CXT substantially increased its debt burden through major acquisitions while experiencing declining profitability despite revenue growth.
The company has transformed its capital structure through significant M&A activity, acquiring OpSec and De La Rue Authentication Solutions, which required expanding credit facilities from $500M to $700M plus a £300M term loan. While these acquisitions drove meaningful revenue growth and expanded the Security and Authentication Technologies segment, net income declined over 20% despite higher gross profits, suggesting integration costs or operational challenges are pressuring margins.
CXT's balance sheet reflects major acquisition activity with total debt increasing by 86% to $1.0B and total assets growing 31% to $3.1B, supported by expanded credit facilities and cash reserves that rose 41% to $234M. Revenue growth drove gross profit up 29% to $1.2B, but net income fell 21% to $145M, indicating margin compression from acquisition-related costs or operational inefficiencies. The substantial debt increase and declining profitability amid expansion suggests the company is in a heavy investment phase with execution risk around realizing synergies from recent acquisitions.
Debt increased 85.8% — substantial leverage increase; assess whether deployed for growth or covering losses.
Cash position surged 41% — strong cash generation or capital raise providing significant financial cushion.
Liabilities grew 40.7% — significant increase in debt or obligations, assess impact on financial flexibility.
Current assets grew 32.7% — improving short-term liquidity or inventory/receivables build.
Receivables surged 32.3% — revenue recognized but not yet collected; watch for collection issues or channel stuffing.
Asset base grew 30.6% — expansion through organic growth, acquisitions, or capital deployment.
Gross profit expanding — improving pricing power or product mix shift toward higher-margin offerings.
Net income declined 21.2% — review whether driven by operations, interest costs, or non-recurring items.
Equity base grew 17.7% — retained earnings accumulation or equity issuance strengthening the balance sheet.
Inventory built 17.1% — monitor whether demand supports this build or if write-downs may follow.
See what changed in your portfolio's filings
500+ US-listed companies analyzed. Language delta, financial analysis, instant signal scoring.
Try Tracenotes free →