Good day and welcome to the CPI Card Group First Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jennifer Almquist of Investor Relations. Please go ahead.

Thanks, Andrea, and good morning, everyone. Welcome to the CPI Card Group First Quarter 2019 Earnings Conference Call. On the call today from CPI Card Group is Scott Scheirman, President and Chief Executive officer; and John Lowe, Chief Financial Officer. Before we begin, I'd 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. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. For a discussion of such risks and uncertainties, please see CPI Card Group's most recent filings with the SEC and on SEDAR. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statement to reflect the events that occur after this call. Also during the course of today's call, the company will be discussing one or more non-GAAP financial measures including, but not limited to, EBITDA, adjusted EBITDA and free cash flow, all reported on a continuing operations basis. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in the press release and slide presentation we issued this morning. Please be advised that the financial results discussed on the call today reflect continuing operations and therefore exclude the results of CPI's UK Limited segment, which was divested in August of 2018, and has been accounted for as discontinued operations in accordance with US GAAP. The disposition of the CPI Canada business closed on April 1, 2019, and does not re-qualify as a discontinued operation in accordance with US GAAP. Results for the Canada business as well as disposition related costs are reflected in the other segment. Copies of today's press release as well as a presentation that accompanies this conference call are accessible on CPI's Investor Relations website, investor.cpicardgroup.com. 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, Jen, and good morning, everyone. Thank you for joining us today. I will begin my prepared remarks on slide 4. First quarter results reflected a strong start to 2019, as we continue to perform well against our strategic priorities. Through solid execution, we increased first quarter net sales by 22%, improved our net loss by 45% and grew adjusted EBITDA 101% when compared with the first quarter last year. Our US Debit and Credit segment increased net sales across every one of its business units, resulting in a 32% increase in segment net sales year-over-year, in addition to significant year-over-year operating margin improvements. Our Prepaid segment delivered increased sales from existing customer base driving net sales growth of 8% and improving its operating margin compared to the prior year. Turning to slide 5. We remain committed to our vision of being a partner of choice by providing market leading quality products and customer service with a market competitive business model. Our solid execution this quarter reflects our continued focus on our four strategic priorities. First, deep customer focus. Second, market leading quality products and customer service. Third, market competitive business model. And fourth, continuous innovation. On slide 6, I want to take a moment to update you on our progress relative to these priorities through the first quarter. Beginning with our first priority, deep customer focus, we remain committed to keeping our customers at the center of everything we do delivering value and helping them to achieve their goals. As an example, our prepaid business recently supported its customers by quickly increasing production to meet the changing demands in the industry. By being responsive and listening to our customers' needs, we are able to support these customers and deliver value. Our second strategic priority providing market-leading quality products and…

Thanks, Scott, and good morning, everyone. On slide 9, you will see an overview of our results for the first quarter of 2019. As a reminder, the comparative results for 2018 are on a continuing operations basis and exclude the UK business that was divested and reported as a discontinued operation during 2018 as required by US GAAP. First quarter net sales increased 22% compared with the first quarter of 2018, driven by a 32% increase in net sales from our US Debit and Credit segment and 8% net sales growth from our US Prepaid debit segment. First quarter gross profit was nearly $22 million, up 49% over last year. Gross margins increased to 32% in the first quarter of 2019 compared with 26% in the first quarter of 2018. These increases were largely the result of net sales growth and a more favorable mix towards higher margin products and services in the 2019 first quarter. During the first quarter, we reported income from operations of $3.6 million and operating margins of 5.3%. This compares with an operating loss of $2.4 million in the year ago quarter. This year-over-year improvement was due to higher sales combined with ongoing cost efficiency initiatives, which provided greater operating leverage. Net loss for the quarter was $3.1 million or $0.28 per diluted share, which compares with a net loss of $5.7 million or $0.51 per diluted share in the first quarter of 2018. First quarter adjusted EBITDA was $8 million, up 101% from the $4 million we reported in the first quarter of 2018. Our improved adjusted EBITDA performance was driven by our focus on growing our top line, a more favorable sales mix and our ongoing cost efficiency initiatives, as I discussed previously. Turning to slide 10. As a matter of housekeeping, beginning…

Thanks, John. We delivered solid first quarter results and have performed well relative to our plan during the first quarter which underscores our confidence in our strategy and our ability to deliver results. I look forward to updating you on our progress. Operator, you may now end the call.

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