CompoSecure, Inc.

where we will review Composecure's third quarter 2025 financial results and discuss the planned business combination with Husky Technologies. With me on the call is Dave Cody, Executive Chairman of Composecure, Tom Knott, Chief Investment Officer of Composecure, John Wilk, Chief Executive Officer, Tim Fitzsimmons, our retiring CFO, and Mary Holt, Incoming Chief Financial Officer. We will begin with prepared remarks and then 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 about our growth strategy, customer demand, our ability to maintain existing and acquire new customers, implementation of the Compass Care Operating Systems, and our guidance for 25 and 26, as well as other statements regarding plans and prospects. 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 and on the SEC's website at sec.gov. Please note that effective as of February 28, 2025, the date of the spinoff of Resolute Holdings Management, Inc., and as a result of the management agreement between Resolute Holdings Management, Inc. and the company's wholly owned subsidiary, Compass Secure Holdings, the results of operations of Compass Secure Holdings and the operating companies which are its subsidiaries are not consolidated in the financial statements included in this report and instead are accounted for under the equity method of accounting. In the earnings release we issued earlier today and the discussion of today's call, we also present non-GAAP financial measures to help investors better understand our operating performance. 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 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 gap to non-gap measures is available in our press release and earnings presentation available in the IR section of our website. Thank you. And with that said, let me turn the call over to Executive Chairman Dave Cody.

Well, what a wicked great day we have to celebrate today. We have good news busting out all over. So before I get into Compost Secure's third quarter, I want to begin with a few remarks about my excitement regarding the Husky transaction. When my family invested in Compost Secure over a year ago, a big part of the value creation plan was to implement our operating system to catalyze organic growth, improve margins, and build a rigorous discipline around capital allocation to pursue accretive inorganic growth. While still early, we're delivering strong organic growth and improved profitability at Compost Secure. The third quarter results are terrific. Over the past year, we've been actively looking for another great business that could benefit from our operating system and shares the same foundational characteristics we look for at Honeywell, Vertiv, and Compose Secure. I am delighted to report that we have found all that and more in Husky. We view the combination of Compose Secure and Husky as the foundation for a best-in-class diversified compounder. Compose Secure is the global leader in manufacturing premium metal payment cards and authentication solutions. Husky is the global leader in highly engineered injection molding equipment and aftermarket services. Collectively, they form a platform positioned to become the home for market-leading businesses that operate in attractive industries, generate recurring revenues, deliver high growth and profitability, achieve attractive returns on incremental invested capital, and offer significant opportunities for long-term value creation. Husky checks every box of our investment criteria. It has a great position in a good industry. It differentiates with technology, and it presents substantial upside potential in both organic and inorganic growth, along with clear opportunities for margin expansion. Coupled with an ability to generate strong free cash flow and a healthy proforma balance sheet that will deliver quickly, we find this to be an incredibly compelling opportunity for CompostSecure investors as we expand the operating platform. Tom and I will provide further details on the transaction and the business after we cover CompostSecure's third quarter results. Turning to CompostSecure, a year after our investment, It is gratifying to see the progress we've made. We have accelerated organic growth, strengthened our operating discipline, and begun to realize the benefits of cultivating a high-performance culture. Our strategic initiatives, underpinned by the Compo Secure Operating System, or COS, are yielding results, and the business is consistently performing at a much higher level. The nice thing about all this is that it is just the beginning. with tremendous opportunity ahead to further drive investor value creation. Significant opportunities remain for CompostSecure to unlock faster organic growth while continuing to drive meaningful operational efficiencies across the business. The combination with Husky diversifies CompostSecure's business and adds multiple levers of future value creation. Our focus will remain on disciplined execution, innovation, and maintaining the momentum that's driving our success. And we will continue making strategic investments necessary to fully capitalize on the opportunities to deliver long-term value for all our investors. With that, I'll turn the call over to John.

Thanks, Dave. Good morning, everyone, and thank you for joining us for our third quarter conference call. Before we go through the Q3 results, I want to take a moment to publicly recognize Tim Fitzsimmons and his work as our CFO over the past 13 years. As announced in June, Tim is retiring, and I want to extend my deepest thanks for all his contributions and wish him well in his retirement. He has set a strong financial foundation for the company that we will benefit from for years to come. After an extensive search, I am thrilled to welcome Mary Holt, our incoming CFO, who joins us on the call today. Mary brings a wealth of experience and knowledge from world-class organizations such as Honeywell and Pfizer, and we are confident her background, financial acumen, proven leadership, and experience with lean management operating systems will be powerful additions to our business. and will play a key role in helping us advance our strategic initiatives. Now, moving to slide three. As we mentioned last quarter, our results are being reported using equity method accounting following the completed spinoff of Resolute Holdings Management earlier this year. On this call, we will refer to non-GAAP measures for net sales, gross profit, and related operating measures. With that, let's review the quarter. Net sales increased 13% year-over-year to $120.9 million, driven by disciplined execution, operational focus, and continued support from Dave and the Board for our strategic initiatives. Pro forma adjusted EBITDA increased 30% to $47.7 million, with an EBITDA margin of 39.5%. Implementation of the Composecure operating system is clearly having a strong impact as we achieved gross margins of 59% for the quarter compared to 51.7% for the same quarter prior year. We also saw numerous customer program launches during the quarter, which I'll comment on momentarily. And Arculus delivered another strong net positive quarter supported by expanding commercial activity. We continue to see traction with banks, fintechs, and exchanges who are launching innovative card programs and seeking enhanced security features. With sales momentum building and operating efficiency improving, we are raising our 2025 outlook and introducing strong guidance for 2026. For fiscal year 2025, we are raising our full year guidance and now expect non-GAAP net sales of approximately 463 million and pro forma adjusted EBITDA of approximately 165 to 170 million. We are also announcing financial guidance for 2026, where we expect non-GAAP net sales of approximately 510 million and non-GAAP pro forma adjusted EBITDA of approximately 190 million. Turning to slide four, we shared a version of this slide last quarter, but it's worth a quick refresher for those new to the company since our reporting structure is rather nuanced. When evaluating Composecure's performance, we suggest focusing on core operating results after deducting the management fee paid to RHLD. In turn, RHLD's results primarily reflect the same management fee income net of its own operating expenses. Demand for our metal card products remains strong and is supported by ongoing trends we see in the market as outlined on page seven. We also continue to make operational progress highlighted on the right side of the slide and we are seeing sustained improvements in the business from the Compose Secure operating system, including tangible benefits materializing on the top and bottom line, as well as strong gross margin improvements. Turning to slide six, we continue to see strong activity from both existing customers and new entrants, with several new and expanded programs launching in the quarter, such as City Strata Elite, Chime, a Bank of America, America Airlines co-brand, Alaska Airlines co-brand, Bank of Montreal, and Gemini XRP. These programs reinforce the strength of our partnerships and the value we bring to issuers seeking to enhance their brand loyalty and deliver improved returns through higher customer acquisition, spending, and retention. With that, I'll pass it to Tim for a few remarks.