LITTLETON, Colo. - CPI Card Group Inc . (NASDAQ:PMTS (TSX:PMTS)), a leader in payment technology solutions, announced today the initiation of a secondary public offering of 1,000,000 shares by certain stockholders associated with Parallel49 Equity. These stockholders are also expected to offer the underwriters an option to purchase up to an additional 150,000 shares within a 30-day period. The completion and terms of this offering are contingent on prevailing market conditions, and there is no certainty regarding its finalization or the specifics of the offering.
All proceeds from the sale will go directly to the selling stockholders, with CPI Card Group not offering any of its own shares nor receiving any proceeds from the transaction. D.A. Davidson & Co. is serving as the sole book-running manager for the offering.
The shares are being offered under a registration statement already declared effective by the U.S. Securities and Exchange Commission (SEC). A preliminary prospectus supplement and accompanying prospectus have been filed with the SEC, with the offering being made exclusively through these documents. Interested parties can obtain copies of the prospectus and preliminary prospectus supplement through D.A. Davidson & Co.
This announcement does not constitute an offer to sell or a solicitation of an offer to buy the securities, and the sale will not take place in any jurisdiction where such an offering would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
CPI Card Group specializes in a wide array of credit, debit, and prepaid card solutions, including Software-as-a-Service (SaaS) based instant issuance. The company prides itself on fostering personal relationships and delivering innovative solutions that enhance customer brands and connect with users.
The information for this article is based on a press release statement, and it is essential to note that forward-looking statements included in the press release are subject to risks, uncertainties, and other factors that could cause actual events to differ materially from those anticipated. CPI Card Group has cautioned against placing undue reliance on these forward-looking statements, which are valid only as of their date.
In other recent news, CPI Card Group reported a mixed financial performance in its Q2 earnings call. The company saw a 3% increase in net sales, boosted by growth in the prepaid segment, instant issuance, and card personalization businesses. However, net income and adjusted EBITDA declined by 8% and 6%, respectively. The company also highlighted its strategic focus on expanding into adjacent markets and investing in digital solutions, amidst a recent CEO transition.
Despite the growth in sales, the company's net income for the first half of the year decreased by 34% to $11.5 million, and adjusted EBITDA fell by 7% to $44.9 million. However, the Prepaid Debit segment's income from operations increased by 38% year-to-date, and the company's Card@Once solution was identified as a high-margin business with potential for further growth.
CPI Card Group has updated its full-year 2024 outlook to mid-single-digit sales growth and slight adjusted EBITDA growth compared to 2023. The company is also investing in people, technology, and its digital business for future growth. These are among the recent developments for CPI Card Group.
InvestingPro Insights
As CPI Card Group Inc. (NASDAQ:PMTS) prepares for a secondary public offering, investors may find value in examining the company's financial health and market performance. According to InvestingPro data, PMTS has a market capitalization of $301.71 million, indicating its mid-cap status in the payment technology solutions sector.
The company's P/E ratio of 16.89 suggests a reasonable valuation compared to its earnings, which could be attractive to potential investors in the secondary offering. This is further supported by an InvestingPro Tip highlighting that the company's valuation implies a strong free cash flow yield, potentially indicating efficient capital management.
PMTS has demonstrated impressive market performance, with a 52.35% price total return over the past six months. This aligns with another InvestingPro Tip noting a large price uptick over the last six months, which may contribute to investor interest in the upcoming share sale.
It's worth noting that while the company isn't offering its own shares in this transaction, its financial stability is evident. An InvestingPro Tip reveals that PMTS's liquid assets exceed short-term obligations, suggesting a strong balance sheet position that could reassure potential buyers of the offered shares.
For those seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for CPI Card Group, providing deeper insights into the company's financial health and market position. These additional tips could be particularly valuable for investors considering participating in the secondary offering or evaluating PMTS's long-term prospects in the payment technology sector.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.