Good morning, and welcome to the CPI Card Group Second Quarter and First-Half 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Scott Scheirman, Chief Executive Officer. Please go ahead.

Thanks, operator, and good morning, everyone. Welcome to the CPI Card Group Second Quarter and First-Half 2019 Earnings Webcast and 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, adjusted EBITDA margin, adjusted free cash flow, income from operations, excluding litigation settlement gain, and operating margin, excluding litigation settlement, 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 in the slide presentation we issued this morning. Please be advised that the financial results discussed on the call today reflect the 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 U.S. GAAP. The disposition of the CPI Canada business closed on April 1, 2019, and does not qualify as a discontinued operation in accordance with U.S. GAAP. Results for the Canada business through the date of disposition as well as disposition related costs are reflected in the other segment. Copies of today’s press release as well as the presentation that accompanies this conference call are accessible on CPI’s Investor Relations website, investor.cpicardgroup.com. In addition, CPI’s Form 10-Q for the quarter and six months ended June 30, 2019 was filed with the SEC earlier today and is also available on CPI’s Investor Relations website. 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. Our second quarter results reflect solid execution against our customer -centric strategy. During the quarter, we delivered a 9% year-over-year increase in net sales, resulting in first-half 2019 net sales increase of 15% over the prior year. Turning to our segments. In the second quarter, we delivered a 17% increase in net sales from our U.S. Debit and Credit segment through continued volume increases and the more favorable mix of products and services. Net sales from our Prepaid Debit segment was up 3%, outperforming our strong 2018 second quarter results, which, as you recall, included significant net sales associated with the new portfolio launch. During the second quarter, we generated net income of $1.6 million, or $0.14 per share, inclusive of a $6 million cash gain related to a settlement of a previously disclosed litigation. This brings the year-to-date bottom line to a net loss of $1.5 million. Adjusted EBITDA, which excludes the $6 million cash gain was $8.5 million for the second quarter, bringing our year-to-date total to $16.5 million, a year-over-year increase of 28%. We believe the top line and bottom line momentum we have been experienced thus far in 2019 puts us on track to achieve the goals we set out for ourselves this year. Turning to Slide 5. We continue to execute 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 will take a few moments to update you on our progress against these priorities and highlight some initiatives we have delivered on during the first-half of this year. Beginning with our first priority, deep…

Thanks, Scott, and good morning, everyone. I will begin my overview of our results from the second quarter and first-half of 2019 on Slide 9. As a reminder, 2018 comparative results 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 U.S. GAAP. The disposition of our Canadian business, which closed April 1, 2019 did not qualify as a discontinued operation under U.S. GAAP. And therefore, the results from this business are included in the Other segments. Second quarter net sales increased 9% compared with the second quarter of 2018, driven by 17% increase in net sales from our U.S. Debit and Credit segment and 3% net sales growth from our U.S. Prepaid Debit segment. These quarterly gains were partially offset by a $2.4 million year-over-year decrease in Canada sales due to the recent disposition, net of the Canadian secure card business that migrated to our U.S. operations. For the first-half of 2019, net sales were $133.8 million, up 15%. over the same period in 2018. Second quarter gross profit was $22.4 million, up 13% over the second quarter of last year. Gross margins for the second quarter increased 120 basis points year-over-year to 33.5%, our fourth consecutive quarter of improved year-over-year gross margins. Looking year-to-date, we generated gross profit of $43.9 million, up 28% from the first-half of 2018. On a year-to-date basis, we expanded gross margins by 330 basis points year-over-year. This gross margin growth was due to higher net sales, which led to more favorable cost absorption and a reduction in expenses resulting from last year’s consolidation of our personalization operations. This growth was partially offset by higher card manufacturing materials costs, driven primarily by a mix of certain products. During the…

Thanks, John. We are pleased with our business performance in the first-half of 2019, and we believe that we are well-positioned to deliver on our strategies and 2019 goals as we enter the second-half of the year. 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.