CPI Card Group Inc.

after the company's remarks. If you would like to get in the queue for questions, please press star one on your telephone keypad. Now I would like to turn the call over to Mike Salep, CPI's head of investor relations.

Thanks, operator. Welcome to the CPI Card Group third quarter 2024 earnings webcast and conference call. Today's date is November 5th, 2024. And on the call today from CPI Card Group are John Lowe, president and chief executive officer, and Jeff Hochstadt, 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 discussion of such risks and uncertainties, please see CPI Card Group's most recent filings with the FCC. 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, net leverage ratio, and free cash flow. Reconciliations of these non-GAAP financial measures, the most directly comparable GAAP measures, are included in the press release and slide presentation we issued this morning. 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 10Q for the quarter ended September 30th, 2024 will be available on CPI's investor relations website. On today's call, all growth rates refer to comparisons with the prior year period unless otherwise noted. The agenda for today's call is on slide three. John will give a brief overview of the third quarter and our strategies, and Jeff will provide more detail on the results and our financial outlook, and then we'll open the call for questions. And now we can move to slide four, and I'll turn the call over to John.

Thanks, Mike, and good morning, everyone. We're excited to share our strong third quarter results and increased outlook this morning. We delivered the second largest sales quarter in the company's history and generated nearly 20% growth in both net sales and adjusted EBITDA. We also continue to make advances with our adjacent market strategies and are seeing growing interest in our expanding set of digital solutions. As we highlighted at the beginning of the year, We expected the first half to be challenging as channel inventories continue to be worked down and expected to see good growth in the second half, and the third quarter reflects that. Net sales increased 18% in the quarter, with product sales, which primarily represent debit and credit cards, growing 25%, led by strong sales of eco-focused contactless cards. While channel inventory levels are still elevated, they are improving, and we believe we are winning business in the market. In addition to our card performance, We continue to grow our card at once instant issuance solutions and our personalization businesses, and our prepaid business remains strong, delivering 13% growth in the quarter. We also made great progress improving our profitability, with gross margins increasing 170 basis points compared to prior year, and adjusted EBITDA increasing 18%. And we completed some significant financing and capital strategy items, issuing new senior notes extending maturities out to 2029, and supporting a secondary offering by our majority stockholder group, which should aid trading liquidity for our stock over time. Based on our results and current expectations for the fourth quarter, we have updated our full-year outlook for 2024, increasing our net sales range due to strength across our portfolio, and also increasing our adjusted EBITDA and cash flow expectations. Jeff will provide you with more detail on our results and outlook in a few minutes, but I will first review our strategic progress on slide five. Our strategies remain focused on the customer, innovation, and high quality to grow and gain share in our traditional businesses, while enhancing growth by expanding into adjacent markets, including digital solutions, over the long term. One innovation example is our recently announced ability to produce cards with a new advanced contactless chip that integrates the antenna within the chip itself. This feature allows for more flexibility on card design, and reduces carbon footprint as it eliminates the need for separate layers within the card for the antenna. Although there are generally long adoption cycles for changes in chip technology, we are now ready to initiate pilots with customers, positioning CPI as a potential early adopter of an important new technology. In addition to driving growth in our traditional core businesses, we are advancing our efforts to capitalize on new opportunities by and markets including offering more products and digital solutions to existing customers and expanding to new customer verticals. During the quarter, we announced another digital solution offering when we signed an agreement with RippleShot to offer their fraud prevention tools to our customer base. RippleShot's tools generate predictive analytics, leveraging data from thousands of financial institutions, generating millions of transactions each day. We believe these tools will help our small and medium-sized financial institution customers reduce losses by identifying fraud patterns to block attacks before they strike, detecting compromised merchants and high-risk cars. In addition to this offering, we also continue to see growing interest in our broader digital solutions, including push provisioning. These are just a few examples of our progress, and we believe these opportunities will supplement our growth over the coming years. Turning to slide six, We continue to expect our core markets to provide solid long-term growth. On this slide, you can see the latest U.S. cards in circulation trends from Visa and MasterCard. For the three years ending June 30th, cards in circulation in the U.S. increased at a 9% CAGR, and reports from large issuers also indicate a healthy card market. As an example, JPMorgan Chase reported an 11% year-over-year increase in cards outstanding, and Bank of America noted the addition of 1 million credit card accounts. Though issuance trends are strong, channel inventory is being worked down, and we believe we can continue to win in the marketplace with both our traditional businesses and as we expand into adjacent markets, including digital solutions. I would like to now turn the call over to Jeff to discuss our third quarter financial results and 2024 outlook in more detail. Jeff?