poSecure(US:CMPO)2025-11-03 16:14Financial Performance - The Company reported net sales of $0 for the three months ended September 30, 2025, a decrease of $107.1 million, or 100%, compared to $107.1 million in the same period of 2024, primarily due to the deconsolidation of Holdings[166]. - Gross profit for the same period decreased by $55.4 million, or 100%, to $0, with the gross margin dropping from 52% to 0% as a result of the Spin-Off[171]. - The Company experienced a loss from operations of $9.9 million for the three months ended September 30, 2025, compared to income from operations of $29.1 million in the same period of 2024[173]. - The loss before income taxes increased to $184.5 million for the three months ended September 30, 2025, compared to a loss of $84.8 million in the prior year, representing a 117% increase[166]. - The net loss attributable to CompoSecure, Inc. was $174.7 million for the three months ended September 30, 2025, compared to a net loss of $42.1 million in the same period of 2024, marking a 315% increase[166]. - For the nine months ended September 30, 2025, net sales decreased by $259.9 million, or 81%, to $59.8 million compared to $319.7 million for the same period in 2024[178]. - Gross profit for the nine months ended September 30, 2025, decreased by $137.9 million, or 83%, to $28.7 million, with a gross margin decline from 52% to 48%[181]. - The company reported a net loss of $179.3 million for the nine months ended September 30, 2025, compared to a net loss of $34.8 million for the same period in 2024, representing a 415% increase in net loss[177]. - The company had a loss from operations of $6.6 million for the nine months ended September 30, 2025, compared to income from operations of $92.0 million for the same period in 2024[183]. - For the three months ended September 30, 2025, the company reported a net loss of $174.7 million, compared to a net loss of $85.5 million for the same period in 2024[196]. Sales Performance - The Company’s domestic net sales for the three months ended September 30, 2025 decreased by $80.0 million, or 100%, to $0, while Holdings generated $105.1 million of domestic net sales for the same period[169]. - International net sales also decreased by $27.1 million, or 100%, to $0, with Holdings generating $15.8 million of international net sales for the three months ended September 30, 2025[170]. - Domestic net sales decreased by $203.5 million, or 79%, to $54.5 million for the nine months ended September 30, 2025, compared to $258.0 million for the same period in 2024[179]. - International net sales decreased by $56.4 million, or 91%, to $5.3 million for the nine months ended September 30, 2025, compared to $61.7 million for the same period in 2024[180]. Operating Expenses - Operating expenses decreased by $16.4 million, or 62%, to $9.9 million for the three months ended September 30, 2025, compared to $26.3 million in the prior year[172]. - Operating expenses for the nine months ended September 30, 2025, decreased by $39.4 million, or 53%, to $35.3 million compared to $74.7 million for the same period in 2024[182]. - Other expenses for the nine months ended September 30, 2025, were $211.1 million, an increase of $84.3 million, or 67%, compared to $126.8 million for the same period in 2024[184]. Equity Method Investment - Earnings in equity method investment amounted to $39.6 million for the three months ended September 30, 2025, reflecting a 100% increase from the previous period[166]. - Earnings in equity method investment amounted to $93.4 million for the nine months ended September 30, 2025, resulting from the deconsolidation associated with the Spin-Off[185]. Cash Flow and Financing - The company had cash and cash equivalents of $127.4 million as of September 30, 2025, up from $77.5 million as of December 31, 2024[205]. - Cash used in operating activities for the nine months ended September 30, 2025, was $8.9 million, a decrease of $104.3 million compared to cash provided by operating activities of $95.4 million in the same period of 2024[207]. - Cash used in investing activities for the nine months ended September 30, 2025, was $60.7 million, primarily due to cash and cash equivalents deconsolidated from the Spin-Off[208]. - Cash provided by financing activities for the nine months ended September 30, 2025, was $119.5 million, compared to cash used of $78.5 million in the same period of 2024[209]. - The company reported total debt principal outstanding of $190.0 million as of September 30, 2025, down from $197.5 million as of December 31, 2024[205]. - The company anticipates using acquisitions as part of its growth strategy, which may require additional equity or debt financing[206]. Interest Rate Risk - Holdings had $190.0 million in variable rate debt outstanding as of September 30, 2025, exposing the company to interest rate risk[213]. - An increase or decrease of 100 basis points in the applicable interest rate would result in an annual change in interest expense of approximately $1.9 million[214]. Spin-Off Impact - The Spin-Off of Resolute Holdings was completed on February 28, 2025, resulting in the Company no longer consolidating Holdings and accounting for it as an equity method investment[151]. - Adjusted net income for the three months ended September 30, 2025, was $33.99 million, representing an increase of 50.8% from $22.52 million in the same period of 2024[196].