)	%	
Total	 	$	22,698	 	 	8.9	%   	$	(1,849)	 	(0.8)	%   	$	24,547	 	*	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Calculation not meaningful	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

Note the tables in this exhibit are presented on a continuing operations basis .
(1) On August 3, 2018, we completed the sale of the U.K. Limited segment. During the second quarter of 2018, we met the criteria to report the U.K. Limited segment as a discontinued operation. The financial position, results of operations and cash flows have been restated for all periods to conform with discontinued operations presentation.
(2)  During the first quarter of 2018, we reorganized our United States business operations and realigned our United States reporting segments to correspond with the manner with which our chief decision maker evaluates operating performance and makes decisions as to the allocation of resources. As a result of this realignment, our CPI on Demand business operations were moved from U.S. Prepaid Debit into the U.S. Debit and Credit reporting segment, consistent with the other related personalization operations. Segment information for previous periods has been restated to conform with this realignment and current period presentation. The restatement of 2017 segment information was not material.
(3)  EBITDA is the primary measure used by management to evaluate segment operating performance. The principal difference between Income from operations and EBITDA is that EBITDA is adjusted to exclude Depreciation and amortization expense of $2,658 and $2,390 in U.S. Debit and Credit; $454 and $507 in U.S. Prepaid Debit and $1,160 and $1,183 in Other for the three months ended December 31, 2018 and 2017, respectively, and $11,801 and $9,497 in U.S. Debit and Credit; $1,859 and $2,168 in U.S. Prepaid Debit and $4,745 and $5,257 in Other for the years ended December 31, 2018 and 2017, respectively.

 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	EXHIBIT E	 	
CPI Card Group Inc. and Subsidiaries	
Supplemental GAAP to Non-GAAP Reconciliation	
(Dollars in Thousands, Except Shares and Per Share Amounts)	
(Unaudited)	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended December 31, 	 	Year Ended December 31, 	 	
 	    	2018	    	2017	    	2018	    	2017	 	
EBITDA and Adjusted EBITDA:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss from continuing operations	 	$	(7,235)	 	$	(14,416)	 	$	(14,799)	 	$	(23,085)	 	
Interest expense, net	 	 	6,188	 	 	5,318	 	 	23,431	 	 	20,850	 	
Income tax (benefit) expense	 	 	594	 	 	(12,382)	 	 	(4,339)	 	 	(16,536)	 	
Depreciation and amortization	 	 	4,272	 	 	4,080	 	 	18,405	 	 	16,922	 	
EBITDA	 	$	3,819	 	$	(17,400)	 	$	22,698	 	$	(1,849)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjustments to EBITDA	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impairments (1)	 	 	 —	 	 	19,074	 	 	 —	 	 	19,074	 	
Litigation and related charges (2)	 	 	 3	 	 	1,015	 	 	1,042	 	 	4,514	 	
Stock-based compensation expense	 	 	219	 	 	622	 	 	961	 	 	1,989	 	
Restructuring and other charges (3)	 	 	955	 	 	 —	 	 	2,051	 	 	 —	 	
Foreign currency loss (gain)	 	 	63	 	 	 3	 	 	311	 	 	(517)	 	
Subtotal of adjustments to EBITDA	 	 	1,240	 	 	20,714	 	 	4,365	 	 	25,060	 	
Adjusted EBITDA	 	$	5,059	 	$	3,314	 	$	27,063	 	$	23,211	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA Margin (% of Net Sales)	 	 	
7.4%	 	 	
5.8%	 	 	
10.6%	 	 	
10.4%	 	
% increase period over period	 	 	
52.7%	 	 	 —	 	 	
16.6%	 	 	 —	 	

 	 	 	Three Months Ended December 31, 	 	 	Year Ended December 31, 	 	
 	 	2018	    	2017	 	2018	    	2017	 	
Adjusted net loss from continuing operations and loss per share - continuing operations:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss from continuing operations	 	$	(7,235)	 	$	(14,416)	 	$	(14,799)	 	$	(23,085)	 	
Impairments (1)	 	 	 —	 	 	19,074	 	 	 —	 	 	19,074	 	
Amortization of intangible assets	 	 	1,164	 	 	1,140	 	 	4,655	 	 	4,655	 	
Litigation and related charges (2)	 	 	 3	 	 	1,015	 	 	1,042	 	 	4,514	 	
Stock-based compensation expense	 	 	219	 	 	622	 	 	961	 	 	1,989	 	
Restructuring and other charges (3)	 	 	955	 	 	 —	 	 	2,051	 	 	 —	 	
Tax effect of above items	 	 	(492)	 	 	(7,648)	 	 	(1,829)	 	 	(10,581)	 	
Adjusted net loss from continuing operations	 	$	(5,386)	 	$	(213)	 	$	(7,919)	 	$	(3,434)	 	

 	 	Three Months Ended December 31, 	 	Year Ended December 31, 	 	
 	  	2018	  	2017	  	2018	  	2017	 	
Weighted-average number of shares outstanding:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	 	11,160,377	 	 	11,134,633	 	 	11,149,554	 	 	11,117,454	 	
Effect of dilutive equity awards	 	 	 —	 	 	 —	 	 	 —	 	 	 —	 	
Weighted-average diluted shares outstanding	 	 	11,160,377	 	 	11,134,633	 	 	11,149,554	 	 	11,117,454	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended December 31, 	 	Year Ended December 31, 	 	
  	  	2018	  	2017	  	2018	  	2017	 	
Reconciliation of loss per share - continuing operations (GAAP) to adjusted diluted loss per share - continuing operations:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted (loss) per share (GAAP) - continuing operations	 	$	
(0.65)	 	$	
(1.29)	 	$	
(1.33)	 	$	
(2.08)	 	
Impact of net (loss) income adjustments	 	 	
0.17	 	 	
1.27	 	 	
0.62	 	 	
1.77	 	
Adjusted diluted loss per share - continuing operations	 	$	
(0.48)	 	$	
(0.02)	 	$	
(0.71)	 	$	
(0.31)	 	

 	 	Three Months Ended December 31, 	 	Year Ended December 31, 	 	
 	 	2018	 	2017	 	2018	 	2017	 	
Reconciliation of cash provided by operating activities - continuing operations (GAAP) to free cash flow:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash provided by operating activities - continuing operations	 	$	8,914	 	$	7,546	 	$	7,070	 	$	3,452	 	
Acquisitions of plant, equipment and leasehold improvements	 	 	(606)	 	 	(974)	 	 	(5,634)	 	 	(7,263)	 	
Free cash flow - continuing operations	 	$	8,308	 	$	6,572	 	$	1,436	 	$	(3,811)	 	

 	 	Three Months Ended December 31, 	 	Year Ended December 31, 	 	
 	 	2018	 	2017	 	2018	 	2017	 	
Reconciliation of US Debit and Credit Segment EBITDA excluding impairments	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA	 	$	9,425	 	$	(10,255)	 	$	34,213	 	$	11,618	 	
Impairment (1)	 	 	 —	 	 	17,181	 	 	 —	 	 	17,181	 	
US Debit and Credit Segment EBITDA excluding goodwill impairment	 	$	9,425	 	$	 6,926	 	$	34,213	 	$	28,799	 	
EBITDA Margin (% of Net Sales)	 	 	
19.0%	 	 	
17.3%	 	 	
19.2%	 	 	
17.8%	 	
% increase period over period	 	 	
36.1%	 	 	 —	 	 	
18.8%	 	 	 —	 	

Note that tables in this exhibit are presented on a continuing operations basis.
	(1)		Impairment charges of goodwill and intangibles in 2017 of $19.1 million includes $17.2 million related to U.S. Debit and Credit and $1.9 million related to Other.	
	(2)		Represents net legal costs incurred with certain patent and shareholder litigation.	
	(3)		Represents primarily employee and lease termination costs incurred in connection with the decision to consolidate three personalization operations in the United States to two facilities, and employee termination costs incurred in the fourth quarter of 2018 in connection with the sale of our Canadian operations .	

Exhibit 99.2
	Copyright 2019 CPI Card Group Fourth Quarter and Full Year 2018 Earnings Conference Call March 6, 2019	

	Copyright 2019 CPI Card Group Safe Harbor Forward-Looking Statements: Certain statements and information in this presentation may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “1933 Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “1934 Act”). The words “believe,” “estimate,” “project,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us, and other information currently available. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. We are making investors aware that such forward-looking statements, because they relate to future events, are by their very nature subject to many important factors that could cause actual results to differ materially from those contemplated. These risks and uncertainties include, but are not limited to: our substantial indebtedness, including the inability to make debt service payments or refinance such indebtedness; the restrictive terms of our credit facility and covenants of future agreements governing indebtedness and the resulting restraints on our ability to pursue our business strategies; our limited ability to raise capital in the future; system security risks, data protection breaches and cyber-attacks and possible exposure to litigation and/or regulatory penalties under applicable data privacy and other laws for failure to prevent such incidents; interruptions in our operations, including our IT systems, or in the operations of the third parties that operate the data centers or computing infrastructure on which we rely; our failure to maintain our listing on the NASDAQ Capital Market; our inability to adequately protect our trade secrets and intellectual property rights from misappropriation or infringement, claims that our technology is infringing on the intellectual property of others, and risks related to open source software; defects in our software; problems in production quality and process; our failure to retain our existing customers or identify and attract new customers; a loss of market share or a decline in profitability resulting from competition; our inability to recruit, retain and develop qualified personnel, including key personnel; our inability to sell, exit, reconfigure or consolidate businesses or facilities that no longer meet with our strategy; our inability to develop, introduce and commercialize new products; the effect of legal and regulatory proceedings; developing technologies that make our existing technology solutions and products less relevant or a failure to introduce new products and services in a timely manner; quarterly variation in our operating results; infringement of our intellectual property rights, or claims that our technology is infringing on third-party intellectual property; our inability to realize the full value of our long-lived assets; our failure to operate our business in accordance with the PCI Security Standards Council (“PCI”) security standards or other industry standards such as Payment Card Brand certification standards; costs relating to the obligatory collection of sales tax and claims for uncollected sales tax in states that impose sales tax collection requirements on out-of-state companies; disruption or delays in our manufacturing operations or supply chain; a decline in U.S. and global market and economic conditions and resulting decreases in consumer and business spending; costs relating to product defects and any related product liability and/or warranty claims; maintenance and further imposition of tariffs and/or trade restrictions on goods imported into the United States; our dependence on licensing arrangements; risks associated with international operations; non-compliance with, and changes in, laws in the United States and in foreign jurisdictions in which we operate and sell our products; risks associated with the controlling stockholders’ ownership of our stock; and other risks that are described in Part I, Item 1A – Risk Factors of our Form 10-K and our other reports filed from time to time with the Securities and Exchange Commission (the “SEC”). Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. Reference is made to a more complete discussion of forward-looking statements and applicable risks contained under the captions “Cautionary Statement Regarding Forward-Looking Information” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 13, 2018 and in our forthcoming Annual Report on Form 10-K for the year ended December 31, 2018. CPI Card Group Inc. undertakes no obligation to update or revise any of its forward-looking statements, whether as a result of new information, future events or otherwise.	

	Copyright 2019 CPI Card Group Business Summary Scott Scheirman President and CEO	

	Copyright 2019 CPI Card Group 4 2018 Highlights * Financial results included in this presentation for all periods reflect continuing operations. ** See Appendix for definitions of our Non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures. Fourth Quarter and Full Year 2018 Highlights from Continuing Operations* • Net sales increased 19% and 14% year-over-year for the fourth quarter and full year 2018, respectively • GAAP Net loss from continuing operations was $7.2 million and $14.8 million for the fourth quarter and full year 2018, respectively, compared with $14.4 million and $23.1 million for the fourth quarter and full year 2017, respectively • Adjusted EBITDA** increased 53% and 17% year-over-year for the fourth quarter and full year 2018, respectively • Solid execution against plan	

	Copyright 2019 CPI Card Group 2018 Highlights (Continued) 5 • Deep customer focus strengthened existing relationships, drove new business • Believe we gained or retained market share across our U.S. businesses* • Market leading quality and customer service yielded industry awards and new business with both existing and new customers • Making doing business with CPI easier, robust innovation culture, differentiated solutions • Market-competitive business model supported by 2018 strategic changes • Realigned U.S. businesses, optimized footprint, executed efficiency initiatives • Innovation opened new doors • Customer collaboration, industry awards, expansion in new verticals 2018 was a Transformational Year * Source: Smart Payment Association (SPA), ABI Research, Inc., AITE Group, internal analyses	

	Copyright 2019 CPI Card Group 6 Strategic Priorities Deep Customer Focus Market-Leading Quality Products & Customer Service Market- Competitive Business Model Continuous Innovation	

	Copyright 2019 CPI Card Group 2019 Strategy: Growth Through Targeted Initiatives 7 Four Strategic Priorities to Foster Growth and Strengthen Our Platform Deep Customer Focus • Strengthen and deepen customer relationships • Deliver value and help our customers thrive Market-Leading Quality Products and Customer Service • Commitment to service and excellence, continually raising the bar on quality • Pursuing initiatives to ensure exceptional service, increased ease of doing business with CPI Market-Competitive Business Model • Driving efficiency and productivity throughout our business • Process improvements, operational automation, technology and equipment advancement Continuous Innovation • Partner with customers to enhance brands, achieve “top of wallet” status • Offer products and solutions to support customers’ initiatives to differentiate	

	Copyright 2019 CPI Card Group Summary 8 • We remain committed to the vision of being the partner of choice by providing market-leading quality products and customer service with a market competitive business model • We made solid strides getting “fit for growth” in 2018 • We believe we have the right strategies to serve customers well, drive top line performance	

	Copyright 2019 CPI Card Group Financial Summary John Lowe Chief Financial Officer	

	Copyright 2019 CPI Card Group 10 * Financial results included in this presentation for all periods reflect continuing operations. ** See Appendix for definitions of our Non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures. • Fourth quarter 2018 • Net sales of $68.5 million, up 19% year over year • Net loss of $7.2 million • Adjusted EBITDA** of $5.1 million, up 53% year over year • Full year 2018 • Net sales of $255.8 million, up 14% year over year • Net loss of $14.8 million • Adjusted EBITDA** of $27.1 million, up 17% year over year Financial Results Fourth Quarter and Full Year 2018*	

	Copyright 2019 CPI Card Group 11 * Financial results included in this presentation for all periods reflect continuing operations. ** See Appendix for definitions of our Non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures. • Fourth quarter 2018 • Net sales of $49.6 million, up 24% year over year • Income from operations of $6.8 million • EBITDA** of $9.4 million, up 36% year over year, excluding Q4 2017 impairments** • Full year 2018 • Net sales of $178.6 million, up 10% year over year • Income from operations of $22.4 million • EBITDA** of $34.2 million, up 19% year over year, excluding Q4 2017 impairments** Financial Results Fourth Quarter and Full Year 2018 U.S. Debit and Credit Segment Review*	

	Copyright 2019 CPI Card Group 12 * Financial results included in this presentation for all periods reflect continuing operations. ** See Appendix for definitions of our Non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures. • Fourth quarter 2018 • Net sales of $17.1 million, up 6% year over year • Income from operations of $5.0 million • EBITDA** of $5.4 million, down 3% year over year • Full year 2018 • Net sales of $69.2 million, up 21% year over year • Income from operations of $21.9 million • EBITDA** of $23.8 million, up 26% year over year Financial Results Fourth Quarter and Full Year 2018 U.S. Prepaid Debit Segment Review*	

	Copyright 2019 CPI Card Group Financial Results 13 Operating and Free Cash Flow * See Appendix for definitions of our Non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures. ** Note numbers may not foot due to rounding. $6.6 $8.3 -$3.8 $1.4 Q4 2017 Q4 2018 FY 2017 FY 2018 Free Cash Flow* **	

	Copyright 2019 CPI Card Group Financial Results 14 Debt and Liquidity • Revolver Borrowing Availability of $20 million • Term Loan matures August 2022; Revolver matures August 2020 * See Appendix for definitions of our Non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures. ** Equal to cash and cash equivalents at the end of the period plus $20 million available under CPI’s revolving credit facility. Available borrowings under CPI’s revolving credit facility limited to $20 million above 7.0x Net Debt Leverage Ratio divided by LTM Adjusted EBITDA – continuing operations.	

	Copyright 2019 CPI Card Group The Market 15 U.S. Market Conditions* • We expect U.S. industry card manufacturing volume to grow in 2019, driven by dual-interface conversions and EMV® reissuance • We expect dual-interface to grow gradually as a proportion of the U.S. market • We expect small and medium issuer card personalization and fulfillment to be relatively flat as these issuers tend to lag the larger market * Source: Smart Payment Association (SPA), Payment Networks Earnings Releases, internal analyses EMV® is a registered trademark or trademark of EMVCo LLC in the United States and other countries.	

	Copyright 2019 CPI Card Group Appendix	

	Copyright 2019 CPI Card Group Financial Results 17 Fourth Quarter and Full Year 2018* N/M Not Meaningful * Financial results included in this presentation for all periods reflect continuing operations. The sale of CPI U.K., which had historically been reported in the U.K. Limited segment, has been accounted for as a discontinued operation and comparative financial information has been restated. ** See Appendix for definitions of our Non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures.	

	Copyright 2019 CPI Card Group Non-GAAP Measures 18 Non-GAAP Financial Information In addition to financial results reported in accordance with U.S. generally accepted accounting principles (GAAP), we have provided the following non-GAAP financial measures in this presentation, all on a continuing operations basis: Adjusted Net (Loss) Income, Adjusted Diluted (Loss) Earnings per Share, EBITDA, Adjusted EBITDA, and Free Cash Flow. Adjusted Net (Loss) Income and Adjusted Diluted (Loss) Earnings per Share exclude the impact of amortization of intangible assets; litigation and related charges incurred in connection with certain patent and shareholder litigation; stock-based compensation expense; restructuring and other charges and other non-operational, non-cash or non- recurring items, net of their income tax impact. Beginning in 2018, a 21% tax rate is used to calculate adjusted net income (loss) and adjusted diluted earnings (loss) per share. EBITDA represents earnings before interest, taxes, depreciation and amortization all on a continuing operations basis. Adjusted EBITDA is defined as EBITDA, adjusted for litigation and related charges incurred in connection with certain patent and shareholder litigation; stock-based compensation expense; restructuring and other charges; foreign currency gain or loss; and other items that are unusual in nature, infrequently occurring or not considered part of our core operations, as set forth in the reconciliation. EBITDA, Adjusted EBITDA and Adjusted Net (Loss) Income should not be considered an alternative to net loss or loss before income taxes, cash flows from operating activities, or any other measure of financial performance calculated in accordance with GAAP, as those items are used to measure operating performance, liquidity or the ability to service debt obligations. The Company believes EBITDA, Adjusted EBITDA and Adjusted Net (Loss) Income present a transparent view of our recurring operating performance and allow management to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. Management also believes these measures are useful to investors in their analysis of our results of operations and provide improved comparability between fiscal periods. EBITDA, Adjusted EBITDA and Adjusted Net (Loss) Income, as CPI defines them, may not be comparable to EBITDA, Adjusted EBITDA and Adjusted Net (Loss) Income or similarly titled measures used by other entities. We define Free Cash Flow as cash flow from operations less capital expenditures. We use this metric in analyzing our ability to service and repay our debt and to forecast future periods. However, this measure does not represent funds available for investment or other discretionary uses since it does not deduct cash used to service our debt. Further, management and various investors use the ratio of total debt plus capital lease obligations less cash to last twelve months (LTM) Adjusted EBITDA, or “Net Debt Leverage Ratio,” as a measure of our financial strength and ability to incur incremental indebtedness when making key investment decisions and evaluating us against peers. Available liquidity is considered ending cash plus undrawn available revolver. Weighted average effective interest rate is computed as interest expense divided by debt of $312.5 million multiplied by four. Net Debt is computed as our outstanding principal amount of long-term debt less available cash. Additionally, the Company provided a reconciliation of US Debit and Credit segment EBITDA excluding impairments, for the comparable periods as presented within. This is presented to reflect EBITDA without the effects of impairment charges, and the resulting EBITDA margin percentage, and EBITDA growth rate year over year. This measurement is meaningful to show EBITDA without impairment charges to better reflect comparability between periods. This EBITDA metric without impairment charges has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for, analysis of our results as reported under GAAP. Investors are encouraged to review the reconciliation of these historical non-GAAP measures to their most directly comparable GAAP financial measures included herein. Additional information relating to certain financial measures, including our Non-GAAP financial measures, is available in our most recent earnings release and on our website at http://investor.cpicardgroup.com	

	Copyright 2019 CPI Card Group Non-GAAP 19 Reconciliation (1) (2) (1) Represents net legal costs incurred in connection with certain patent and shareholder litigation. (2) Represents primarily employee and lease termination costs incurred in connection with the decision to consolidate three personalization operations in the United States to two facilities, and employee termination costs incurred in the fourth quarter of 2018 in connection with the sale of our Canadian operations.. (1) (2)	

	Copyright 2019 CPI Card Group Non-GAAP 20 Reconciliation Share and per share amounts reflect the one-for-five reverse stock split for all periods presented	

	Copyright 2019 CPI Card Group Non-GAAP 21 Reconciliation