Welcome to the USANA Health Sciences second quarter 2026 earnings. 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. As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Andrew Masuda, Director of Investor Relations. Please go ahead. Thank you. Good morning, everyone. We appreciate you joining us to review our second quarter results. Today's conference call is being broadcast live via webcast and can be accessed directly from our website at ir.usana.com. Shortly following the call, a replay will be available on our website. As a reminder, during the course of this conference call, management will make forward-looking statements regarding future events or the future financial performance of our company. Those statements involve risks and uncertainties that could cause actual results to differ, perhaps materially, from the results projected in such forward-looking statements. Examples of these statements include those regarding our strategies and outlook for fiscal year 2026, uncertainty related to the economic and operating environment around the world, and our operations and financial results. We caution you that these statements should be considered in conjunction with disclosures, including specific risk factors and financial data contained in our most recent filings with the SEC. I'm joined by our Chairman and Chief Executive Officer, Kevin Guest, our Chief Financial Officer, Doug Hekking, our Chief Commercial Officer, Brent Neidig, our Chief Operating Officer, Walter Noot, our Chief Scientific Officer, Dr. Kathryn Armstrong, as well as other executives. Yesterday, after the market closed, we announced our second quarter results and posted our management commentary document on the company's website. We'll now hear brief remarks from Kevin and Doug before opening the call for questions. Thank you, Andrew. Good morning, everyone. I want to use my time this morning to step back from the quarter and talk about where USANA is headed. I remain more convinced than ever that the path we're on is the right one. We're building something different, evolving the company. We're building a diversified omni-channel health and wellness company anchored by science and built on deep, lasting consumer loyalty with our products reaching consumers wherever they choose to shop. This transformation is well underway. The progress we are seeing across our portfolio this year reinforces my confidence in our strategic direction. Our core nutritional business continues to demonstrate stability and momentum. Mainland China, our largest and most established market, is showing signs of renewed strength. That matters because it reflects the deep trust our brand partners and customers place on this brand. We're backing that trust with continued innovation, including the recent launch of Glow, our first skin health supplement, which extends our science leadership beyond topical skincare into cellular-level formulations. Looking ahead, I'm pleased to note that USANA will host our live 2026 Americas Convention on August 12th through the 15th in San Diego, California. This event brings together our brand partners from across the United States, Canada, and Mexico for business training, new product launches, product education, and recognition of our top performers, reinforcing the engagement and momentum that we continue to drive from our core nutritional business. That same momentum is what we're working to build across the business. We're evolving our brand partner compensation plan, accelerating our product innovation, and modernizing technology that underpins how our brand partners and our customers experience and interact with our brand. I'm genuinely excited about the compounding effect these initiatives will have as they mature. Hiya continues to open doors for us in ways that would've been hard to imagine a few years ago. The brand's presence at Target remains strong. Our early footprint in Canada and the U.K. is trending in the right direction, and the Hiya team is leaning into the traction we are seeing on Amazon as well. At the same time, Hiya's direct-to-consumer business has experienced a tougher and more expensive digital marketing environment, and that's had a clear impact on subscriber growth this year. I don't want to gloss over that. It's a real challenge the business is confronting right now. In the long run, I assure you that the brand equity Hiya has built as the category leader in children's health and wellness is a durable asset that gives us multiple paths for growth. We see a very encouraging future as Hiya expands into new retail channels, new geographies, new product categories, and new customer demographics. Rise Wellness experienced a packaging issue that affected execution of the commercial plan during the quarter. Although that issue is resolved, we now expect that Hiya's net sales for the full year to be lower than we previously anticipated. Again, when I look beyond this short-term disruption and focus on Rise's long-term potential, I am very confident. Protein Pop is barely a year into its life as a national brand, and it's already built real distribution and shelf presence across major retail channels. The team is launching an additional Protein Pop product in the third quarter that demonstrates its commitment to speed and innovation. Yes, the current outlook has been disrupted, but our conviction is where the brand is headed long-term remains firmly intact. I see the potential synergy and growth opportunity in our company, that through executing a clear strategy with discipline and stabilizing and strengthening our core nutritional business while scaling our high-potential ventures brand and investing in the technology and innovation will define our next decade. We anticipate these efforts will stimulate growth, and I'm encouraged by the caliber and engagement of the teams driving this forward. Our balance sheet remains a real source of strength and opportunity for us. We ended the quarter with $169 million in cash, zero debt, and generated $20 million of free cash flow, driven in large part by efforts to improve our working capital management. Our financial flexibility allows us to keep investing in USANA's evolution into a diversified omni-channel health and wellness company, even as we navigate near-term puts and takes across the portfolio. With that, let me hand it over to Doug to provide additional color on our second quarter financial results and our updated outlook as things come to fruition. Thanks, Kevin. Good morning, everyone. There are two primary drivers that impacted this quarter's results that I want to briefly discuss. First, the company recorded an estimated preliminary non-cash goodwill impairment charge of $29 million related to the Hiya reporting unit. This non-cash charge primarily reflects the current and expected performance and changes in near-term forecasts, as well as updated valuation assumptions under applicable accounting standards, including adjustments to market multiples and discount rates. The impairment does not reflect a change in management's commitment to the business. We are confident in the future of Hiya and its management team while recognizing their strategic importance as part of our long-term growth strategy and as they leverage the brand across additional channels and international markets. Second, we recorded $9 million in income tax expense on a pre-tax loss of $19 million during the quarter, which contributed to the loss. The aforementioned items created misalignment between where we generate revenue and where we incur costs and had the effect of disproportionately impacting income taxes. Let me turn to our updated outlook for fiscal 2026. We are lowering our full-year outlook. That reflects the more difficult and expensive direct-to-consumer digital marketing environment affecting Hiya's second half net sales and lower near-term net sales from Rise Wellness. Our core nutritional outlook is largely in line with expectations, and its performance this quarter reinforces our confidence that the initiatives underway are the right foundation for long-term sustainable growth. To be clear, this update is about near-term timing, not our long-term conviction in either venture company. Hiya and Rise Wellness are both continuing to build solid foundations with retail relationships, product pipelines, and market footholds that we believe will drive meaningful future growth. I'll now hand the call back to Kevin before we open the line for questions. Thanks, Doug. Let me close with this. Our core nutritional business is performing in line with our expectations and gaining traction from the actions we've taken to stabilize it. Our balance sheet remains strong, debt-free and cash generative. Hiya and Rise Wellness encountered near-term challenges this quarter, but both brands continue to build real momentum in retail, e-commerce and international expansion, and we remain confident in their long-term potential. We recognize that the path to building a diversified omni-channel health and wellness company will not always be linear, and we are managing the business accordingly with discipline and clear focus on long-term value creation for our stakeholders. With that, I'll now turn the call back to the operator for Q&A. Thank you. If you'd like to ask a question, please press star one on your telephone keypad. Confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Anthony Lebiedzinski with Sidoti & Company. Please proceed with your question. Thank you. Good morning, everyone. Thanks for taking the question. The core nutritional segment outperformed our expectations, and certainly it was nice to see the sales growth in Greater China. As it relates to China, what do you think are the main factors driving the slight uptick in sales, and do you think the sales gains are sustainable going forward? That's an excellent question. I'm going to ask Brent Neidig, our Chief Commercial Officer, to respond to that. Hey, Anthony. Good morning. Good morning. Yeah, we're pleased with the performance of China in the second quarter. As you recall from the last quarter, we did have a very robust incentive and new product launch offering in the first quarter. Anytime we do something like that, there always is a tail associated with it, and we saw that tail continue in the second quarter. We are pleased with the resiliency of our brand partners and our customers in the Chinese market. That economy is soft, just like many economies around the world. They have shown resiliency, and there is a tremendous amount of momentum that's been built up over the last several quarters with the initiatives that we've rolled out. I expect to see that continue. We're pleased. We have several things that are scheduled for the back half of the year, just like we do in many of our other markets in terms of new product rollouts, incentive offerings, and other events. Pleased to see with the progress that we've made so far, and we expect that to continue. Hey, this is Kevin. I just wanted to add on to Brent's comments. From my perspective, we have stronger leadership overall in China now than we've ever had, and that leadership is really executing well on their strategy for the market and our overall strategy for the company, and we're seeing that in results. Our president there, Peter, is doing a fantastic job, and my confidence has never been higher in our Chinese leadership, which is a really bright spot for us. Thank you. Just switching gears to North Asia, which was a laggard for you guys in the direct business. It was down 20% of revenue. Maybe if you could just take a stab at explaining what's going on there. I know it's a far smaller market than China, nevertheless, it's important market and what are you taking as far as steps to improve that trend? When we look at North Asia, Korea is our largest presence there. Korea has been a very big market for us in the past. We've seen a lot of slowing in that market over the last couple of years. I think I talked about this last quarter, but we went through a leadership transition at the beginning of the year in Korea. That always causes a little bit of disruption, but we're very pleased in our new general manager for that market, and we're starting to see a lot of momentum beginning to build. There's unification taking place amongst the leadership team within the market, including our brand partner leadership as well. Just the most recent reports and the things that we're seeing come out of that market, I have reason for optimism to see what's coming out of Korea. We also have a couple of new products that are going to be launched in that market, personalized packs that are going to be unique to that market as well. That's going to be launching here in the third quarter. We're very optimistic to see where that takes us. I expect to see Korea rebound. That's good to hear, certainly. Switching gears to Hiya. Certainly, I know you have expanded into brick and mortar and doing some international there as well. Just wanted to get a better sense as to how is the core direct U.S. subscription business doing. I don't know if you are prepared to give us exact number, but just wondering how it's doing on an organic basis, excluding some of the growth initiatives. That's an excellent question. I'm going to ask Walter Noot, our Chief Operating Officer, who also from a home office perspective, is managing that business for the management team. Walter, will you give some color to that question? Yeah. Thanks. Yeah. Hiya, as we talked about this several quarters in a row, that with Meta, the CAC's been going up. We've had issues with Meta's algorithm. It's created issues for us as far as customer acquisition. We've seen improvement in that over the last, let's say, last few months. Last month, let's say, we've seen improvement in those numbers. That's been encouraging. The other thing is that it's back to school time. That's a great time of the year for Hiya. We believe when you look forward, we think that's going to help us for this year. I mean, that's obviously a great thing. When we acquire customers, first order with Hiya is half price, which is different than a lot of other subscription businesses. You'll see as you look at our outlook, you can see that it looks, let's say, somewhat flat. That is also assumes that we're going to be adding more customers with our subscription business on top of the retail that we're doing right now with Target. Mm-hmm. Got you. As you alluded to, Hiya has had some issues with Meta changing their algorithms and so on. Just wondering, what are your thoughts on shifting some of the advertising more towards, let's say, TikTok, for example, maybe using some influencers on there. Just wondering if there are ways that you can just try to diversify your efforts beyond Meta, which, as you've alluded to, you've had issues with. Yeah, that's exactly right. That's exactly what the team's doing right now. With the Hiya team, they've got plans in place throughout the rest of this year and beginning of next year. TikTok's going to be a big mechanism for them to be able to build growth and of course, retail. We're adding more retailers. That's why we're very excited about the future of Hiya, where it's going. It's a transition time, I think. We've been a subscription-only business for what? Four or five years. It's been great. Hiya has been awesome at that. I think that business has somewhat flattened out, as you've seen. I have spent $150 million on advertising over the last X amount of years, that's built a really good brand. It's got a great brand presence and really good awareness with parents and their kids. We just see these opportunities in TikTok, retail, international business. We think the business is going to do well in the future. Okay. Sounds good. Just shifting gears also to Rise Wellness. Is it possible for you guys to quantify the impact of the packaging issue in the second quarter and the related costs associated with that? Anthony, this is Doug, and Walter can kind of provide some clarity. He's been in the middle of it. Essentially, as we've identified the issue and took proactive steps, it essentially stopped the sales from pushing through the channel, and I think doing the right thing represented us well with that customer and gives us future opportunity. Without a doubt, it was disruptive. We did take a charge for some inventory, and there's other inventory that we think we can go back and find a way to get out there where we feel good about standing behind the product. That's big picture. We had a much higher guidance range than what we provided, and that delta is really kind of the slowdown and kind of the ramping back up. As Walter indicated, there's a lot of real positive momentum at Rise, some new product innovation that we see on the horizon, so we're quite excited about it. It's definitely been a short-term disruption. Walter, anything else? It was a cosmetic issue with some packaging. We voluntarily pulled the packaging back, the unsold product. It wasn't a safety issue or anything like that. We're going to continue to be able to resell through that channel and through those resellers, through those retail outlets. We have good relationships with them. Again, this is a short-term thing, and it affects our quarter because we have negative impact on revenue. We're very positive about where Rise is going. It's a great brand. If you look at the year, we've already exceeded what we did last year to date with Rise. There's a lot more coming. By end of the year, we'll have over 4,000 retailers we're selling in, 4,000 doors, and that's of a brand that's less than a year old. That's pretty good. More specifically, Anthony, the range relative to kind of the change from our original guidance in that $30 million-$40 million top line and probably about $4 million-$5 million pressure on margins just from having a little bit lower top line and some of that operational infrastructure. That's very helpful color. Last question from me is just how do we think about the tax rates for the back half of the year? Yeah, I think just because of the near-term pressures we see in these venture companies, we're going to see an elevated tax rate. Those things really contributed to structurally something where we've had a little misalignment with revenue, where revenue is generated, costs are incurred, and this amplified it. It's definitely going to be an elevated tax rate through the year. Obviously, not what you saw in the second quarter on the catch-up, I think it'll definitely be much higher than what we'd like to see it. We're definitely working on things, and I think as we execute in these venture brands and work on some other things, you'll see that come down prospectively, which we're confident we can do. Sounds good. Well, best of luck. Thank you. Thanks, Anthony. Thank you. Once again, as a reminder, to join the question queue, please press star one on your telephone keypad. Our next question comes from the line of Ivan Feinseth with Tigress Financial Partners. Please proceed with your question. Hi. Good morning. Thank you for taking my question. Beyond some of the near-term operational and the goodwill issues, could you talk bigger picture? It looks like you're evolving to me from a direct seller to an omni-channel distributor because now you have subscription, direct sellers, direct to consumer, now in-store availability. Can you give some your thoughts on how you're growing that? Second, you have this tremendous vertically integrated product development manufacturing platform like how you could, when you make acquisitions, bring more brands onto your platform, develop new products to address what is an increasing interest on the consumer side on nutrition, preventative health, sports nutrition. It looks like you have a huge and growing market and an infrastructure that you're building to address a market on multi-levels and multi different kinds of products, including the new one you said you just introduced, the skincare supplement. Ivan, thank you. That's a great question. Strategically, if you look at the world overall, the wellness platform, as you stated, is a growth market, and we are involved in a growth marketplace, and we believe we're the best in the world at what we do. As we explore and find new ways to service consumers and grow consumers, our overall strategy statement is to grow consumers of our brands. We need more people every day putting what we make in their mouths, to put it simply. That's what we're focused on. We've got it on signs hanging around the building. That does lead us into the multi or the omni-channel approach and being better at what we do. Just if you look at our core nutritional business, we have a massive opportunity just by upgrading our technology and making our products more accessible to the consumer, and making the interaction be more relevant. I truly believe that the frequency of relevant communications equals brand loyalty. As we focus on relevant communications, leveraging technology, which is one of our major spends here as we invest in the change and evolution of the company, it's more about interaction and experience. One thing you mentioned was our Glow product. It was really, for me, a test to really see the relevancy on some of our initiatives, as much as it was a very good product launch. We were very pleased with the amount of incremental business we were able to generate and new consumers who hadn't experienced our brand through a new approach and a new avenue. I'm going to ask Kathryn Armstrong, our Chief Scientific Officer, if you would just add some color to Ivan and the notion of product extension and how it could fit into an omni-channel marketplace, also leveraging across the different categories, the opportunity we have there. Hi, Ivan. It's good to talk with you again. Exactly what you said, right? We have a very strongly integrated R&D team, operations, execution. That's the strength we have that can be leveraged, not just through what has been traditionally our core business, but through the acquisitions of the brands that we have acquired and through many other means. We are looking at how do we grow that and how do we make sure we're leveraging all of the talent we have at USANA in a way that best drives return. For us, it's been a lot of fun, as you and I have discussed, as we look at these different formats and these different opportunities. Things that we're learning in the core business globally has helped us as we look at, for example, Hiya's expansion and how we understand kids through the Hiya market clearly can feed back into how we understand kids within our USANA core. All of those are accurate reflections, insightful on your part and aligns with what we're thinking. When it comes to Glow, I think that's really representative of who USANA is. We started with ingredients that have strong clinical data. We didn't stop there. We wanted to really think about how do you address skin from the inside and not just through a topical solution. We took those clinically tested and relevant ingredients and then put them into a consumer challenge test to really understand if our consumers could see and feel the difference. It's important to us, as Kevin said, we believe we are and will continue to be the best in this space. For us, making sure we have that clinical data, those ingredients that are at the right doses and the right forms, then ensuring that those deliver all the way through to the customer experience is important to all of our businesses and all of our brands. Ivan, I also have David Bagley here, who is our Executive Vice President over Product Marketing. He works hand in glove with Kathryn strategically on your question. Would you add some color also to Ivan's question? Yeah. Thanks, Kevin. Ivan, it's been a bit, but it's good to chat with you again, and thanks for being on the call. I think at the root of it's not the activities we're doing, it's really, to Kevin's point, it's the strategy. At the root of that is what are we doing to not just sell products, but really identify what the ideal customer looks like, and how do we offer something better to them than what the other people are offering? Glow is definitely representative of that. We have a very strong audience in the women category, and they're looking to us as a trusted brand to bring unique and innovative solutions to them. I applaud Kevin's leadership in wanting to be able to look at some ways that are uncommon, but yet very founded in science to deliver something meaningful that's more rooted in, I'd say, less marketing and more consumer experience that elevates the USANA brand. We're going to continue to lean into that. In partnership with Dr. Armstrong and her team, we're very confident where this is going, we're excited about it. It's an interesting new product, a new category. It's good to see because everything is going back to gut health, including collagen synthesis and everything is in your gut, skin, digestion, health. It's a huge area. Even let's say teeth care is more even being focused on the gut than just toothpaste. Congratulations on the new product. Thanks, Ivan. Thank you. That concludes our question and answer session. I'll turn the floor back to Mr. Masuda for any comments. Thanks, Melissa. Thank you all for your questions and participation on today's conference call. If you have any remaining questions, please feel free to reach out to Investor Relations at 801-954-7210. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.