this event is being recorded. I would now like to turn the conference over to your host, Brad Cray of Thank you, operator, and good morning to everyone on the line.

I am joined by Yodh Sharan, Caesarstone's Chief Executive Officer, and Nahun 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-F 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 loss, income, 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, 2026, earnings release, which is posted on the company's Investor Relations website. On today's call, Yos will discuss our business activity and Nahum will then cover additional details regarding financial results. Thank you, and I would like to now turn the call over to Yos. Please go ahead. Thank you, Brad, and good morning, everyone.

The second quarter marked another step forward in our efforts to restore profitability. Gross margin improved meaningfully both year-over-year and sequentially, reaching 24% on low revenue. And our adjusted EBITDA loss narrowed significantly to $1 million from $6.4 million a year ago and $7.5 million in the first quarter. These results demonstrate that the structural actions we have taken are delivering the expected benefits. With our optimized manufacturing footprint and global production partner network now in place, we have created a leaner, more flexible operating model that is improving margins, enhancing customer service, and supporting our path to sustainable profitability. Global revenues totaled $96.6 million, down approximately 7.7% year-over-year on a constant currency basis, reflecting competitive dynamics and soft market conditions, mainly in North America. While we are encouraged by the progress in profitability, restoring revenue growth remains our top priority. In North America, we continue to strengthen relationships with key customers and fabricators and expanding our presence in the big box channel, which grew year-over-year in the quarter. Australia delivered its fourth consecutive quarter of year-over-year growth, supported by our Zero Silica Icon Collection, as we continued to regain our leading position in that market. At the same time, we continued to invest in our long-term growth drivers, our brand, our innovation, and our porcelain offering. While the external environment remains challenging, we continue to focus on disciplined execution, delivering improved customer service to our production partner network, and maintaining a lean cost structure. Late last week, the U.S. administration announced a new tariff rate quota on imports of world surface products, effective August 15th. We are still assessing the potential impact on our business. However, these developments do not change our strategic priorities, and we remain confident that our operating model positions us well to deliver long-term value. I will now turn the call over to Nahum.

Thank you, Yoss, and good morning, everyone. Looking at our second quarter results, global revenue was $96.6 million, compared to $101.1 million in the prior quarter. On a constant currency basis, revenues declined approximately 7.7% year-over-year, primarily reflecting competitive pressures and continued softness in global demand, mainly in North America.

These factors were partially offset by strength in Australia.

Breaking down our original performance, in the U.S., revenue was approximately $42.7 million compared to $49.6 million in the prior year quarter, a decrease of 14.1%. The decline was driven by lower volumes in our core business, mainly reflecting soft conditions in the commercial channel, including new development, and in our business through stone suppliers. Our big box business grew approximately 3% year-over-year, led by strong growth with IKEA. Canada revenue decreased 17.5% on a constant currency basis, mainly reflecting fewer housing completions and slow market conditions. In Australia, revenue was $20.3 million, compared to $16.6 million in the prior year quarter, an increase of approximately 10.1% on a constant currency basis. This marked the fourth consecutive quarter of year-over-year growth in Australia, reflecting the continued recovery of our market position following the introduction of our zero silica icon products.

EMEA sales were down 9.8% on a constant currency basis, primarily due to the timing of orders shipped to customers in the period.

In Israel, revenue increased 32.4% on a constant currency basis, mainly reflecting a favorable model comparison to the prior year period, which was impacted by the regional conflict. Looking at our second quarter P&L performance, gross margin was 24% compared to 19.6% in the prior year quarter, an improvement of 440 basis points and up 170 basis points sequentially from 22.3% in the first quarter. Adjusted gross margin was 26.5% compared to 19.7% in the prior year quarter. The improvement mainly reflects the realization of cost savings from the closure of our ballot facility and the transition to our global network of production partners. The quarter also benefited from a refund of $2 million received on previously paid USIE EPA tariffs. Operating expenses were $33.4 million, representing 34.6% of revenue, compared to $32.5 million, or 32.1% of revenue, in the prior year quarter. Excluding legal settlements and loss contingencies and impairment and restructuring expenses, operating expenses improved to 29.6% of revenue on 30.1% in the prior year quarter. The year-over-year increase in total operating expenses primarily reflects higher legal settlements and loss contingencies. Adjusted EBD in the second quarter of 2026 was a loss of $1 million compared to a loss of $6.4 million in the prior year quarter and a loss of $7.5 million in the first quarter of 2026. The improvement primarily reflects the higher gross margin and the growing contribution of our cost savings initiatives. Finance expenses were $5 million compared to $5.7 million in the prior quarter, resulting mainly from foreign currency exchange rate fluctuations. Adjusted diluted net loss per share for the second quarter was $0.10 on 34.6 million shares compared to an adjusted diluted net loss per share of $0.33 in the prior real quarter on 34.7 million shares. Turning to our cash flow and balance sheet, as of June 30, 2026, the company had a net cash position of $51.8 million compared with $50.4 million as of March 31, 2026. During the quarter, the company repaid Loyoli's credit facility, leaving it with no outstanding debt to financial institutions. Now, let me provide important context on several items. With quotes production fully transitioned to our global manufacturing partner network, our restructuring actions are contributing an increasing level of savings each quarter, and our second quarter gross margin reflects this progress. Once fully implemented, we expect the Barlev closure to generate annualized cash savings of approximately $22 million, bringing total expected annualized savings to more than $100 million by 2027 when compared to full year 2023. Cash costs associated with the restructuring program in the second quarter of 2026 were $1.2 million, and we expect to incur additional cash costs of approximately $3 to $4 million during the remainder of the year. Turning to the U.S. tariff environment, road-based import tariffs remain in effect across a wide range of countries and product categories, and the average tariff applicable to the products we import into the U.S. market is approximately 15%. Approximately 44% of our second quarter revenues were generated in the United States, served by our global production network. We continue to work with our production partners to optimize our supply chain, and our pricing actions in the U.S. market are helping to partially offset the higher cost of goods. During the second quarter, we also received a refund of approximately $2 million on account of previously paid IE EPA tariffs, which benefited both our gross margin and our operating cash I would also like to update you on a separate quote-specific trade matter. On July 31st, the U.S. administration issued its final determination imposing a four-year tariff rate quota on imports of world surface products, effective August 15th. During the first year, the industries covered imports within an annual quota of approximately 13 million square meters assessed quarterly will be subject to an additional 25% tariff, while imports above the quota will be subject to an additional 50% tariff. During the subsequent three years, the in-quota tariff will gradually decline to 19%, while the annual quota will increase to approximately 15.7 million square meters. We are evaluating the expected impact on our global production and supply network and intend to implement appropriate supply chain sourcing and pricing actions to mitigate its effects. On legal proceedings, we are subject to approximately 800 individuals alleging injuries related to exposure to respirable crystalline silica dust, including approximately 600 in the U.S. As of June 30, 2026, we recorded a provision of $51.2 million, representing our best estimate of probable and reasonably estimable losses. The vast majority of the U.S. claims are either at an early stage or considered only reasonably possible losses, and therefore no provision was recorded in connection with those claims. As of the same date, we recorded $12 million of insurance receivables globally as coverage disputes are ongoing. We will continue to vigorously defend these claims. During the second quarter, we resolved four claims in California and received a favorable defense jury verdict in a Colorado claim, which assigned no liability to the company. Additionally, the company was dismissed from several cases in various states. Prior verdicts remain under appeal. These matters remain complex and at different stages of development, and we will continue to evaluate our reserves and insurance recoveries as facts and circumstances evolve. We and certain insurance carriers initiated proceedings in July 2025 regarding interpretation of our insurance coverage. In conclusion, the second quarter demonstrated the strength of our new operating model. Cross margin expanded by 440 basis points, and our adjusted EBDI loss narrowed significantly on lower revenue. With the increasing contribution from completed restructuring actions, seasonal revenue patterns, and continued progress in Australia, we entered the third quarter on track to achieve our previously stated goal of positive adjusted EBITDA. Following the new U.S. tariffs on Quartz products, we are reassessing the timing of achieving positive adjusted EBITDA while evaluating the appropriate actions to mitigate the impact of these new tariffs. Thank you for your attention this morning. We appreciate your continued support and look forward to updating you on our progress next quarter.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.