Good day, and welcome to the Marrone Bio Innovations Second Quarter 2018 Earnings Conference Call. Today's conference is being recorded. At this time, I’d like to turn the call over to Linda Moore, General Counsel. Please go ahead.

Good afternoon everyone and thank you for joining our call. Before beginning, I would like to remind you that this conference call may contain statements regarding management's expectations, hopes, beliefs, intentions or strategies regarding the future as well as projections, forecasts or other characterizations of future events or circumstances. Such statements are based on management's current expectations and beliefs concerning future developments and their potential effects on the company. There can be no assurance that future developments affecting the company will be those that management has anticipated. Such statements involve a number of risks and uncertainties, some of which are beyond management's control, or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these statements. Important factors that could cause differences are contained in the reports filed by the company with the Securities and Exchange Commission, including under the heading Risk Factors and elsewhere in the company's quarterly report on Form 10-Q for the second quarter of 2018 and in our earnings release posted on the company's Web site. Should one or more of these risks or uncertainties materialize or should any of management's assumptions prove incorrect, actual results may vary in material respects from those discussed today. Any guidance that management may offer in this conference call represents a point-in-time estimate. The company expressly disclaims any obligation to revise or update any guidance or other forward-looking statements to reflect events or circumstances that may arise after the date of this call. After our remarks, we will hold a question-and-answer session. I will now turn the call over to our Founder and Chief Executive Officer, Pam Marrone. Pam?

Thank you, Linda. Good afternoon and thank you to everyone for joining us. With me today is Jim Boyd, our President and Chief Financial Officer; and as you just heard, Linda Moore, our General Counsel. In the second quarter of 2018, we continued to build our company’s infrastructure and executed upon our business plan. As the CEO and Founder of Marrone Bio Innovations, I’m confident about our growth opportunities and the future of our company. We have seen progress in the following areas. First, we have eliminated a vast majority of our debt and ended the second quarter with almost 25 million in cash, cash equivalents and restricted cash which should give us sufficient resources to fund operations as currently planned for the foreseeable future. With our stronger balance sheet, customers, distributors and growers can purchase our products with confidence. Second, we continue to move our pipeline ahead and commercialize innovative new products. As you know, we launched Haven Sun Protectant in March of 2017 and Stargus biofungicide in December. We launched Zelto bioinsecticide/nematicide, our first turf brand in January of 2018 and Amplitude biofungicide this spring. Most recently in June, we launched our CG brand of Regalia, Venerate and Grandevo into the Cannabis and home and garden market, a significant opportunity. In the first few days of August, we submitted the registration of MBI-014 bioherbicide to the EPA. Third, global field trials have come back very promising in key areas, including Europe, Central and South America, Turkey, South Africa and other intense pesticide markets worldwide. Fourth, we have expanded our commercial team around our appointment of Kevin Hammill as our Chief Commercial Officer. We have added a new territory in eastern Washington to serve the tree fruit market as well as in Idaho, Utah and Montana to provide crop…

Thank you, Pam. As noted, I would like to walk you through our second quarter 2018 results. Revenues for the second quarter of 2018 totaled $5.8 million compared to $6.5 million in the second quarter of 2017 and compared to $4.3 million in the first quarter of 2018. Revenues for the first half of 2018 were $10.1 million compared to $10.6 million in the first half of 2017. As a result of the new revenue recognition standard ASC 606, year-over-year reported revenues are not strictly an apples-to-apples comparison. For the 2017 numbers, we use the old sell-in and sell-through revenue recognition method. If we use the same revenue recognition method in 2018, revenues in Q2 2018 would have been approximately $0.5 million higher or $6.3 million in Q2 of 2018 compared to $6.5 million in Q2 of 2017. The first half of 2018 compared to the first half of 2017 would have been approximately flat. We believe revenues in the first half of 2018 were affected by rumors regarding our ability to continue operations prior to our comprehensive stock and debt restructuring transaction in February. This earlier year uncertainty combined with the low disease pressure in a key market and lingering effects from the hurricane in the Southeast impacted our ability to grow more robustly in the first half. Our February and April financial transactions fortified our balance sheet and we have filled all but one of the commercial team vacancies we launched late in 2017. Gross margins in the second quarter were 47.3% compared to 38.8% in the second quarter of 2017. Second quarter gross margins benefitted from a favorable product mix as well as process and manufacturing improvements. We expect to see gross margin increases over the lifecycle of each of our products and to improve as production…

Thank you, Jim. We have made good progress on key strategic goals and operations and I want to highlight where our focus will remain for the balance of 2018. On the commercial front, we expect continued concentration on grower demand creation, including on on-farm demos to build awareness as well as expand our label uses; developing specific crop-based integrated programs to expand uses of our key products in preparation for the 2019 season; targeted placement with leading organic feed companies of our Biostacked seed treatment with groundwork BioAg. And in international, we expect approval for the use of Regalia on cannabis in Canada; to sign at least two more international distribution agreements in key global markets; several international regulatory submissions such as South Africa, Kenya, Europe, Brazil, Ecuador, Canada, Australia and New Zealand; several international regulatory approvals including Morocco, Philippines and Canada. Operationally, we anticipate continuing our work to add Venerate and Majestene production to our Michigan facility; continued gross margin improvement over the longer term as R&D and manufacturing initiatives continue to increase efficiencies and yield. In summary, we remain laser-focused on commercial execution and continuing to build a high performance sales and marketing team. As previously mentioned, we are also focused on increasing our presence with key large growers and strengthening our channel partnerships, all the while building our longer-term vision of being the market leading biological company through our own products combined with other potential synergistic products and technologies. With that, I’d like to now open the call for questions. Operator?

Thank you. [Operator Instructions].

I’ll now turn the conference back over to management.

Thank you, operator. In closing, I want to thank each of you for joining us today. And we sincerely thank our dedicated and committed employees, board members, suppliers, partners, debt holders, shareholders and customers for the confidence they have placed in us. We recognize the tremendous responsibility we have to realize MBI’s significant potential as a leading force in the adoption of biological in global crop protection and sustainable food production practices. We continue to conduct road shows and attend conferences on both coasts. If you are interested in a meeting, please contact management or our IR firm, MZ Group, to arrange. We look forward to updating you on our progress as we move forward with a number of key initiatives to build shareholder value over the longer term. Thank you.

Thank you. That does conclude today’s conference. We do thank you for your participation today.