GPGI — Third Quarter 2026 Earnings Summary

Financial Performance:

• Pro Forma Adjusted Net Sales for 3Q26 reached $509.6 million, an increase of 0.5% year-over-year compared to $487.9 million in 3Q25.
• Pro Forma Adjusted EBITDA for 3Q26 was $146.3 million, up 6.6% year-over-year from $137.3 million in 3Q25.
• Pro Forma Adjusted EBITDA margin for 3Q26 was 28.7%, an improvement of approximately 60 basis points from 28.1% in 3Q25.
• CompoSecure reported record Adjusted Net Sales of $140.7 million, up 16.4% year-over-year, and record Pro Forma Adjusted EBITDA of $61.2 million, up 22.9% year-over-year, with margins expanding ~230 basis points to 43.5%.
• Husky reported Adjusted Net Sales of $368.9 million, up 0.5% year-over-year, and Pro Forma Adjusted EBITDA of $88.8 million, down 0.9% year-over-year, with margins down ~30 basis points to 24.1% but improving ~500 basis points sequentially.
• Corporate Pro Forma Adjusted EBITDA was ($3.7) million for 3Q26, compared to ($2.1) million in 3Q25.
• Pro Forma Adjusted Free Cash Flow for 3Q26 was $80.7 million.
• As of September 30, 2026, the company held $176 million in cash and $2,097 million in total debt outstanding, resulting in Net Debt of $1,921 million and a Net Debt to LTM Pro Forma Adjusted EBITDA ratio of 3.7x.
• Total liquidity was $569 million, comprising cash and $393 million in revolver capacity.

Guidance and Future Outlook:

• FY26 Pro Forma Adjusted Net Sales guidance remains unchanged at $2,034 million to $2,064 million, representing ~1% growth year-over-year.
• FY26 Pro Forma Adjusted EBITDA guidance was lowered to $520 million to $550 million (midpoint ~$535 million), a decrease of approximately 8% ($25 million) from the prior midpoint, primarily due to Husky cost delays.
• FY26 Pro Forma Adjusted EBITDA margin guidance was lowered to 25.0%–27.0%, a contraction of approximately 80 basis points year-over-year.
• FY26 Pro Forma Adjusted Free Cash Flow guidance is $250 million to $300 million.
• 4Q26 Pro Forma Adjusted Net Sales guidance is $630 million to $660 million, expecting Low Single Digit (LSD) organic revenue growth at the midpoint.
• 4Q26 Pro Forma Adjusted EBITDA guidance is $178 million to $208 million, expecting High Single Digit (HSD) growth at the midpoint.
• 4Q26 Pro Forma Adjusted EBITDA margin is expected to be 27.0%–29.0%.
• 4Q26 Pro Forma Adjusted Free Cash Flow is expected to be $77 million to $127 million.
• CompoSecure is expected to grow in the high teens for FY26 and 4Q26.
• Husky is expected to decline in the low single digits for FY26 and grow flat to low single digits for 4Q26.
• The company anticipates a return to its long-term growth algorithm in 2027, targeting mid-to-high single-digit organic revenue growth, 100+ basis points of margin rate expansion, and double-digit plus EBITDA growth.
• Husky pipeline is up 16% year-over-year and total orders are up 7% year-over-year as of 3Q26.

Business Segments and Product Lines:

• CompoSecure: Delivered record sales and margins driven by robust demand across a broadening customer base and new program wins, including premium debit cards for private wealth. Opened a London Design Center to support international expansion. Holds 200+ active metal payment card programs and serves 9 of the top 10 U.S. card issuers.
• Husky: Returned to growth in systems and saw strong growth in service (spare parts and contracts), offset by slower order conversion in aftermarket tooling and hot runners. Launched HyCAP PRO and HyCAP 4.0 next-generation bottle closure platforms.
• Husky Market Metrics: Aftermarket orders increased 13% year-over-year; total pipeline increased 16% year-over-year; total orders increased 7% year-over-year; total backlog increased 3% year-over-year.
• Both businesses are undergoing cultural transformation and ROS (Resolute Operating System) implementation to drive operational efficiency and margin expansion.
• Growth capital spending is planned for both CompoSecure and Husky to support future growth and innovation.

Market and Competitive Landscape:

• CompoSecure is positioned as the one-of-one category creator for premium metal payment cards, benefiting from tailwinds such as ultra-low penetration in a large Total Addressable Market (TAM) and issuers ramping marketing spend on signature metal programs.
• Husky faces headwinds from elevated resin prices and logistics costs, though demand is showing signs of recovery with a healthy PET non-alcoholic beverage bottle consumption market.
• Husky's industry-leading efficiency provides a compelling value proposition as resin prices stabilize at higher levels.
• The company notes that market demand for Husky's mission-critical equipment remains durable.

Risks and Challenges:

• Husky's FY26 EBITDA miss was driven by a cost miss of approximately $31 million versus the May forecast, primarily due to direct labor being too high, delayed indirect expense reductions, and unfavorable product mix.
• Headwinds at Husky include delayed realization of identified cost actions, elevated freight and duties, product mix shifts, and growth investments.
• Potential risks include elevated interest rates impacting new card issuance, potential mix impacts from complex programs, and potential deferral of purchases due to reacceleration in resin prices and logistics costs.
• Forward-looking statements are subject to risks including geopolitical instability (including in the Middle East), changes in input prices (oil and resin), and unanticipated changes in demand.

Management Commentary and Tone:

• Management described 3Q26 performance as "in-line with expectations," highlighting strength at CompoSecure and improving demand at Husky.
• Management expressed confidence in returning to the long-term growth algorithm in 2027, citing the "combinations of high ROIC businesses + ROS deployment" as a catalyst for a compounding flywheel.
• Management noted that Husky's cultural transformation is underway with a focus on urgency and accountability.
• Management stated that the 2026 EBITDA miss is driven by cost execution issues rather than sales, and these issues are not expected to carry over into 2027.
• Management emphasized disciplined capital allocation and the deployment of the ROS to unlock durable compounding.

Other Key Points:

• The presentation includes Non-GAAP financial measures (Adjusted and Pro Forma) to provide comparability following the spin-off of Resolute Holdings and the shift to equity method accounting effective February 28, 2025.
• GPGI has no near-term debt maturities, with a $400 million revolver maturing in 2031 and $2.1 billion in term loans and senior secured notes maturing in 2033.
• The company is targeting a Non-GAAP year-end net LTM leverage of approximately 3.5x.
• Insider ownership by The David Cote Family is 17.8%, compared to 0.4% for Industrial Compounders.
• The company is undervalued relative to peers based on illustrative 2027 earnings multiples, with a Price/Earnings of 25.9x versus 20.7x for Industrial Compounders.
• The company has ample liquidity and is focused on debt paydown.