The Middleby Corporation

Good day and welcome to the Middleby Corporation's first quarter 2026 earnings conference call. All participants will be in a listen-only mode. On today's call are Tim Fitzgerald, CEO, Mark Salmon, President of Middleby Food Processing Group, Brittany Serwin, CFO, James Poole, Chief Technology and Office Director, Operations Officer, and Steve Spittel, Chief Commercial Officer. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchtone phone. To withdraw your question, please press star, and then two. Please note this event is being recorded. I would now like to turn the conference over to Tim Fitzgerald. Please go ahead.

Good morning, and thank you for joining today's call. I'm excited for the next few months and what it holds for Middleby. That starts today with sharing the excellent results achieved across both segments of the business and raising our guidance for the year. It continues next Tuesday during our investor day in New York as we lay out our visions for the exciting future of both segments. And it culminates with the separation of the segments into two pure play standalone public companies. But the separation of the businesses is not the end. In fact, it's only the beginning of a new and exciting chapter for both companies. Following this transaction, Middleby will operate as a focused commercial food service leader with a scaled portfolio of best-in-class brands, accelerating innovation, and industry-leading 26% segment-level EBITDA margins. while food processing becomes an independent growth platform with segment-level EBITDA margins over 20% and significant expansion opportunities through both organic and acquisition growth initiatives. The separation will allow for focused execution across both companies with significant growth opportunities ahead. While we're only discussing the near-term outlook on today's call, we look forward to showcasing our long-term vision next week. Turning to our first quarter results, our total revenue of approximately $840 million for commercial food service and food processing exceeded our expectations. This strong top-line performance drove adjusted EBITDA of approximately $181 million. Through a combination of these operational results and substantial share repurchases over the past 12 months, This translated to adjusted EPS from continuing operations of $2.16. Same as last quarter, for today's discussion on segment-level results and trends, I will be discussing the commercial food service results and outlook, and I've asked Mark Salmon, the CEO of Food Processing, upon completion of the spinoff to discuss the food processing segment performance. Starting with commercial food service, We generated revenue of approximately $616 million, which exceeded our expectations during the first quarter. The outperformance was driven primarily by the general market with our dealer partners, which again had double-digit growth during the quarter, maintaining the strength we saw to end 2025. We continue to gain share with our dealer partners as a result of efforts to strategically align those relationships and broaden the solutions we now sell through our channel partners. The broad-based strength we saw in the general market was complemented by better-than-expected growth with the chains, replacement activities improving given deferrals in the prior years, and more importantly, we have a strong pipeline of new opportunities which are converting. We are particularly optimistic about the momentum we are experiencing across the industry on beverages, where chain customers are seeking to refresh their menus with new beverage offerings. The investment we have made in the past several years is allowing us to capitalize on this momentum and industry trend. All that said, while the quarter came in better than expected for chains, industry conditions remain challenging, especially as consumer wallets became increasingly strained in March and April. As we look ahead, we're remaining prudently cautious, though we are well-positioned for the environment to hopefully improve as we move through the year. BRIT will provide additional color, but our guidance assumes a relatively consistent environment to what we are currently experiencing as we await larger chain customers to firm up their plans for the year, particularly in the second half, and adapt to the current macroeconomic environment. As we think longer term, the investments we have made positioned us with unmatched competitive advantages, both now and into the future. With the industry's broadest portfolio of leading brands, the strongest innovation pipeline, including IoT, automation, and beverage technologies, and investments in go-to-market and service initiatives that will accelerate growth and drive market share gains for years to come. The foundation of the commercial food service business is stronger than ever, and the strategic investments that we have made over the past several years position us for growth and an exciting next chapter. Before I turn the call over to Mark, I would like to take a moment to welcome Brittany Serwin as our new CFO. Britt has been an invaluable member of the Middleby leadership team and has been integral to the company's growth since joining 15 years ago. He has quickly and seamlessly stepped into this new role. I'm very excited to work with Britt as we transform the company into a pure play commercial food service equipment leader. I would like to now turn over the call to Mark to discuss food processing.

Thanks, Tim. Food processing delivered our best first quarter ever, delivering record results across key top line metrics. with organic revenue growth of 25 percent, record order intake, and our fifth consecutive quarter of book-to-bill above one. Turning to specifics, in the first quarter, the food processing segment generated revenue of approximately $224 million, with order of $231 million, resulting in a backlog of $416 million, a further increase versus the end of the year. The strength we saw across the business in the first quarter puts us on a solid foundation and builds confidence for the remainder of the year. In terms of drivers, we are realizing growth in the international markets thanks to the investment we have made over the past several years in our international footprint. As our brand can now reach a broader global audience, with food processing trends that are evolving around the world. We saw these investments and strategy play out during the quarter with two new bakery projects in Kenya secured through our expansion of international offices in recent years and representing our first meaningful order in the country. This is yet another example of how we are uniquely positioned with our total line solutions to deliver value to our customer globally, and that strategy is proving to be a key driver of our organic growth. We are in the early innings of executing our growth strategy with significant market opportunities ahead. What sets Middleby Food Processing apart is this comprehensive approach to serve industrial protein, bakery, and snack processors. We have created a portfolio designed to deliver complete end-to-end total line solution offerings that optimize our customers' entire production lines and are committed to delivering the lowest total cost of ownership. This targeted approach has also guided our acquisition strategy. We've built the food processing business by adding brands and products specific to target food applications, which complement our total line solutions. This formula works. Our recent acquisition of Guerreri from Italy is a great example. Since the acquisition 18 months ago, we have unlocked multiple total line solution opportunities in the cake category, Not only elevating Guerrero, but growing the order pipeline for our existing brands and providing our customers an unmatched solution only Middleby Food Processing can deliver. We have consistently executed our strategic and disciplined approach to acquisition for 20 years. Now, as we separate into our own public company with a strong balance sheet, At just one and a quarter times net leverage, we have significant capacity to accelerate this proven growth strategy. Beyond top-line growth, we have clear visibility to improve profitability driven by three key factors. Lapping tariff-related headwinds from Q3 2025, favorable mix in our backlog, and continued margin maturation of recent acquisitions. In summary, we're well positioned to deliver both strong top-line growth and margin expansion for the remainder of the year. Finally, as you saw in our Form 10 filed on Monday, we have completed the build-out of our management with a highly experienced set of executives prepared to execute on the extensive growth opportunities ahead of us. These include Mark Bowie, who has more than 25 years of manufacturing expertise and proven leadership as COO. Matt Fusion has more than 15 years of experience across a variety of roles at Middleby, has been my M&A partner for the past 10 years, and will be joining Middleby Foods Processing as Chief Strategy Officer. and most recently, Amy Campbell, who has 29 years of industrial manufacturing and public company experience at CFO. I, along with the rest of the team, are excited to share our vision for the future at the Investor Day next Tuesday. Although we have been executing our strategy for many years, I can assure you that we are only getting started on what's possible as we separate into an independent company with a balance sheet and necessary liquidity to support our ambitious growth strategy. With that, I'll now turn the call back over to Tim.