The Marzetti Company

Good morning. My name is DeeDee, and I will be your conference call facilitator today. At this time, I would like to welcome everyone to the Marzetti Company's fiscal year 2026 third quarter conference call. Conducting today's call will be Dave Szczesinski, President and CEO, and Tom Pigott, CFO. All lines have been placed on mute to prevent any background noise. After the speakers have completed their prepared remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1-1 on your telephone keypad. If you would like to withdraw your question, please press star 1-1 again. Thank you. And now, to begin the conference call, here is Dale Gnabczyk, Vice President of Corporate Finance and Investor Relations for the Marsetti Company.

Good morning, everyone, and thank you for joining us today for the Marzetti Company's fiscal year 2026 third quarter conference call. Our discussion this morning may include forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially, and the company undertakes no obligation to update these statements based upon subsequent events. A detailed discussion of these risks and uncertainties is contained in the company's filings with the SEC. Also note that the audio replay of this call will be archived and available on our website, investors.marzetticompany.com, later today. For today's call, Dave Sosinski, our president and CEO, will begin with an update on our Bacchans acquisition that was successfully completed on Friday, May 1st, along with a business update and highlights for the quarter. Tom Piggott, our CFO, will then provide an overview of the financial results. Dave will then share some comments regarding our current strategy and outlook. At the conclusion of our prepared remarks, we'll be happy to respond to any of your questions. Once again, we appreciate your participation this morning. I'll now turn the call over to the Marzetti Company's President and CEO, Dave Susan. Dave?

Thanks, Dale, and good morning, everyone. It's a pleasure to be here with you today as we review our third quarter results for fiscal year 2026. I would like to start today's call by providing you with some insights specific to our acquisition of BACHANZ, the fast-growing Japanese American barbecue sauce brand known for its delicious, authentic, clean label products. I'm happy to share that in advance of last week's closing of the transaction, we have been collaborating closely with the Botchon's team on our future plans for the business. Everything we've learned has made us even more convinced about what a great addition this is to our family of brands. Since our announcement, the Botchon's business has continued on a path of strong growth. with CERCANA data for the quarter ending March 31st showing strong sales growth of over 25% and TDPs of over 50%. This growth has resulted in share gains for bachans in the barbecue sauce category, positioning them as the second leading retail brand. Consumers love both the brand and the products as evidenced by its broad usage across a wide variety of proteins, food types, and meal locations. We believe this brand has tremendous potential and is the perfect fit for our sauce portfolio. Our thoughtful plans for the Ba Chon's integration are fully on track. They will remain based in California with their very strong team retained to lead the business. We are also delighted that Ba Chon's founder, Justin Gill, has agreed to continue working with us on product development and marketing strategy. At the same time, we are developing plans to provide this team with the opportunity to draw from Marsetti's resources, including our go-to-market capabilities, culinary expertise, procurement capabilities and supply chain expertise to support both their continued growth and cost synergies. Over time, we anticipate additional opportunities for Baachans to more fully leverage Marzetti's supply chain network. We believe our light touch integration approach will allow Baachans to continue its strong growth trajectory, and we look forward to a bright future with the Baachans team. This acquisition strategically expands our portfolio of leading sauces, dressings, and dip brands. that now represent two-thirds of our consolidated net sales. It also specifically strengthens our portfolio of sauces, which alone account for nearly 40% of our consolidated net sales. In the era of Maha and GLP-1s, we believe consumers will continue to seek flavor enhancements for their meals. We believe our deep culinary expertise and focus scale in these categories positions us well to support the continued growth of Ba Chans as well as our other brands. Moving on to the Marzetti Company's results for our fiscal third quarter, which ended March 31st, consolidated net sales declined 1% to 453 million. Excluding non-core sales attributed to the Temporary Supply Agreement, or TSA, Adjusted net sales decreased 9 tenths of 1% to $452 million. Despite the lower sales, we were pleased to report record third quarter gross profit of $107.2 million, an increase of 1.2%, driven by our cost savings programs. In our retail segment, net sales declined 3.2%, while volume measured in pound shift declined 5.6%. Our category-leading frozen bread brands were a bright spot as sales of our New York bakery frozen garlic bread products continued to grow and increase market share, while sales of our sister Schubert dinner rolls benefited from the pull forward of demand due to the earlier Easter holiday. These sales gains were more than offset by the impacts of category softness and reduced sales into the club channels. We have initiatives in place with our Club Channel partners to pursue future growth for both our Chick-fil-A sauces and Olive Garden dressings. CIRCONA scanner data for the quarter ending March 31st showed sales of our core brands and licensed items up two-tenths of 1%. In the frozen garlic bread category, our category-leading New York bakery brand grew sales 4.4%. adding 260 basis points of market share for a category-leading share of 46.7%. In the frozen dinner roll category, our own Sister Schuberts brand and our licensed Texas Roadhouse brand combined to grow 10.1% for a category-leading market share of 61%. In the shelf-stable sauces and condiments category, Sales of our licensed Chick-fil-A sauces grew 4.4%, resulting in a five basis points growth of share. In the crouton category, our branded croutons added 40 basis points of market share for a category leading 28.5%. In the food service segment, excluding the non-core TSA sales, adjusted net sales grew 1.8%. while volume measured in pound shift improved 0.8%. In addition to the benefit of inflationary pricing, the increase in food service segment net sales reflects increased demand from several of our core national chain restaurant customers. We were pleased to report record third quarter gross profit of $107 million with reported gross margin of 50 basis points. Our focus on supply chain productivity, value engineering, and revenue management all remain core elements to further improve our margins and financial performance. I'll now turn the call over to Tom Piggott, our CFO, for his commentary on our third quarter results. Tom?