The Marzetti Company

Good morning. My name is Kelly 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 2027 first quarter conference call. Conducting today's call will be Dave Ciesinski, 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 period. If you would like to ask a question during this time, simply press star 11 on your telephone keypad. If you would like to withdraw your question, press star 11 again. Thank you. And now to begin the conference call. Here is Dale Ganobsik, Vice President of Corporate Finance and Investor Relations for the Marzetti Company.

Good morning everyone and thank you for joining us today for the Marzetti Company's fiscal year 2027 first 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 at our website, investors.marzetticompany.com, later today. For today's call, Dave Ciesinski, our President and CEO, will begin with a business update and highlights for the quarter. Tom Pigott, 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 Ciesinski. Dave?

Thanks, Dale, and good morning, everyone. It's a pleasure to be here with you today as we review our first quarter results for fiscal year 2027. Our fiscal first quarter, which ended September 30th, presented challenges for our business. as the cyclospora outbreak and the sharp increase in freight costs adversely affected results. Consolidated net sales declined 2.4% to $481.5 million, while operating income decreased $17.8 million to $41.4 million. Excluding non-core sales attributed to the GSA, adjusted net sales declined 0.3%. Cyclospora drove double-digit declines in the affected categories, and the impact was concentrated in the Great Lakes region, where our Marzetti dressings, dips, and croutons have their strongest market development. Retail segment sales grew 2.0% to $252.7 million. At $17.8 million in incremental sales from Basha, our newly acquired Japanese barbecue sauce brand, along with strong growth from our Texas Roadhouse Dinner Rules, offset the impact of cyclospora. Food service sales, excluding non-core TSA sales, decreased 2.6% as strength from select national chain restaurant accounts. and a modest level of inflationary pricing were offset by the impact of the cyclospora outbreak. Other areas of our business continue to perform well during the first quarter and the impact of the cyclospora outbreak has moderated in recent weeks. Sercona scanner data for the quarter ending September 30th showed continued strong performance of the Boshon's brand with sales up 10.7%. Total Distribution Points, or GDPs, increasing 7%, and Velocity up 13% as the brand continues to grow share in the Barbecue Sauce category. Texas Roadhouse Rolls continued the strong path of growth in the Bros and Dinner Roll category, with sales up 21.3%, GDPs up 79.6%, and a market share gain of 270 basis points. When combined with our sister Schubert's brand dinner rolls, we finish the quarter with a category-leading market share of 54.2%. Our New York bakery brand also continues to perform well, with sales of 5.1% in the quarter, resulting in a market share gain of 250 basis points for a category-leading share of 46.6%. I'll now turn the call over to Tom Pigott, our CFO, for his commentaries.