Financial Data and Key Metrics Changes - Reported net sales increased by 9% in Q2 2025 to $129.8 million, or 15% excluding the impact of a one-time noncash accounting change [18][20] - Adjusted EBITDA increased by 3% to $22.5 million, despite lower gross margins [25] - Net income decreased by 91% in the quarter, impacted by acquisition costs and accounting changes [25] Business Line Data and Key Metrics Changes - SecureCard business delivered volume and sales growth greater than 15% in the first half [7] - CardOnce instant issuance solution grew more than 20% in the first half, expanding to over 17,000 locations [7] - Open loop prepaid business sales increased by 17%, driven by packaging solutions and diversification into healthcare payment offerings [8] Market Data and Key Metrics Changes - The debit and credit segment saw a 16% increase in sales, while the prepaid segment experienced a 19% decrease [21] - Excluding the accounting change, prepaid net sales increased by 4% while debit and credit sales increased by 18% [22] Company Strategy and Development Direction - The company aims to be the most trusted partner for innovative payment technology solutions, focusing on customer service, quality, efficiency, innovation, and diversification [9] - The AeroEye acquisition is expected to create synergies and expand market access, particularly in the prepaid debit payment card market [10][11] - Investments are being made in automation and new facilities to enhance production efficiency and capacity [15] Management's Comments on Operating Environment and Future Outlook - The company anticipates challenges from unexpected tariffs, estimating a $5 million impact for 2025 [16][23] - Despite these challenges, the company has increased its sales outlook for the year, including contributions from AeroEye [17] - The management remains confident in the strategy and growth opportunities, expecting improvements as new facilities become operational [24][32] Other Important Information - The company generated $9.9 million in cash from operating activities in the first half, an increase from $4.1 million in the prior year [28] - The net leverage ratio at quarter end was 3.6 times, up from 3.1 times due to the acquisition funding [30] Q&A Session Summary Question: Insights on ROI acquisition performance and larger orders - The ROI acquisition has exceeded expectations with nearly $10 million in revenue in less than two months, but immediate large orders are not yet evident [38][41] Question: Synergies from chip procurement with ROI - The company plans to leverage its stronger purchasing power for chips, which could free up cash flows in the future [42][43] Question: Impact of accounting changes on ROI contribution - The ROI contribution is still small relative to overall revenue, but its profitability has been beneficial [48][49] Question: Opportunities in government programs with CardOnce - The company is expanding into government disbursement programs, which are expected to provide recurring revenue opportunities [50][52] Question: Metal card market growth - The company is positioned to meet the demand for metal cards, which is a growing but still small segment of the overall market [55][56] Question: Mitigation strategies for potential chip tariffs - The company has ample chip inventory and is prepared to manage through potential tariff impacts [59][62]