We use cookies to improve your experience, analyze site usage, and show relevant ads. Go to our Privacy Policy for details.
The call presented a mixed outlook: CompoSecure delivered a very strong, record quarter with significant revenue and margin expansion driven by ROS and new program wins, stable adjusted free cash flow and a stronger balance sheet from refinancing. Offsetting these positives are meaningful, macro-driven headwinds at Husky (orders down ~16% late in the quarter, EBITDA down ~40%, margin compression of ~770 bps), resin-price volatility and geopolitical/tariff uncertainty that pushed ~>$20M of revenue into future periods. Management emphasized ROS rollout, continued R&D investment and confidence in recovery, but the sizable Husky weakness materially impacted consolidated results, prompting wider guidance ranges.
GPGI issued revised guidance: for 2Q FY‑2026 it expects net sales of $425–$475 million, pro forma adjusted EBITDA of $105–$120 million and pro forma adjusted EBITDA margins of 24.7%–25.3%; for FY‑2026 it now expects pro forma net sales of $1.95–$2.10 billion, pro forma adjusted EBITDA of $550–$610 million and pro forma adjusted EBITDA margins of 28.2%–29.0%, with pro forma adjusted free cash flow of $275–$325 million and an anticipated year‑end total leverage of ~3.0x; management noted Q1 generated roughly $29 million of adjusted free cash flow and that approximately $20 million of revenue was deferred late in the quarter (≈$6M delivery delays, ≈$5M shipment/logistics, ≈$4M payment delays), driving the wider guidance range.
CompoSecure delivered pro forma net sales of $130.4M (+25.6% YoY) and pro forma adjusted EBITDA of $47.6M (+36.8% YoY); adjusted EBITDA margin expanded ~300 bps to 36.5%. New program wins include American Express Graphite, X Money, Robinhood Platinum, Revolut Audi F1, Fold, Kraken and MetaMask US. Management credits 18 months of Resolute Operating System (ROS) implementation for step-change manufacturing yields and operational efficiencies.
GPGI reported pro forma adjusted net sales of $421.2M, up ~3% year-over-year, reflecting strong CompoSecure performance that offset weaker results at Husky.
Company-wide pipeline grew ~4% YoY in Q1 and was up ~7% YoY through April. Husky has an installed base of ~13,500 systems, with roughly 65% of revenue recurring (parts, tooling, services), supporting aftermarket resilience.
Generated approximately $29M of adjusted free cash flow in Q1 (similar to prior year). Completed debt refinancing that extends maturities and materially reduces interest burden; management expects to finish the year at roughly 3x total leverage.
Management provided updated guidance: Q2 net sales $425M–$475M and pro forma adjusted EBITDA $105M–$120M; FY2026 pro forma net sales $1.95B–$2.1B and pro forma adjusted EBITDA $550M–$610M, with pro forma EBITDA margin 28.2%–29.0% and adjusted free cash flow $275M–$325M.
Resolute Operating System is driving measurable improvements at CompoSecure and being aggressively implemented at Husky; the company is continuing to expand R&D and invest in commercial capabilities despite near-term market headwinds to position for long-term growth.
Good day and thank you for standing by. Welcome to the GPGI, Inc. First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dave Marshall, Chief Legal Counsel. Please go ahead.
Thanks, Ann. Good morning and welcome to GPGI's conference call where we'll review GPGI's first quarter 2026 financial results. With me on the call today are the business leaders from GPGI, Resolute Holdings, CompoSecure and Husky. We'll begin with prepared remarks and then open the call for Q&A. During the call, we'll make statements regarding our business that may be considered forward-looking, including statements regarding our growth strategy, customer demand, macroeconomic factors, implementation of the Resolute Operating System and our guidance for 2026 as well as other statements regarding our plans and prospects. For a discussion of material risks and other important factors that could affect our actual results, please refer to the information in our reports filed with the SEC, which are available on the Investor Relations section of our website and on the SEC's website at sec.gov. As a reminder regarding the company's accounting. On February 28, 2025, GPGI completed the spin-off of Resolute Holdings Management, Inc.
and our wholly owned subsidiary GPGI Holdings entered into a management agreement with Resolute Holdings. As a result, the results of operations of GPGI Holdings and the operating companies which are subsidiaries, including CompoSecure and Hu...
