GPGI said its second-quarter results met its expectations as strong growth at CompoSecure (NASDAQ:CMPO) partly offset continued market-driven weakness at Husky. The company reiterated its full-year 2026 revenue, adjusted EBITDA and free-cash-flow outlook while narrowing its adjusted EBITDA margin expectation to account for tariff pass-through revenue and product mix at Husky.
Executive Chairman Dave Cote said GPGI’s performance reflected continued momentum at CompoSecure and “some indications of relief” in Husky’s markets. He said Husky has faced volatile resin prices, shipping disruptions tied to conflict in the Middle East and tariff uncertainty, though oil and resin prices had declined from peaks reached in late April.
Second-Quarter Results and Guidance
Chief Investment Officer Tom Knott said GPGI generated pro forma adjusted net sales of $473.2 million in the second quarter, down about 4% from a year earlier. Pro forma adjusted EBITDA was $113.9 million, down about 13%, while adjusted EBITDA margin declined 230 basis points year over year to 24.1%.
GPGI generated about $63 million in pro forma adjusted free cash flow during the quarter, which Knott said was significantly above the prior-year period.
The company maintained its full-year guidance for:
- Pro forma net sales of $1.95 billion to $2.1 billion;
- Pro forma adjusted EBITDA of $550 million to $610 million; and
- Pro forma adjusted free cash flow of $275 million to $325 million.
GPGI adjusted its full-year pro forma adjusted EBITDA margin outlook to 27% to 29%. Knott said the change reflected tariff pass-through revenue and the possibility of stronger system performance at Husky during the remainder of the year than management had anticipated in the prior quarter.
At the midpoint of its outlook, GPGI expects roughly flat year-over-year revenue and approximately 7% pro forma adjusted EBITDA growth for 2026. Knott said the company remains focused on debt reduction and continues to target leverage of three times by the end of 2026, with a long-term leverage target of two to two-and-a-half times excluding potential acquisition-related increases.
CompoSecure Reports Record Revenue and EBITDA
CompoSecure Chief Executive Officer Graham Robinson said the metal-card manufacturer posted record adjusted net sales of $133.6 million, up approximately 12% from the prior-year quarter. Adjusted EBITDA reached a record $55.2 million, up about 14%, while adjusted EBITDA margin expanded 70 basis points year over year to 41.3%.
Robinson attributed the results to demand for premium metal payment cards, new program wins and operational improvements from the Resolute Operating System, or ROS. He said ROS initiatives have improved manufacturing yields and output, supported international-market penetration and extended efficiency initiatives to non-manufacturing functions.
Recent program launches included Samsung, U.S. Bank’s Amazon Business, American Express Delta SkyMiles Reserve, Kleiner, DolarApp and CAST, according to Robinson. He said CompoSecure now has more than 200 active card programs and continues to see adoption of its Arculus capabilities.
The company is pursuing three primary growth initiatives: accelerating organic growth, expanding internationally and increasing Arculus momentum. Planned actions include expanding into debit cards, offering an entry-level metal-card option for issuers upgrading from plastic, opening a London design center, adding tokenization capabilities and evaluating opportunities outside payment cards.
Husky Sees Stabilization but Demand Deferrals Continue
Husky Chief Executive Officer Rob Domodossola said the business recorded adjusted net sales of $339.6 million, down approximately 9% year over year. Pro forma adjusted EBITDA fell about 23% to $64.9 million, and adjusted EBITDA margin declined 330 basis points to 19.1%.
Domodossola said macroeconomic uncertainty, geopolitical tension, elevated oil and resin prices and evolving tariff policies caused customers to defer some capital investment projects. Still, he cited better resin availability, increased activity in Husky’s system pipeline and initial savings from cost actions implemented during the quarter.
Husky’s margin expanded about 590 basis points sequentially, supported by improved labor and fixed-cost absorption as sales increased from the first quarter. Management expects revenue to be flat to slightly higher year over year in the second half, with margin improvement driven by seasonal demand, cost actions, productivity initiatives and operating leverage.
During the question-and-answer session, Knott said Husky’s pipeline had grown at a double-digit rate relative to the prior update. He added that system performance was better than expected and that the company was seeing strength in both PET systems and packaging machines. Domodossola said aftermarket-tooling pipeline growth had also accelerated in recent months.
Management did not provide specific pipeline or order figures. Knott said GPGI’s guidance does not assume a material improvement in macroeconomic conditions from current levels, though the company has observed marginal improvement.
Operating System and Acquisition Strategy
Cote and Domodossola emphasized that Husky remains in the earlier stages of its ROS deployment than CompoSecure. Husky’s initiatives include daily cross-functional meetings focused on factory loading, lead times and production output; commercial efforts to expand aftermarket sales; procurement discipline; and cost-control measures.
Husky also announced leadership additions, including Mohammad Kanaan as chief financial officer and Karen Stone as chief human resources officer. Benoit Jeanchaud was promoted to senior vice president of operations.
GPGI said it will continue to prioritize organic investment and bolt-on acquisitions at CompoSecure and Husky while evaluating potential new platform acquisitions. Knott said the company sees a growing group of large private-equity-owned businesses that may need alternative paths to access public markets, but stressed that GPGI is not under pressure to complete transactions.
“We don’t have to do anything, but we’re ready,” Knott said. “We’re looking, and we’re spending time with that discipline framework in place.”
About CompoSecure (NASDAQ:CMPO)
CompoSecure is a global provider of secure card and credential solutions, specializing in the design, manufacturing and personalization of payment cards, identification credentials and related services. The company develops a range of card products that include metal cards, composite cards and hybrid designs integrating advanced security features such as EMV chip technology, contactless interfaces and specialized surface treatments. CompoSecure’s offerings are tailored to the needs of banks, credit unions, fintech firms and government agencies seeking to differentiate their cards and enhance consumer engagement.
The company’s product portfolio extends beyond physical cards to encompass digital issuance and lifecycle management solutions.
