Good morning, and welcome to the CPI Card Group's Third Quarter 2018 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to William Maina, Investor Relations. Please go ahead.

Thank you, Operator, and good morning everyone. Welcome to the CPI Card Group third quarter 2018 earnings conference call. Participating on today's call from CPI Card Group are Scott Scheirman, President and Chief Executive Officer; and John Lowe, Chief Financial Officer. Before we begin, I would like to remind everyone that this call may contain forward-looking statements as they are defined under the Private Securities Litigation Reform Act of 1995. Please refer to the disclosures at the end of the company's earnings press release for information about forward-looking statements that may be made or discussed on this call. The earnings press release is posted on CPI's website. Please note there is also a presentation that accompanies this conference call and is also accessible in the IR section of our website. Please review the information along with our filings with the SEC and on SEDAR for a disclosure of the factors that may impact subjects discussed on this call. All forward-looking statements made today reflect our current expectations only and we undertake no obligation to update any statements that reflects the events that occur after this call. As a reminder, all of the figures presented today reflect CPI's U.K. Limited segment accounted for as a discontinued operation in accordance with U.S. GAAP. Also during the course of today's call, the company will be discussing one or more non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income and loss, adjusted diluted earnings and loss per share, and free cash flow all reported on a continuing operations basis. Please see the earnings release on CPI's website for all the disclosures required by the SEC, including reconciliations to the most comparable GAAP measures. Please note that this call will conclude after our prepared remarks. And now I'd like to turn the call over to Scott Scheirman, President and Chief Executive Officer of CPI.

Thanks Will, and good morning everyone. Thank you for joining us today. Beginning on Slide 4, you will find highlights of our third quarter 2018 results. Overall we are pleased with our third quarter results and we're performing well relative to our objectives for the first nine months of 2018. We generated net sales of $71 million up 16% year-over-year driven by double-digit net sales growth across both U.S. debit and credit and prepaid debit segments. Our U.S. debit and credit segment net sales grew approximately 20% year-over-year primarily reflecting growth of our emerging products and solutions. Our prepaid debit segment net sales growth in the third quarter was approximately 11% compared to the year ago period reflecting additional business from our customer base. We recorded a GAAP net loss from continuing operations of approximately $1 million in the third quarter and we were essentially breakeven on an adjusted basis. We generated adjusted EBITDA from continuing operations or approximately $9 million in the third quarter primarily reflecting net sales growth offset by $1.9 million of incremental employee performance incentive compensation due to the company's improved performance in 2018. And finally, we ended the quarter with $32.8 million of total liquidity comprised of $12.8 million of cash on our balance sheet, and $20 million available on our revolving credit facility. Turning now to Slide 5, as I mentioned we are pleased with our improved results in the third quarter and year-to-date 2018. We believe our recent performance and the momentum we are seeing in our business reflects the continued focus of our entire organization on our four key priorities which include; first, deep customer focus; second, providing market-leading quality products and customer service; third, a market competitive business model; and fourth, continuous innovation. Now turning to Slide 6, similar to our…

Thanks Scott, and good morning everyone. As Scott mentioned we are pleased with our third quarter financial and operating results. On Slide 10 you will see an overview of our third quarter 2018. As a reminder, all of the financial results I'm sharing today reflect continuing operations and exclude our U.K. business segment which was sold on August 3 and is treated as a discontinued operation under U.S. GAAP. Total net sales were $71 million, an increase of 16.4% from $61 million in the third quarter of 2017. Product net sales increased 29.5% year-over-year to $34.7 million in the third quarter. This growth was driven primarily by our emerging products and solutions including dual interface EMV cards, CPI metals, and Card@Once. Services net sales increased 6.1% year-over-year to $36.3 million primarily driven by growth in our U.S. prepaid debit segment, as well as our card personalization and fulfillment business. Gross profit for the third quarter was $23.3 million, a 19.9% year-over-year and representing a gross margin of 32.8% compared with $19.4 million and 31.9% in the third quarter of 2017. The year-over-year increase in our gross profit and margin for the third quarter of 2018 primarily reflects our top line growth, our focus on higher-margin products and solutions, and our ongoing cost reductions and efficiency initiatives. Our SG&A expenses for the third quarter of 2018 were $17 million, up 17.1% year-over-year. The increase in our SG&A is primarily due to higher employee performance incentive compensation as a result of improved performance year-over-year. Income from operations in the third quarter of 2018 was $4.7 million, up 39.1% from $3.4 million in the prior year period. We reported a GAAP net loss from continuing operations of $1.1 million or $0.10 loss per diluted share in the third quarter of 2018. This is…

Thanks John. We delivered solid third quarter results and we have performed well relative to our objectives for the first nine months of 2018. Our daily focus remains on our four key priorities which we believe will position us to be the partner of choice by providing market-leading quality products and customer service with a market competitive business model. I am pleased with the progress we've made and look forward to sharing our continued progress with you early next year on our fourth quarter earnings call. Operator, you may now end the call.

The conference has now concluded. We thank you for attending today's presentation. You may now disconnect.