American Vanguard Corporation

Welcome to the American Vanguard second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Bobby Winters, Director of Investor Relations. You may begin.

Thank you, operator. Good afternoon, and welcome to American Vanguard's second quarter 2026 earnings review conference call. Our prepared remarks will be led by Dak Kaye, chief executive officer, and David Johnson, chief financial officer. After their prepared remarks, we will open up the call for questions. A copy of today's press release, along with supplemental slides, are available on our website. A replay of the webcast and a transcript from this event will be made available on our website shortly after the call. Before we begin our presentation, we would like to remind everyone that today's press release and certain comments on the call include non-GAAP figures and forward-looking statements. And actual results may differ materially from these forecasts. Please refer to the cautionary language in our press release and slides and to the risk factors described in our SEC filings, all of which are available on our website. It's now my pleasure to turn the call over to CEO Dak Kaye.

Thank you, Bobby, and welcome everyone to our second quarter 2026 earnings conference call. Results for the quarter and the first half of this year reflect ongoing and dynamic cross-currents affecting our agricultural markets and customers around the world. But more importantly, The progress we are making on lowering cost and driving commercial improvement regardless of the environment. I want to make three major points today. First, despite these difficult market conditions, we are outperforming our peers in the US markets. Second, with the implementation of our business improvement plans, we are gaining greater operating leverage. Third, Our investment in new product development is paving the way for future growth and profitability. In our initiative to reorganize, refocus, and invigorate the commercial effort across the company, we are making good progress so far. The results for the first half of 2026 have laid the foundation for opportunities that we believe are both ahead of us and in our control. Before covering our performance, let's turn to market conditions. The crop protection market in the U.S. continued to be difficult in the second quarter due to continued pressure on the farm economy coming from multiple directions, including the sustained high cost of capital coupled with increased fuel and fertilizer costs arising from the ongoing conflict in the Middle East. Distributors, retailers, and growers have continued to be conservative in their buying practices, ordering on an as-needed basis and even then deferring purchases from month to month when they can, which is shifting order patterns somewhat across our businesses, both domestically and internationally. I think it's also worth noting that some underlying structural and behavioral shifts in consumption patterns are impacting agricultural markets, including the multi-year decline in overall alcohol consumption, as well as the rapid uptake of GLP-1 drug usage and the effect this is having on consumer eating habits. Outside of the US, across our international markets, it's been a much more challenging environment. Due to adverse weather conditions, in particular, a super El Nino, plus inflationary pressure and higher raw material prices. As with our U.S. markets and customers, our focus and efforts right now are to increase customer engagement and drive service and attention to our customers, while at the same time accelerating new product development and introduction, always striving to be a solutions provider for our customers wherever we meet them. Now let's turn to our first major point, that we are outperforming our peers in our combined US markets. While quarterly net sales declined approximately 10% versus the year-ago period, this was primarily driven by weaker international sales, which were down 18% for the quarter. We did see a decline in US crop sales for the quarter, but this was more than offset by continued strength and growth in our specialty businesses Where sales were up 11% for the quarter on a year-over-year basis. For the quarter, U.S. crop sales were impacted by timing of product sales within our cotton product portfolio, with some sales shifting to third quarter of this year. Herbicide sales were strong in both the first and second quarters, primarily due to our brand's impact and invoke. as we continue to test the elasticity of our portfolio to drive gross profit dollars and increase manufacturing efficiencies. In short, we continue to see consistent demand for our domestic products, which constitute our highest margin offerings. For the first half of 2026, revenue was mostly flat on a year-over-year basis, but U.S. sales were up 6%, with U.S. crop up 5% year over year and specialty sales up 10%. The strength and outperformance we've been able to drive so far in 2026 was mostly offset by the weaker global environment with international sales down 13% for the first half of 2026. Turning now to our second major point, improved operating leverage. While gross profit margins were down year over year for the quarter due to lower volumes and the timing of customer shipments. Gross profit margins improved by 100 basis points in the first half of 2026 from 29% to 30% on modestly lower revenue. Notably higher freight costs were a significant cost to Edwin for the quarter and year to date as we estimate that this held back margins by 2.5%. Thank you. Thank you. Thank you. Thank you. across the organization. Importantly, a number of actions taken in the first half of 2026, including the LA plant rationalization and headquarter relocation, will translate into lower costs in the second half of this year. We also expect transformation costs to be further reduced. As a reminder, we expect the rationalization of the LA production facility to save us at least $4 million on an annualized basis going forward. In short, we are keeping expenses in check and managing those things that are within our control, notwithstanding changes in market conditions. Let's turn now to our third point, paving the way for improved growth and profitability through new product development. I was very pleased to be able to further strengthen our leadership team and commercial efforts here Early in the third quarter with the addition of Herman Castro, who joined us early in July as Senior Vice President of Marketing and Business Development. Herman is a proven leader and performer in our industry, particularly when it comes to new product development and innovation. Additionally, we continue to invest in future growth as R&D investment was up 12% year over year. As I've mentioned before, We have set a goal going forward of having 50 new product launches over the next five years, driving $100 million in annualized revenue by 2030. Herman will play an important role in driving the success of this initiative. At this point, I'll pause in my remarks and turn the call over to our CFO, David Johnson, who will review our financial results for the quarter in greater detail. After his review, I will return with our thoughts on the outlook for 2026 and our growth trajectory over the next two years. David.