Caesarstone Ltd.

Greetings and welcome to the Caesarstone second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. To ask a question, you may press star then one on your touchstone phone. To withdraw your question, please press star then two. As a reminder, this conference call is being recorded. It is now my pleasure to introduce your host, Mr. Brad Cray of ICR. Please go ahead, sir.

Thank you, Operator, and good morning to everyone on the line. I am joined by Yosha Ran, Caesarstone's Chief Executive Officer, and Nahum Trost, Caesarstone's Chief Financial Officer. Certain statements in today's conference call and responses to various questions may constitute forward-looking statements. We caution you that such statements reflect only the company's current expectations and that actual events or results may differ materially. For more information, please refer to the risk factors contained in the company's most recent annual report on Form 20-S and subsequent filings with the SEC. In addition, on this call, the company will make reference to certain non-GAAP financial measures, including adjusted net income loss, adjusted net loss income per share, adjusted gross profit, adjusted EBITDA, and constant currency. The reconciliation of these non-GAAP measures to the most directly comparable GAAP measures can be found in the company's second quarter 2024 earnings release, which is posted on the company's investor relations website. On today's call, Yost will discuss our business activity and to whom we'll then cover additional details regarding financial results before we open the call for questions. Thank you, and I would now like to turn the call over to Yost. Please go ahead.

Thank you, Brad. Good day, everyone, and thank you for joining us to discuss our second quarter 2024 results. Our second quarter performance demonstrates the ongoing positive impact of our strategic restructuring initiatives. The improvement in our gross margin compared to last year is a clear indicator that our efforts to optimize our production footprint and enhance our relationships with manufacturing partners are bearing fruit and assisting us in overcoming slow market conditions across the globe. Current conditions are negatively affecting our revenues, in the territories in which we operate, primarily in the residential channel. Nevertheless, we continue to make progress on several key strategic initiatives. First, we are driving cost efficiencies across our operations. The closure of our Stott Yam and Richmond Hill facilities remain on track to deliver annual cost savings of approximately $20 million in 2024. and $30 million annually by next year compared to 2023 savings, in line with our previous expectations. Additionally, we are now sourcing over 60% of our production from our global network of manufacturing partners, driving margin improvements and allowing us to better align production to demand. Second, we continue to focus on sales and marketing, mainly on developing differentiated products to improve our sales mix and help mitigate pricing pressures. Third, we continue to strengthen our porcelain business. During July, we increased our stake in our Indian porcelain facility, Loyoli Ceramica, from 60% to 81%. This move underscores our commitment to strengthening our position in the porcelain market, which we see as a key growth driver for our business. Fourth, we are investing in R&D and innovation. We've already developed and launched a number of new zero crystalline silica product lines. We expect to more than double our zero crystalline silica offering in Australia by the end of 2024. This is particularly important as we adapt to the regulatory ban on quartz products that went into effect as of July 1st in the Australian market. Lastly, we continue to explore ways to maximize value for our non-operational assets. We recently entered into an agreement to sell 69 acres of undeveloped land at our Richmond Hill property for approximately $10 million. We expect this transaction to close by the end of Q3 2024. We continue to evaluate opportunities to monetize the remainder of the property, which consists of 51 acres of higher value developed land and buildings. We are also finalizing the subletting of available areas within the Stotja manufacturing facility. This will enable us to generate additional cash flows during 2025. In conclusion, despite the persistent macroeconomic challenges, In the global market and the specific hurdles in the residential remodeling and renovation sectors to which our business is particularly exposed, we are making significant progress in transforming our business. Through the remainder of the year, we will focus on further reducing costs to align our expenses to the current business environment. We will continue to make strategic investments and innovate to drive improved profitability and long-term growth. as the market recovers. I will now turn the call over to Nahum to review our financial results in more detail.