CompoSecure, Inc.

Thank you for standing by, and welcome to Compose Secure's second quarter 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. To remove yourself from the question queue, please press star 1-1 again. I would now like to hand the call over to Sean Mansouri, Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us to review Compose Secure's second quarter 2023 financial results. With me on the call is John Wilk, Compose Secure's CEO, and Tim Fitzsimmons, CFO. They will begin with prepared remarks, and then we will open the call for Q&A. During the call, we will make statements related to our business that may be considered forward-looking, including statements concerning our plans to execute on our growth strategy and our ability to maintain existing and acquire new customers, as well as other statements regarding our plans and prospects. Forward-looking statements may often be identified with words such as, we expect, we anticipate, or upcoming. These statements reflect our views only as of today and should not be considered our views as of any subsequent date. We undertake no obligation to update or revise these forward-looking statements. Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to the information in our annual report on Form 10-K and other reports filed with the SEC, which are available on the investor relations section of our website at compostsecure.com and on the SEC's website at sec.gov. Please note that the discussion on today's call includes certain non-GAAP financial measures including adjusted EBITDA, adjusted net income, and adjusted EPS. The company believes these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends impacting the company's financial condition and results of operations. These non-GAAP financial measures should not be considered as an alternative to net income or any other performance measures derived in accordance with U.S. GAAP and may be different from similarly titled non-GAAP measures used by other companies. A reconciliation of GAAP to non-GAAP measures is available in our press release and earnings presentation available on the investor relations section of our website. Thank you. And with that, let me turn the call over to Sean to discuss our second quarter results.

Thank you, Sean. Good afternoon, everyone, and thank you for joining us for our second quarter conference call. As you hopefully read from our 8K filed this afternoon, I'm excited to announce a five-year contract extension with one of our largest customers through December 2028 as their exclusive provider of metal cards. This comes on the heels of the extension with American Express we announced last quarter, which means we have now secured long-term renewals with our two largest customers. Throughout our 20 year history, our company has been driven by delivering unmatched value and business impact for our clients, as well as innovation, all while establishing long-term partnerships across the market. And I'm proud that we continue to demonstrate that unique value proposition. Now to summarize the quarter on page three, Our second quarter results once again reflected the performance and consistency of our business as net sales for the quarter increased 1% to 98.5 million, driven by strong domestic growth of 11%, which was offset by lower international sales, which Tim will cover in a bit more detail. On a year-to-date basis, net sales are up 7% to 194 million. Looking at card issuer trends, our customers continue to report strong growth and have a positive outlook while maintaining their investment in customer acquisition and rewards despite the macroeconomic uncertainty. During the quarter, we continue to position our payment card and Arculus product offerings for growth, including expanding our sales team continuing trade show and partnership opportunities, and executing our B2B marketing strategy. And finally, we are reaffirming our guidance for 2023, which calls for net sales to range between 400 and 425 million, with adjusted EBITDA ranging between 145 and 155 million. I'd like to take a minute and cover some of the other highlights for the quarter, turning to slide four. In addition to the contract extension, which I previously talked about, we've launched several new metal card programs with top issuers this quarter. To highlight a few, with Citizens Bank, we're helping to deliver an innovative metal card design that integrates a touch card feature from MasterCard to help partially sighted or blind people easily distinguish their payment cards from one another. We also launched with Barclays in the UK, which is one of the biggest four banks in that market and overall one of the largest markets in Europe. In addition, we launched with Mars, a fintech based in Turkey, which is now offering a premium metal MasterCard. From a marketing perspective, we had a strong presence at events and trade shows, and we'll continue to ramp that activity as we go through the year, both domestically and internationally. These efforts have helped increase our pipeline for both payment card and Arculus opportunities. I'm also excited to see industry recognition for our company, our product offerings, and our leadership team that we highlighted on page four as well. Moving on to slide five, which provides insight from issuers and payment networks, as you can see from these call-outs, Amex continues to expect double-digit revenue growth and even greater EPS growth. Capital One emphasized continued marketing spend on their domestic card business, and Visa believes that growth in payment volumes around the world will remain stable. These comments show confidence in the market for payment cards and we believe we're well positioned to benefit as a market leader in metal cards. Turning to the growing opportunity for secure authentication on slide six, our lives have become highly digital and reliance on passwords is becoming more worrisome. I've spoken to this on previous calls and this issue This is an issue that consumers are beginning to recognize as well. On the left-hand side, you'll see that many consumers are looking to transition from passwords with 68% willing to use non-password login methods. And on the right side, a recent study shows that consumers want better methods that provide more visible security. That really connects well to our Arculus offerings on slide seven. and what we can provide for our B2B customers by combining Arculus authentication and or cold storage with a payment card. I am pleased with our progress against the Arculus roadmap. We continue to add to our sales team and bolster our Arculus B2B marketing efforts. And we've added new B2B customers this quarter, including Plug Wallet, an online crypto wallet, and Radix DeFi, a decentralized network. I'll now hand it over to Tim to review our financials before returning for closing remarks.