Dorel Industries Inc.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Durell Industries' second quarter 2026 results conference call. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question and answer session. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing star then zero. Before turning the meeting over to management, please be advised that this conference call will contain statements that are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. I would like to remind everyone that this conference call was being recorded today, August 6, 2026. I would now like to turn the call over to Martin Schwartz, President and CEO. Please go ahead.

Okay, thank you. Good morning. Thanks for joining us for Durell's second quarter earnings call for the period ended June 30th, 2026. Today, we will review our second quarter performance, provide an update on strategic actions underway across the Durell juvenile and Durell home, and discuss how these initiatives are intended to improve profitability Simplify the business and strengthen cash generation over time. With me today are Jeffrey Schwartz, CFO, and Jason Kwasnik, VP of Finance. We'll take your questions following our comments. And please note that all figures mentioned during this call are in U.S. dollars. The REL Juvenile delivered a resilient second quarter supported by strong international performance and continued momentum in its premium brand. While softer market conditions in the United States affected sales, the segment continued to improve underlying operating performance and growth across several key international markets. Ongoing investment in innovation, consumer engagement, and commercial execution continues to reinforce the REL juvenile's ability to navigate market challenges while strengthening its foundation for long-term profitable growth. As announced with our first quarter results, the REL home required a further reduction in its overhead structure. During the quarter, we advanced a new business model centered on Costco product categories. In addition, our European Furniture Distribution Company, Nadeo, will continue to supply key large retailers with select furniture SKUs. Although this transition resulted in a reduction in revenue in the quarter, We are very pleased that the Costco business performed in line with expectations and was profitable under the new operating model. As always, Jeffrey will walk you through our results, but first I want to add color to our press release of today, starting with the juvenile segment. Juvenile results included some significant year-over-year foreign currency variations. When those are excluded from the figures, the underlying earnings actually improve both in the quarter and the year to date. This was in spite of some challenges in our major U.S. market and again demonstrates the resilience of our business model. The smaller international markets continue to excel, averaging our product engine, mostly the European line, and we are winning in our smaller markets like Australia and our export markets. Maxi Cosi continues to be the growth engine that has been established in many non-European markets as a preferred choice for consumers. The quarter reflected progress in several areas that are important to our long-term strategy. Innovation, strengthening our brands, and expanding product credibility. While these highlights are not financial results in themselves, they are meaningful indicators of the underlying health of the business. We saw encouraging momentum across several of our key brands during the quarter. At the ABC Kids Expo in Las Vegas, Xarel Juvenile USA showcased innovation and upcoming product launches across Maxi Cosi, Safety First, Little Seeds, and Tiny Loves. This event provided an important opportunity to engage customers and partners, present new category initiatives, and reinforce them Relevance of our portfolio in the juvenile products market. External recognition also reinforced the strength of our product offering. Safety First received recognition for home safety and connected nursery products, including the 80-piece baby proofing kit and the smart humidifier. Moxie Cozy also received recognition for its embraced forms crib and dresser, supporting the brand's expansion into the nursery category.

Our focus remains clear.