CompoSecure Reports First Quarter 2025 Financial Results

   -- Operating results in line with expectations 
 
   -- Reiterating previously issued full-year 2025 guidance 
 
   -- Completed spin-off of Resolute Holdings Management, Inc. (Nasdaq: RHLD) 
 
   -- Accounting standards related to the spin-off require the Company to 
      report results using equity method of accounting in accordance with U.S. 
      GAAP 
 
   -- Non-GAAP results are also included below and provide a clearer picture of 
      the underlying financial performance of the operating business consistent 
      with historical reporting 

SOMERSET, N.J., May 12, 2025 (GLOBE NEWSWIRE) -- CompoSecure, Inc. (Nasdaq: CMPO), a leader in metal payment cards, security, and authentication solutions, today announced its financial and operating results for the first quarter ended March 31, 2025.

"We started the year with solid execution across our payment card and Arculus business," said Jon Wilk, President and CEO of CompoSecure. "Demand has continued to strengthen throughout the second quarter, reflecting strong sales momentum, and we anticipate this sustained growth trajectory will carry through the remainder of the year. Our team remains focused on continuing to implement the CompoSecure Operating System ("COS") throughout the business and we are beginning to see these ongoing efforts yield results."

Mr. Wilk added, "We delivered record results for Arculus, generating another net positive contribution in Q1 as we are seeing metal card customers beginning to future-proof their offerings by bundling Arculus Authenticate with payment capabilities. As previously stated, we expect a net positive contribution for the full year as Arculus remains a powerful differentiator that sets CompoSecure apart in the digital asset and evolving Web3 payments landscape."

Dave Cote, CompoSecure's Executive Chairman, stated: "I am pleased with our first quarter results and with the team's continued engagement implementing COS. Our metal cards enhance brand loyalty and deliver accelerated returns for our customers through superior acquisition, spending, and retention. As more issuers recognize the value our products deliver, we see significant opportunities for continued growth and are planting seeds through strategic investments to execute on the market opportunity we see while leveraging the COS to enhance efficiency and execution. Taken together, we are excited about the work at CompoSecure and believe the Company is well positioned for the remainder of 2025."

Financial Results

As a result of the spin-off of Resolute Holdings Management, Inc. ("Resolute Holdings") on February 28, 2025 and the execution of the management agreement with Resolute Holdings, CompoSecure is required to account for the operating results of its wholly owned operating subsidiary, CompoSecure Holdings L.L.C. ("CompoSecure Holdings"), under the equity method in accordance with U.S. GAAP, effective February 28, 2025.

The GAAP results presented below reflect the consolidated operating results of CompoSecure from January 1, 2025 to February 27, 2025 and the subsequent conversion to the equity method presentation from February 28, 2025 to March 31, 2025. For clarity of comparisons and to best reflect the financial results associated with the standalone payment card and Arculus business, the Company is also presenting the full first quarter on a historical consolidated basis under the "Non-GAAP Results" heading below.

 
                         1Q 2025                        1Q 2024 
----------------  ----------------------  ------------------------------------ 
Accounting 
Treatment          GAAP      Non-GAAP           GAAP             Non-GAAP 
----------------  ------  --------------  -----------------  ----------------- 
Net Sales ($ in 
 millions)         $59.8    $103.9(1)         $104.0(1)          $104.0(1) 
----------------  ------  --------------  -----------------  ----------------- 
Gross Profit ($ 
 in millions)     $28.70    $54.50(1)         $55.20(1)          $55.20(1) 
----------------  ------  --------------  -----------------  ----------------- 
Gross Margin (%)    48.1     52.5(1)           53.1(1)            53.1(1) 
----------------  ------  --------------  -----------------  ----------------- 
Pro-Forma 
 Adjusted EBITDA 
 ($ in 
 millions)                 $33.7((2) ()                        $34.5((2) () 
----------------  ------  --------------  -----------------  ----------------- 
EPS/Adjusted EPS 
 -- Diluted        $0.07      $0.25             $0.17              $0.24 
----------------  ------  --------------  -----------------  ----------------- 
Cash ($ in 
 millions)          $9.5  $71.7((1,3) ()  $55.1((1,) (4) ()  $55.1((1,) (4) () 
----------------  ------  --------------  -----------------  ----------------- 
Total Debt ($ in 
 millions)                $195.0((3) ()                        $335.6((4) () 
----------------  ------  --------------  -----------------  ----------------- 
(1) Refers to a Consolidated Non-GAAP Measure. For 
 1Q24, Net Sales, Gross Profit, Gross Margin, and Cash 
 are identical on a GAAP and Non-GAAP basis, because 
 such measures have historically been shown on a consolidated 
 basis; (2) Pro-Forma Adjusted EBITDA in the table 
 includes ($3.2mm) expense in both 1Q25 and 1Q24. 
 This expense represents a full quarter of management 
 fees due to Resolute Holdings. The adjustment was 
 made to allow for comparability across periods. The 
 actual payment to Resolute Holdings in 1Q25 was $1.1mm 
 because the contract has been effective since February 
 28(th) spin-off. $0 were paid in 1Q24 because Resolute 
 Holdings did not exist. Please see Statement of Operations 
 on page 9 for full reconciliation. (3) As of March 
 31, 2025. (4) As of March 31, 2024. 
------------------------------------------------------------------------------ 
 

GAAP Results: Q1 2025 Financial Highlights (vs. Q1 2024)

Important Note: These GAAP results reflect the consolidation of CompoSecure Holdings, L.L.C. through February 27, 2025, and the application of equity method accounting beginning February 28, 2025, following the completion of the Resolute Holdings Management, Inc. spin-off.

   -- Net Sales: Net Sales in CompoSecure Inc., were $59.8 million from January 
      1, 2025 through February 27, 2025; and Net Sales of CompoSecure Holdings 
      were $44.1 million from February 28, 2025 through March 31, 2025 (which 
      is reflected in the Company's financial statements as an equity method 
      investment from February 28, 2025). 
 
   -- Net Income: Net Income was $21.5 million compared to $17.1 million in the 
      year-ago period. 
 
   -- Earnings Per Share: EPS attributable to Class A common shareholders was 
      $0.21(Basic) and $0.07(Diluted) compared to $0.20 (Basic) and $0.17 
      (Diluted) in the year-ago period. The increase was primarily driven by 
      non-cash gains related to the revaluation of warrant and earnout 
      liabilities. 

Non-GAAP Results: Q1 2025 Financial Highlights (vs. Q1 2024)

   -- Consolidated Net Sales: Consolidated Net Sales were $103.9 million 
      compared to $104.0 million in the year-ago period. 
 
   -- Consolidated Gross Profit: Consolidated Gross Profit was $54.5 million or 
      52.5% of Net Sales, compared to $55.2 million or 53.1% in the year-ago 
      period. The decrease in gross margin was primarily driven by product mix. 
 
   -- Adjusted Net Income Adjusted Net Income increased 21% to $28.4 million 
      compared to $23.3 million in the year-ago period. 
 
   -- Adjusted Earnings Per Share: Adjusted Earnings Per Share was $0.28 
      (Basic) and $0.25 (Diluted) compared to $0.29 (Basic) and $0.24 (Diluted) 
      in the year-ago period. 
 
   -- Pro Forma Adjusted EBITDA: Pro Forma Adjusted EBITDA was $33.7 million 
      compared to $34.5 million in the year-ago period, with the decrease 
      primarily due to higher general and administrative expenses due to growth 
      investments. 

Financial Condition

   -- GAAP Financial Condition: At March 31, 2025, CompoSecure had $9.5 million 
      of cash and cash equivalents. The Company's liquidity needs are expected 
      to be met with funding from the operations of CompoSecure Holdings. 
 
   -- Non-GAAP Financial Condition: At March 31, 2025, CompoSecure had $71.7 
      million of cash and cash equivalents and $195.0 million of total debt, 
      resulting in net debt of $180.7 million. This compares to cash and cash 
      equivalents of $55.1 million and total debt of $335.6 million at March 
      31, 2024. CompoSecure's bank agreement senior secured debt leverage ratio 
      was 1.05x at March 31, 2025 compared to 1.34x at March 31, 2024. 

Additional Highlights

   -- Vertical industry successes for Arculus include MetaMask (crypto 
      payments), MoneyGram (cross-border payment services), and Circular 
      (healthcare). 

2025 Financial Outlook

CompoSecure is reiterating its previously issued full year 2025 guidance, which calls for mid-single digit growth in both Consolidated Net Sales and Pro Forma Adjusted EBITDA with sales momentum building through the year. This guidance includes payment of the Resolute Holdings management fee in 2025 and 2024, on a pro forma basis.

Conference Call

CompoSecure will host a conference call and live audio webcast today at 5:00 p.m. Eastern time to discuss its financial and operational results, followed by a question-and-answer session.

Date: Monday, May 12, 2025

Time: 5:00 p.m. Eastern time

Dial-in registration link: here

Live webcast registration link: here

If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.

A live webcast and replay of the conference call will be available on the investor relations section of CompoSecure's website at https://ir.composecure.com/news-events/events.

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