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Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Ladies and gentlemen, thank you for standing by. Good day and welcome to the WD-40 Company Second Quarter Fiscal Year 2026 Earnings Conference Call. Today's call is being recorded. At this time, all participants are in a listen-only mode. At the end of the prepared remarks, we will conduct a question-and-answer session. To register a question at any time during this call, please press star one on your telephone keypad. Please make sure your mute function is turned off to allow your signal to reach our equipment. If at any during the conference, you need to reach an operator, please press stars zero on your phone keypad, I would now like to turn the presentation over to the host for today's call, Wendy Kelly, vice president stakeholder and investor engagement please proceed thank you good afternoon and thanks to everyone for joining us today on our call today are wd-40 companies president and chief executive officer steve brass and vice president and Chief Financial Officer Sarah Heiser in addition to the financial information presented on today's call we encourage investors to review our earnings presentation, earnings press release, and form 10-Q for the period ending February 28, 2026. These documents will be made available on our investor relations website at investor.wd40company.com. A replay and transcript of today's call will also be made available shortly after this call. On today's call, we will discuss certain non-GAAP measures. The descriptions and Conciliations of these non-GAAP measures are available in our SEC filings, as well as our earnings documents posted on our Investor Relations website. As a reminder, today's call includes forward-looking statements about our expectations for the company's future performance. Actual results could differ materially. The company's expectations, beliefs, and projections are expressed in good faith, but there can be no assurance that they will be achieved or accomplished. Please refer to the risk factors detailed in our SCC filings for further discussion. Finally, for anyone listening to a webcast replay or reviewing a written transcript of this call, please note that all information presented is current only as of today's date, April 9, 2026. The company disclaims any duty or obligation to update any forward-looking information as a result of new information, future events, or otherwise. With that, I'd now like to turn the call over to Steve. Thanks, Wendy, and thanks to everyone for joining us today. I'll begin with an overview of our sales performance for the second fiscal quarter of 2026, followed by an update on the progress we've made across select areas of our 4x4 strategic framework. Sarah will then walk through the details of our second quarter results, recap our business model, share a brief update on the divestiture of our home care and cleaning business, and review our guidance for fiscal 2026, and we'll conclude by taking your questions. Today, we reported consolidated net sales of $161.7 million, an increase of 11% compared to last year. Let's spend a few moments looking more closely at those results and the factors contributing to our performance. Maintenance products continue to be our core strategic focus. accounting for roughly 97% of total net sales this quarter. Net sales in this category totaled $156.8 million, reflecting a 13% increase year-over-year. On a constant currency basis, net sales in its category increased 6% year-ever-year, in line with our long-term growth expectations for maintenance products. As a reminder, we go to market through a mix of direct operations, which represent approximately 80% of global sales, and marketing distributors, which account for the remaining 20%. During the second quarter, sales and maintenance strokes in our direct market grew 14% compared to prior year. Sales through our marketing distributor network increased 9% year-on-year, proven primarily by sequential improvement across our Asia-Pacific distributor markets, as we saw the anticipated rebound following a softer first quarter. I'd also like to highlight that our gross margin remains solidly within our expected guidance range for fiscal year 26. In the second quarter, we delivered a gross margin of 55.6%, up 100 basis points year over year. On an adjusted basis excluding assets held for sale, gross margin was 56%. Now let's talk about second quarter sales results by segment, starting with the Americas. less otherwise noted, I'll discuss net sales on a reported basis compared to the second quarter of last fiscal year. Sales in the Americas, which includes the United States, Latin America and Canada, were 71.8 million in the second quarter, an increase of 10% compared to last year. Sells and maintenance products in the Americans were 69.1 million, an increase of 11% or $6.7 million compared to last year. Nearly all of that growth was driven by higher sales of maintenance products in the U.S., which increased 15% compared to the last year, while performance of W40 multi-use products in U. S. was particularly strong, increasing by $5 million or 15%. This growth was drive by higher volumes of select customers and online retailers, failures, supported by elevated promotional activity and modest price increases which we implemented earlier in fiscal year 26. We expect the strong momentum in the US to continue with numerous activities already planned for the second half of fiscal year. In the Americas, maintenance product sales also benefited from strong growth of W40 specialists which increased 17% compared to the prior year. growth is driven primarily by expanding distribution and higher online sales in the US. We saw modest sales growth in Latin America this quarter, which is largely offset by softer sales in Canada, leaving overall performance for the combined regions essentially unchanged. Home care and cleaning product sales declined 13%, reflecting our strategic shift toward higher margin maintenance products in alignment with our four by four strategic framework. In total, our America's segment made up 44% of our global business in the second quarter. With a significant number of initiatives planned in the back half of the fiscal year, our outlook for the Americas is very strong. As a result, we expect high single-digit into low double-digIT growth in the Americas this fiscal year driven primarily by strong activity in the United States. This strong top-line growth positions as well to help offset uncertainty associated with global economic and geopolitical conditions that could impact other areas of the business. Now turning to IMEA, which includes Europe, India, the Middle East, and Africa, sales of 64.9 million in the second quarter, an increase of 9% compared to last year. This increase is driven by favorable foreign currency exchange rates, as most IMEA sales are transacted in euros or pound sterling and translated into U.S. dollars for reporting purposes. On a constant currency basis, sales were down 3% year over year. We sell into IMEI through a combination of direct operations as well as through marketing distributors. Net sales in IMED direct markets, which accounted for 70% of the region's sales, increased 12% during the quarter to US$45.6 million. Given that currency translation can obscure our reported results, we believe it's helpful to also consider performance in the local currencies in which we transact sales. In local currency, we continue to see double-digit growth of WD40 multi-use products across many of our direct markets, including France, Iberia and Benelux, where sales increased 16%, 12% and 12% respectively, driven by successful promotional activities. These sales increases were entirely offset by lower volumes in our distributor markets. Net sales in RMA distributor markets, which accounted for 30% of the region's sales, increased 1% during the quarter to $19.2 million. Sales in RMI distributor markets were most notably impacted in the Middle East, reflecting the timing of customer orders following strategic distribution changes. We transitioned to a new marketing distributor partner in a key country during the first half of fiscal 26, which shifted the timing and customer orders. With the transition now complete, we expect increased activity in the second half of the fiscal year, subject to further geopolitical disruption in the region. As a reminder, we divested the UK home care and cleaning portfolio in fiscal 25, which negatively impacted second quarter sales by 1.5 million. In total, our EMEA segment made up 40% of our global business in the second quarter. As we look ahead, we expect a better second half performance in EME, we are closely monitoring the geopolitical conditions in the Middle East, sales to the region directly affected by the current geopolitical tensions represented approximately three percent of global sales in fiscal year 25. our presence in these markets is limited we have one manufacturing partner in the region but no significant operations beyond the distribution and sale of our products through third-party distributors we will continue to monitor the situation closely and assess any potential impacts of circumstances evolve despite this disruption we expect to achieve mid-single digit growth on a constant currency basis this fiscal year and reported currency based on current exchange rates we would expect growth of maintenance products in IMEA to be in the high single digits this fiscal year now on to Asia Pacific sales in Asia Pacific which includes Australia China and other countries in the Asia region were 25 million in the second quarter an increase of 19 or 1.3 million compared to last year we did benefit from favorable currency movements in Asia-Pacific, although to a lesser extent than in EMEA. On a constant currency basis, sales in the region were up 16% versus last year. Most of that growth was driven by higher sales in China, and our Asia distributor markets for sales and maintenance products increased 25% and 19% respectively compared to last year, sales of W40 multi-use product was strong across the trade bloc. In China, sales of W40 multi-use products increased by 1.1 million, or 18%, driven by higher volumes from effective promotional programs and marketing activities, as well as expanded distribution, particularly through online retailers and industrial channels. In our Asia distributor market, sales at W40 anti-use product increased by 1.3 million, of 17%, partially due to successful promotional programs, particularly in Malaysia and the Philippines. We are pleased to see a strong rebound in the Asia distributor markets as customers in the region have adjusted back to more typical inventory levels. In Australia, sales of W40 multi-use products increased 15%, driven by the timing of customer promotions and expanded distribution. In Asia Pacific, maintenance product sales also benefited from strong growth in W40 specialists, which increased by 55% compared to the prior year. sales increased most significantly in china driven by successful promotional programs along with expanded distribution particularly through online retailers and industrial channels in total our asia pacific segment made up 16 of our global business in the second quarter based on current visibility we expect this momentum to continue for the remainder of the fiscal year however like many companies remain cautious given ongoing global economic and geopolitical instability we expect asia pacific to deliver strong growth in the back half of fiscal year 26 supporting mid to high single digit growth on a reported currency basis for the fourth fiscal year now let's talk about our muslim battles a core element of our strategy is accelerating revenue growth and our maintenance products through our muslin battles starting with muslim battle number one near geographic expansion year-to-date sales of w40 multi-use products reached 245 million an increase of six percent compared to the same period last year we delivered solid performance in the americas and the mayor with sales growing seven percent and six percent respectively year-today sales in asia pacific remain flat however following the strong recovery experience in the second quarter and the momentum we expect in the first half of the year we We anticipate solid growth in the region for the full fiscal year. We continue to make excellent progress across many key markets, delivering strong year-to-date sales growth, including increases in local currency of 7% in the U.S., 4% in China, 10% in France, and 14% in Iberia. We estimate the attainable market for W40 multi-use products at about $1.9 billion, with fiscal year 25 sales of $478 million that leaves roughly $1.4 billion of long-term growth opportunity ahead of us. Next is Muslim Battle number two, Accelerating Premiumization. This is centered on accelerating growth in our premium W4D multi-use product format. Products such as SmartStraw and EasyReach are developed for the end user at the forefront of every decision. A strong focus on the end-user enhances brand loyalty, supports gross margin growth, and strengthens our competitive advantage. Year-to-date combined sales of WD40 Smart, Straw and EasyReach increased 9% compared to the prior year. Premiumised products represent approximately 50% WD 40 multi-use product sales, leading meaningful runway for continued growth. We're targeting a compound annual growth rate for premiumised product net sales of greater than 10%. Our third must-win battle is to drive W40 Specialist growth. If W40 Multi-Use Products is a Swiss Army knife of maintenance, W40 Specialist is a dedicated tool, a hammer, screwdriver, or wrench designed for specific jobs. Its focused brand extension strengthens our portfolio without diluting the iconic core. Year-to-date sales of W40 specialists were 44.9 million, up 19% compared to last year, but targeting a compound annual net sales growth rate for WD40 specialists of greater than 10%. I'm excited to share that in the second half of this fiscal year we'll launch our latest innovation within the WD 40 specialist product line, a bio-based multi-use lubricant across several European markets. Formulated with 85% bio- based ingredients, the product meets stringent environmental standards while delivering the professional grade performance our end users expect this launch reflects our commitment to practical innovation and environmental stewardship our fourth muslim battle is to turbocharge digital commerce our digital commerce strategy plays a vital role in advancing each of our muslim battles by increasing brand visibility improving accessibility and deepening end user engagement across global markets year-to-date e-commerce sales increased 23 percent driven primarily by strong momentum in the united states and china we'll now move to the second element of our four by four strategic framework our strategic enablers which focus on operational excellence today i'll provide updates on strategic enablers three and four a third strategic enabbler is operational excellence in the supply chain profitable growth requires a supply chain that's optimized high performing and resilient in the second quarter we delivered global on time in full performance of 96 percent reflecting the discipline and reliability of our operations our decentralized global supply chain is a strategic advantage enabling both resilience and agility in periods of economic and geopolitical uncertainty by limiting exposure to any single region we reduce risk across the network if a manufacturing partner is impacted by unforeseen circumstances we can quickly pivot and shift production to other partners within weeks an agility that's especially valuable in uncertain times. We spent the last three years strengthening our global supply chain, adding even more manufacturing partners, optimizing inventory and building a more agile network. We recently added a new manufacturing partner in IMEA, further diversifying our European supply chain and transitioning from a single dominant partner to multiple partners across the continent. The logistics associated with this transition resulted in a temporary inventory build in IMEA. At the same time, we also built inventory in the United States in anticipation of a strong third quarter. These higher inventory levels are beneficial as they help insulators from short-term gross margin volatility, including the impact of near-term fluctuations in crude oil prices. Based on current inventory levels, we do not expect gross margins to be significantly impacted in the third quarter which provides us time to take mitigating actions to defend gross margin as needed overall our supply chain is significantly more resilient today than it was historically these changes support gross margin expansion and help insulate the business amid ongoing global economic and geopolitical uncertainty Our fourth strategic enabler is to drive productivity through enhanced systems. At W40 Company, technology is a critical enabeler of productivity and scale. We're building a digital foundation designed to support global growth and increase operational flexibility, helping us execute our strategy faster and more effectively. We've made meaningful progress deploying proven AI-enabled platforms like Microsoft Dynamics 365, Salesforce, and Atlas for supply chain. Our goal isn't just personal efficiency, it's rethinking processes across the business. We are, where appropriate, leveraging artificial intelligence across certain parts of the business to improve efficiency and augment decision making. Our focus remains on practical, responsible applications that enhance productivity and support our teams. In addition, we continue to make progress in our enterprise resource planning or ERP implementation. In the second quarter, we went live with another phase of the rollout in Canada. The new system is now operating across a substantial portion of the business, including the U.S., our Latin America and Asian distributive markets operations, and Canada, together representing roughly half of global revenue. With that, I'll now turn the call over to Sarah. Thanks, Steve. Today, I will go over our results against our business model and discuss the key factors driving our second quarter performance i'll also provide an update on the planned divestiture of our america's home care and cleaning business along with our fiscal year 2026 guidance and the assumptions we made to provide more transparency first we were pleased with our second quarter of performance and the momentum we're seeing in the business with operating income this quarter growing at four percent over prior year on a constant currency basis as we noted last quarter we expected results to strengthen as the year progressed following a slow start and that improvement is showing up across both the top line and the bottom line as steve mentioned the expected top line strengths particularly in the u.s will help to buffer any impacts of the current geopolitical tension in the middle east and with that i will cut to the chase that we are reaffirming our full year 2026 guidance, even through all this turbulence. I'll cover our assumptions behind the guidance later in my remarks. With that as the lead, now let's take a closer look at our business model. This framework serves as a disciplined guide for how we manage and allocate resources across the business. It is anchored in three key components, gross margin, cost of doing business, and adjusted EBITDA. IN THE NEAR TO MIDTERM, WE ACTIVELY MANAGE EACH ELEMENT WITHIN DEFINED RANGES, WHICH GIVES US STRATEGIC FLEXIBILITY WHILE REMAINING ALIGNED WITH OUR LONG-TERM OBJECTIVES. BECAUSE THE MODEL IS FUNDAMENTALLY DRIVEN BY REVENUE, CHANGES IN SALES LEVELS FROM QUARTER TO QUARter CAN RESULT IN SOME VARIABILITY IN MODEL PERFORMANCE. WE WILL BEGIN WITH GROSS MARGIN performance which continues to be strong in the second quarter our gross margin was 55.6 up from 54.6 in the 2nd quarter of last year representing an improvement of 100 basis points gross margin is most significantly impacted favorably by 80 basis points from lower specialty chemical costs and 70 basis points from higher average selling prices including the impact of mix and premiumization These positive impacts to gross margin were partially offset by higher other miscellaneous input costs, primarily in IMEA, which negatively impacted our gross margin by 40 basis points. Gross margin in the Americas increased 300 basis points, rising from 50.1% to 53.1%, driven by higher average selling prices and lower specialty chemical costs. In IMEA, gross margin declined slightly by 90 basis points from 58.1% to 57.2%, reflecting higher filling and warehousing fees, partially offset by lower costs for specialty chemicals. In Asia Pacific, gross margins increased slightly by 30 basis points, from 58,4% to 58,7%, primarily due to favorable changes in sales and market mix period over period. We remain encouraged by the overall trajectory of gross margin while recognizing that the operating environment continues to present external headwinds. Subsequent to our quarter end, recent geopolitical developments in the Middle East have contributed to the increased cost of certain petroleum based specialty chemicals and other input costs, which will impact our cost of products sold. There is typically a delay of between 90 and 120 days before changes in cost of raw materials impact our cost of products sold due to production and inventory life cycles. As Steve discussed a few minutes ago, we do not expect that our gross margin will be significantly impacted until the fourth quarter of fiscal year 2026, based on current inventory levels. the duration of this conflict and its impact on our raw materials will drive our decisions around mitigation efforts which we are currently assessing for more reasons than just the impact to our business we hope this development is short-term in nature i will go over our assumptions over the price of oil when i discuss our full year 2026 guidance now turning to our cost of doing business which we define as total operating expenses adjusted for certain non-cash items cost of doing business is primarily influenced by three areas our investment in people global brand building initiatives and freight costs associated with delivering our products to customers in the second quarter our cost of Doing Business was unchanged from prior year at 38% of net sales. Investing in our future remains a top priority. While our long-term objective is to manage our cost of doing business within a 30 to 35% range, we have been making deliberate investments to support sales growth and improve operational efficiency. These investments are strengthening our foundation and positioning the business for long- term sustainable growth. In addition, we continue to work through the revenue impact associated with the fourth quarter 2025 home care and cleaning divestiture in the United Kingdom. In dollar terms, our cost of doing business increased $7 million or 13% compared to the prior year quarter. Unfavorable foreign currency exchange rates accounted for $3 million of that increase this quarter. So at a constant currency basis, the increase was 7%. The majority of the remaining increase, 2.3 million, was driven by higher employee-related expenses, including incremental headcounts to support initiatives aligned with our 4x4 strategic framework. Advertising and promotional expenses increased year over year, reflecting higher levels of promotional activity and marketing support, particularly in the Americans and IMEA. As a percentage of net sales, ANP spend was 5.5% this quarter, compared with 5.1% in the prior year. While we are currently tracking slightly below our full year guidance of approximately 6% of net sale, we have brand building initiatives planned for the remainder of the fiscal year, which we expect will bring ANP investment in line with our full-year guidance. As the business grows, we expect leverage from higher revenues to move the cost of doing business toward the target range with sales growth and cost controls serving as the main catalyst for improvements turning now to adjusted ebitda in the second quarter our adjusted ebita margin was 18 flat compared to last year adjusted eba margin is an important indicator of both profitability and operational efficiency in the nearer term we continue to believes we can return adjusted EBITDA margin to our midterm target range of 20 to 22 percent as we absorb the revenue impacts associated with the home care and cleaning divestitures. The 25 percent target at the high end of our range represents the long-term aspiration for the business. Getting there will be driven by scale, gross margin accretion, and making progress on our cost of doing business targets. Turning now to other key measures of financial performance. Let's review operating income, net income, and earnings per share for the second quarter. Operating income increased 13% to $26.3 million in the second quarter, with foreign currency being a talent for us this quarter. On a constant currency basis, operating income increased by 4%, primarily driven by higher sales and improved gross margin, partially offset by increased operating expenses net income was 20.3 million compared to 29.6 million in the prior year fiscal quarter you may recall that in the second quarter of fiscal year 2025 we recorded a non-recurring non-cash tax benefit of 11.9 million that had a significant positive impact on the results last year excluding this one-time benefit net income would have increased 2.4 million or 13 percent in the second quarter compared to the prior year diluted earnings per common share were 1.50 in the second quarter compared to 219 in the prior year diluted eps for the quarter reflects 13.5 million weighted average shares outstanding excluding the one-time tax benefit in the prior year non-gap eps would have increased 14 over the prior fiscal quarter additional details on last year's tax benefits are available in our FCC filings. Turning now to our balance sheet and capital allocation, we continue to operate from a position of financial strength with solid liquidity that supports the discipline strategy focused on long-term growth and the generation of reliable cash flow returns for our stockholders. Our capital deployment decisions continue to emphasize discipline and accretion with the objective of enhancing long- term stockholder value. Our first focus is investing back into the business through advertising and promotional activities. After investing back in organic growth opportunities, dividends remain our top capital allocation priority with an annual payout target of more than 50% of earnings. On March 16th, our board of directors approved a quarterly cash dividend of $1.02 per share. In the second quarter, we executed share repurchases, totaling approximately 38,175 shares for an aggregate cost of 8 million under our authorized program. As of quarter end, roughly 14 million remains available for repurchase with the authorization set to expire at the end of the fiscal year. Given our confidence in the strength and durability of the business, we increased the pace of repurchasers and intend to utilize the remaining authorization. Before turning to guidance, I'd like to share a brief update on the household divestiture. We continue to advance the process to sell our American home care and cleaning brands, with our investment banking partner actively engaged in discussions. While there can be no assurance that a transaction will be completed, we are encouraged by continued discussions and will provide updates as the process progresses. So let's turn to fiscal year guidance. As a reminder, we issued this year's guidance on a pro forma basis, excluding the financial impact of the home care and cleaning brands currently classified as assets held for sale. Although the timing remains uncertain, this approach is intended to provide clearer visibility into performance of the core business and limit variability associated with the transaction. While geopolitical developments in the Middle East and their potential impact on the global economy warrant caution, we are encouraged by the momentum in the business. We have clear visibility in promotional activity in the U.S. and are seeing improving momentum in both IMEA and Asia-Pacific. With a number of initiatives planned for the second half of the year, we're confident in delivering a solid full-year outcome, and so we are reaffirming our guidance today. We continue to expect net sales and constant currency to land at the mid to high end of our guidance range, reflecting the strength and visibility we have on the top line. At current exchange rates, we expect low double-digit revenue growth for the full fiscal year on a reported currency basis. However, the duration and potential impacts of ongoing geopolitical developments in the Middle East have introduced an increased level of uncertainty while we remain confident in achieving our full year guidance we now expect metrics below the top line to fall within their respective guidance ranges as opposed to tracking towards the mid to high end this guidance is based on several key assumptions including crude oil prices ranging between 95 and 115 per barrel and an average euro to us dollar exchange rate of approximately 1.15 for the back half of the year it also reflects our current view of broader macroeconomic conditions actual results may vary if these inputs differ materially from our assumptions for fiscal year 2026 we expect net sales to be between 630 and 655 million after adjusting for foreign currency impact a growth of between five and nine percent from the pro forma 2025 results in reported currency we expect revenues between 650 and 680 million using current exchange rates in the back half of the year excluding revenues from the assets held for sale gross margin is expected to be between 55 and a half and 56.5 percent advertising and promotion investment is projected to be around 6% of net sales. Operating income is expected to be between $103 and $110 million, representing growth of between 5% and 12% from the pro forma 2025 results. The provision for income tax is expected to be Between 22.5% and 23.5%. And diluted earnings per share is expected to be between 575 and 615, which is based on an estimated 13.4 million weighted average shares outstanding. This range represents growth of between 5 and 12 percent over the pro forma 2025 results. In the event we are unsuccessful in the divestiture of the America's Home Care and Cleaning Brands, our guidance would be positively impacted by approximately 12.5 million in net sales, 3.6 million in operating income, and 20 cents in diluted EPS on a full year basis. That completes the financial overview. Now, I would like to turn the call back to Steve. Thank you, Sarah. In summary, what did you hear from us on this call? You heard that in constant currency, sales and maintenance products were up 6% in the second quarter, in line with our long-term growth expectations. You heard that in reported currency, sales of W40 multi-use products were up 12% in the second quarter, with growth across all three trade blocks. You hear that in reported currency sales of maintenance products in our direct markets were up 14% in a second quarter. You have heard that all our Muslim battles are performing well and that year-to-date in reported currencies, sales of 50-40 specialists were up 19%, sales of premiumized products were up 9%, and sales in the e-commerce channel were up 23%. You heard that in the second quarter, our gross margin was 55.6% of 100 basis points in the third quarter. quarter of last year. You heard that we continue to accelerate buybacks and plan to fully utilize our remaining authorization with the objective of enhancing long-term stockholder value. You heard that our decentralized global supply chain provides resilience and agility amid economic and geopolitical uncertainty, and that recent supply chain initiatives, along with higher inventory levels, are supporting gross margin in the near term, giving us time to take mitigating actions as needed. You heardthat we have clear visibility into strong promotional activity in the U.S. in the back half of fiscal year 26, And we are seeing improving momentum across both IMEA and Asia-Pacific. You heard that while geopolitical developments in the Middle East and their potential impact on the global economy warrant caution, we're encouraged by the momentum in the business and believe this momentum will help to mitigate impacts associated with global economic and geopolitical conditions that could affect other areas of the business. And you heard that with a number of initiatives planned for the second half of the year, we're confident in delivering a solid full-year outcome, and so we are reaffirming our guidance today. Thank you for joining our call today. We'd now be pleased to answer your questions. Ladies and gentlemen, if you would like to register a question, please press star 1 on your telephone keypad. Please make sure your mute function is turned off to allow your signal to reach our equipment. If your question has been answered and you would like to withdraw your registration, please press star 1 again. One moment, please, for the first question. Our first question comes from the line of Michael Baker with DA-Davidson. Please proceed with your question. Okay, great. Thank you. and congratulations on a good quarter uh so just to make sure i i have this right in so everyone has it right uh i think there was the the changing guidance uh if there is a subtle change of guidance i guess is that after the first quarter you expected top line and margins slash profitability bottom line to be towards the mid to high end of the guided range now we have the same guided range and we expect the top line still to be mid to higher end but i think what you said is that margins and profitability now just within the range rather than specifically mid to high end. I just want to make sure that I heard that right and that's the change. And then I'll have a follow-up question. Sure, Michael. So this is good to hear from you. Yes, you understood that correctly. So we are maintaining our expectation for revenue growth in the mid to high single digits. And just given the, you know, growth, the risk right now that we see in the growth margins, and considering some of the mitigation actions, depending on how long this lingers, you know, we believe we're kind of well within the range, but we're not necessarily saying that mid to high for all of the other metrics. Got it. And so that, so again, I think you said it, but that's because now we expect oil to be, now it's based on oil to being 95 to 115, which starts to impact you in your fourth quarter. And I guess my question would be, I guess, So what was the expectation prior to, you know, the situation that's played out in the Middle East the last few months? Yeah, it's definitely, I mean, we are seeing the input costs increase since the subsequent to our quarter end. In our previous guidance, it was closer to the $65 to $85 range, and so it has moved up quite a bit. Got it. All right. So just to square it all put together, just so we all understand, it was 65 to 85. Now we expect it to be 95 to 115. We all see what's going on in oil. So that's, there is a delay, but that starts to impact you in the fourth quarter. And because of that, you know, the gross margins will be more towards the, within the range rather than the mid to high end. Just that summarized everything. So hopefully that was a very good summary. You probably said it better than I could. Okay. Got it. Awesome. Thank you. Now, with that out of the way, can I ask just about a more sort of business-related question? Remind us again why this acceleration that we're seeing in the U.S., how do you have so much visibility? What are you hearing or seeing from your, you know, your key partners in the U.S.? So, hey, Mike, this is Steve. So there's a lot going right in the U.F., and so you heard W40 Specialist is growing very, very nice in the strong little digits. E-commerce is working very, muy well for us with very strong growth in e-commerce. And then as we look, I mean, you've already seen very strong grow in the first half, but, you now, compared to what's coming in the second half of the programs beginning in Q3, We have an extremely strong, kind of unprecedented in recent history of the company outlook for the U.S. with a very, very substantial promotional program for the back half of the year. And is that increased promotions and activity in existing customers, or is it different channels? I know there's been an initiative to get more into the dollar channel or hard discounters, or is it more just within the existing channels that you're in? It's both. So the major promotions are with existing customers. We have brought on board a major new customer in the discount channel as well, which is starting to add some nice additional revenue as new distribution. Got it. Appreciate all the callers. I'll turn it over to someone else. Thank you. Thank you, sir. Your next question comes from the line of David Shakenow with William Blair, Please proceed with your question. Hi. Thanks for taking my question here. And by the way, this is David Shatner stepping in for John Anderson. Just had a question on Asia Pacific. You know, you talked about it. I think it grew or the specialists grew 55% this quarter. You hit a bit on this in the prepared remarks about promotional programs and distribution, but can you double-click into those drivers a little bit, especially on promotional programs, is there any sort of air pocket, you know, we should be considering for the region or specialists just overall in Q3? Hi. So, the increase in specialists was across the board. And so, you know, we had China, the distributors, and Australia, all delivering very strong double-digit growth. So it wasn't a particular region or a particular the channel. I'd say the underlying theme is new distribution and promotions combined, as well as continued innovation and new products across the region. And so, it's not one thing. You know, we are seeing very, very strong. I'm not sure we'll deliver 55% growth each and every quarter, but you should expect Liberty 40 specialists to continue to grow very strongly in Asia. Got it. And if you don't mind me asking one other here, just on premiumized products. So I think you said it's up to 50% now of the multi-use product sales. I think that's up from 49 last quarter, if I'm not mistaken. Quite a strong achievement. How much of the remaining 1.5, 1.4 billion growth opportunity depends on moving towards those premiumized products and premium formats and given the middle east situation given also just more broadly overall consumer sentiment has that changed kind of your outlook there on premiumized products not at all i mean our premiumized problems have consistently delivered around that nine ten percent um you know growth rate historically there's absolutely no reason why that can't continue we see that building um in the second half of the year and moving into double digits for the year And so, you know, you've got, you know, $25 million plus. We're up about a $250 million base now on premium products. And, you know, in terms of units sold globally, it's about 40% of units. So our best markets, you know, in terms of premiumization penetration are approaching 80%, including the U.S. And so we have a long, long runway for growth, several hundred million dollars of growth out of that benchmark opportunity on premium formats. Great. I'll pass it on. Thank you. Thank you Your next question comes from the line of Daniel Rizzo with Jefferies. Please proceed with your question. Hi. Thanks for taking my questions. First, with the mitigation efforts that you might have to take, when do you think – I mean, is there like a drop-dead date when that decision will have to be made? to be made? And two, as a rule of thumb, how far, how long until that kind of flows through where we notice it in the P&L? Is it the same thing as with the cost where it's, you know, 90 or six, you knows, six months, or how should we think about that? Yeah, Daniel. Hi, Steve. So, yeah, I mean, we obviously, we're not, you know, we are not rushing into things. And so, we carefully evaluate the situation. It teams is almost on a daily basis it's kind of changing um and we don't want to telegraph our kind of intentions um you know how to competition on this call in particular but so we are looking active we are working actively at mitigation both in terms of you know potential price movement um and uh for the cost saving initiatives which would mitigate this thing and we did talk to having high inventories right and so with the shift we made in emea we've built up considerable inventories and with the us with our strong promotional program for q3 we have a strong inventory basis and so that was uh either excellent strategic planning or good fortune whichever way you look at it um and so uh to cook to the chase i suppose in terms of the impact of decisions we all make today you're going to see that impact in the fourth quarter but maybe not the beginning of of the fourth quarter. And so any measures we take would begin to hit the business in the fourth quarter. With those elevated inventories, I assume that's going to have somewhat of a negative impact on working capital. I was wondering what the effect of that will be in just the dollar amount. We haven't disclosed the dollar amount. You're already starting to see some of that with the buildup of the inventory levels on our balance sheet in Q2. So some of that has already happened. And that was really to support, as Steve had mentioned, the planned back half promotions. The buildup also did occur because we actually were successful in transitioning to a new filler in Europe. And so, we did also intentionally build some inventory as we worked through that transition. And, that really happened right at the end of Q2. So, I think what we're anticipating to see is the inventory build in Q2, it'll continue to build a little bit into the third quarter, it'll start to work its way down. And then really, I think you'll see a higher AR balance at the end of Q3, which that'll get worked down before we get to the end of the fourth quarter. So there's going to be a little bit of a tail from a working capital perspective, but we have a strong balance sheet and we can afford to have some blips there if we need to. Okay, that's very helpful. And then the one thing that kind of caught my ear was the bio-based product that you're kind of introducing in Europe. It sounds interesting. One, how should we think about that ramping across the globe? Are you going to be introducing to other regions soon? How should we think about the growth over the next three years? And the second part of this question is, the bio-based product, does that use less oil? Would that be something that's a long-term mitigator of the fluctuations in oil? Is that how we should think about dat? It would seem so. Thank you for the question, Daniel. And so, the product is launching across seven or eight European countries and this uh this quarter um and so you know you always have a build time to build and we have plans to roll that out globally which will probably go into next fiscal year um and you know i i don't want to create you know crazy expectations for this this is a it's a it so it's the first iteration of our multi-use product essentially with a buyer-based format so it So it's 85% biobased formulation, which meets all of the European kind of regulations around biobase products. And yeah, so, you know, ultimately, if it's very successful, yeah, it will begin to reduce our dependence on oil going forward. And that will be a nice hedge, you now, that's going to take multiple years for that to be meaningful revenues. Got you. All right. Thank you very much. Thank you. Thank you. Thank you, Your next question comes from the line of Aaron Reed with North Coast Research. Please proceed with your question. Hi, Steve. Hi, Sarah. Thanks for the questions here. So one of the things I want to get a little more color on is, you know, we talked about it a little bit already, but given the ongoing geopolitical tension and really just the volatility across the global markets, can you give a little more color on the key assumptions underpinning your guidance and why you still believe it's achievable? Yeah, I can start that. Okay, Sarah, you go ahead, please. I can jump in, Stephen, and I'll turn it over to you to wrap up that one. So, I mean, yes, it is. The environment we're in today is definitely challenging to attempt to forecast. I think what is helping us right now is that we do have a fair amount of inventory sitting on the balance sheet, which we can phase out when we can plan out when that's going to flow through. And so if oil stays within that range that I talked about between 95 and 115, the impact to the business, and this is potentially before mitigating factors that we might implement, we're able to, within that range, I think, reasonably predict what the fourth quarter is going to look like and and you know with the third quarter in the fourth corner um you know we believe we'll be able to stay within that guidance there are some puts and takes there um you now with um access to certain markets and maybe i'll let steve talk a little bit about that that might bring it down but then there's still some upside to go after okay great and i can just add then so that yeah yeah just very strong basis in in in the US. And so I can't emphasize enough that, you know, given the volatility around how that US performance, which we've talked about could actually be into the double digits this fiscal year, which is a long time since we've achieved that in the U.S. And so that's a really positive kind of basis and that's helped mitigating. We do have some exposure in the Middle East, obviously. That's about 3% of our business. And so, yeah, that may be just a few million dollars worth of risk in the middle East terms of the actual geographic region we've had europe coming back outside of the middle east um you know we did make a change in europe in the first half of a distributor in one of our key territories and so that's coming back in we began to ship in in march again to that particular territory believe it or not um and europe sequentially in the second quarter was about 10 bigger in revenues about 55 million in local currency in euros compared to around 50 in the the first quarter in net sales. And so you did see an uptick of around 10% in absolute terms in the first quarter. In Europe, and we do expect that despite the turbulence to continue in Q3 and Q4, much stronger revenue in EMEA. And in Asia Pacific, you know, China is delivering solid double-digit growth continually and did so in the first half year. So we expect China to continue with strong double-digit growth for the year. You know, there is potentially some downside risk in Asia. You've got a little bit of contagion going on there at the moment in terms of, you know, potential kind of shutdowns of operations and kind of fuel availability. And so that is some downside risks. But we still see, you now, for the Year in Asia overall, mid- to high-single-digits growth. And so, overall, the picture is looking, you Now, reasonably bright subject, of course, to further turbulence. Okay. And that kind of leads into my next question, you know, around the performance in Asia. You know, what is driving that and how sustainable is that momentum? Yeah, so it's things I think I've just kind of spoken to. So the China piece, I mean, the China team just continuously deliver these strong results. And it's just, you know, whatever's going on in the economy, we're continually opening new points of distribution, were continually sampling and so that's driving growth in china whatever's going on with the economy um you know you've seen a strong uh the you know the asia distributors came back very strongly um in q2 and that was really just a phasing question between q4 and q1 um you know pos sales didn't really change uh between those periods it was just inventory levels and so we we you know we kind of highlighted that would improve in q 2 and it did and so that's good and we expect that to continue um and then you know australia is set up for a good you know typical kind of mid single digit growth for the year as well and so yeah we're optimistic about the outlook for asia okay um and one more question here um you know your european business has been slapped down here today you know what gives you confidence in a meaningful recovery in the second half and really what leading indicators are you looking at um that really support this and And actually, I think I got one more question after that. Okay. So, yeah, Europe, yeah. It's been flat. We're very transparent. You know, I mean, it's been, you know, kind of you make it look a little better with the currency. There's a big currency kind of benefit there. But, you Know, in volumes are kind of flat at the mid-year. And direct markets in Europe are actually up around 4% combined. And we did kind of talk about many of our markets are doing very well. We have markets, Iberia doing very well, well into double digits, France doing well, Benelux doing very, very well. And so overall direct markets are coming back. It was really just this one distributor issue, particularly in the Middle East, that undermined the kind of performance of about 3 million down versus prior year, as well as a couple of promotional phasing issues with other MDs. But really the Middle Eastern one was the big one there. And so, yeah, we see Europe coming back with stronger growth in the second half, you know, in that kind of mid-single-digit kind of level. Depending on the exchange rate, the actual exchange, that could actually get into double digits or the very kind of low-case, high single digits, we believe, for the year. Okay. That makes sense. And one last item real quick here. My associate just handed me a headline saying you missed earnings by about $0.08. But when I look at consensus, it says you beat. Are there other metrics that I, or am I misunderstanding something on this? You are not. I'm actually looking at the same headline right now, and unfortunately, I think what they pulled, based on what I can do, based upon what I kann tell, is they actually pulled the non-GAAP EPS number from Q2 last year, so they compared the $1.32, unfortunately, which then drove the headline, and then there was even a follow-on where they actually did pull the right $1.50 and then they compared it to the $1 40 and saying that the $50 fell short of the $40. So unfortunately I think they just one pulled the wrong number. Um, but yeah, it's an unfortunate situation that it hits the headline like that. Cause that's not the case this quarter. As long as I'm not misunderstanding something. Okay. Thank you. And I'm pulling my Thank you. Thank you, ladies and gentlemen, that does conclude our lot of time for questions. We thank you for your participation on today's conference call and ask that you please disconnect your line.