American Vanguard Corporation

Greetings and welcome to the American Vanguard second quarter 2020 conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host today, Bill Koozer, Director of Investor Relations. Thank you. You may begin.

Well, thank you very much, Latanya. Welcome, everyone, to American Vanguard's second quarter and mid-year earnings review. Speakers today will be Mr. Eric Wintemuth, the chairman and CEO of American Vanguard, and also Mr. David Johnson, the company's chief financial officer. Also assisting in answering any of your questions, Mr. Bob Tregell, the company's chief operating officer. American Vanguard will file our Form 10-Q with the SEC tomorrow. This document provides additional detail to the results that we will be discussing in this call. Before beginning, we should take our moment for a usual cautionary reminder. In today's call, the company may discuss forward-looking information. Such information and statements are based on estimates and assumptions by the company's management and are subject to various risks and uncertainties. that may cause actual results to differ from management's current expectations. Such factors can include weather conditions, changes in regulatory policy, competitive pressures, and various other risks that are detailed in the company's SEC reports and filings. All forward-looking statements represent the company's best judgment as of the date of this call, and such information will not necessarily be updated by the company. With that said, we turn the call over to Eric.

Thank you, Bill. Good afternoon, everyone. We appreciate your continued support of American Vanguard. In our last call, we gave you our first impression of the coronavirus pandemic, which had begun its spread into the United States partway through the first quarter. As part of the critical infrastructure, we were permitted, indeed expected, to continue operating in the midst of a global pandemic, the likes of which we had not seen in over a century. In order to operate without disruption during the first quarter, we had to adapt. Where we could do so, we shifted from in-person to remote work, where we had to maintain physical operations as in our factories We implemented COVID protocols to keep the workplace safe and healthy. At the same time, we learned to do business remotely while constantly checking on supply chain stability, logistics, and customer demand. Fast forward to the second quarter, the pandemic has become the norm. We and our suppliers, peers, and customers have become more accustomed to doing business through Zoom meetings, webinars, and email. We continue our efforts to ensure that internal communication was frequent and continuous. In fact, I continue to hold weekly two-hour State of the Company calls with over 40 of my key managers, during which I solicit input on operational challenges, sales opportunities, and regional development to ensure that we're all moving in the same direction. In addition, on a daily basis, our pandemic working group advises the workplace regarding COVID related news, government orders, research, and company protocols. During the second quarter, the pandemic shifted from Asia and Europe into the Americas, where we do most of our business. In spite of that shift, I am pleased to report that we have had a very low incident of coronavirus infection within our workforce, that nearly all of the cases were community transmissions outside of our facilities, and that our operations have not been adversely affected by the pandemic to date. In that vein, I would like to thank all of our employees for taking to heart our commitment to keeping the workplace safe and healthy. At this point, I want to pause to note that given the circumstances where so many businesses are struggling for survival, cutting workforces, taking federal loans, or filing for reorganization, we are generating stronger returns than what we did while operating in the normal course last year at this time. Specifically, even while quarterly net sales declined by 8%, net income increased by 25% over the period. As we will explain over the course of this call, we focused our efforts on the sale of higher margin products in domestic markets, factory performance, strict management of operating expenses, and working capital utilization. At the same time, and I hate to steal David's thunder here, as of June 30th, we have strengthened our balance sheet by reducing inventory, even with expanded product offerings, reducing debt, and improving cash from operations by $38 million so far this year. Before turning the call over to David, let me take a moment to focus on the future. We are still constrained from making specific forecasts because we do not yet know how long the pandemic will last, nor how it may affect our business or markets. Nevertheless, we have adapted to the coronavirus with increasing success. As we look forward to the balance of the year, we continue to believe that we are poised to perform in line with our peers. This is so for a number of reasons, including favorable conditions for our mosquito control products, larger supply of crowbar and highbar herbicides for use on citrus, pineapple, and agave, and expansion of our VAPEM fumigant business in Mexico, Central America, and Australia. With that, let me turn the call over to David, who will give you further detail on our P&L and balance sheet. I will then return to give you an update on some exciting initiatives to grow our business through new products and technology innovation. David? Thank you, Eric.