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DATE

Thursday, February 26, 2026 at 10 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Timothy J. FitzGerald
  • President, Food Processing Segment & CEO Designate, Food Processing SpinCo — Mark Salmon
  • Chief Financial Officer — Bryan E. Mittelman
  • Chief Commercial Officer — Steven P. Spittle

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TAKEAWAYS

  • Strategic Portfolio Actions -- Completed sale of 51% of the Residential Kitchen segment to 26 North at an $885,000,000 enterprise valuation, receiving approximately $565,000,000 in cash proceeds; ongoing 49% ownership will be recorded as a non-core holding in discontinued operations.
  • Share Repurchases -- Repurchased 4,900,000 shares for $710,000,000 during 2025, reducing share count by 9%; repurchased an additional 1,700,000 shares for $250,000,000 in early 2026.
  • Reported Revenue -- Total company revenue for the quarter was approximately $866,000,000 for Commercial Foodservice and Food Processing combined, with Commercial Foodservice contributing $602,000,000 and Food Processing $265,000,000.
  • Adjusted EBITDA -- Company-wide adjusted EBITDA reached approximately $197,000,000 for the quarter, on an adjusted basis, driven by both segment performances.
  • Adjusted EPS -- Adjusted EPS for the quarter was $2.14; full-year adjusted EPS totaled $8.39, both excluding Residential Kitchen operations.
  • Commercial Foodservice Revenue Drivers -- Dealer partners experienced double-digit revenue growth, offset by continued declines among large QSR and convenience store customers due to persistent lower traffic and cost pressures.
  • Commercial Foodservice Margins -- Segment-level EBITDA margin exceeded 26%, and would have surpassed 27% without tariff impacts.
  • Food Processing Segment Performance -- Food Processing achieved a 1.3% organic revenue growth rate, with a segment EBITDA margin of 23% and a Q4 order intake of $322,000,000 leading to a $410,000,000 backlog—a record for the segment.
  • Tariff Impacts and Pricing Actions -- Tariffs created a $7,000,000 net EBITDA headwind in the quarter, with management implementing July and January price increases and operational actions to offset 2026 impacts.
  • Free Cash Flow and Leverage -- Free cash flow for the quarter was approximately $165,000,000 and operating cash flow was $178,000,000; leverage ratio at year-end was reported as 2.5x per the credit agreement.
  • Debt and Interest Expense -- Maturity of 1% convertible notes in 2025 resulted in an increase of $6,000,000 in quarterly interest expense, representing a $0.12 per-share headwind for Q4 and projected to impact full-year 2026 by $0.34 in EPS.
  • 2026 Outlook -- For Q1, management projects total revenue of $760,000,000 to $780,000,000, adjusted EBITDA of $161,000,000 to $173,000,000, and adjusted EPS of $1.90 to $2.02, assuming 47,700,000 average outstanding shares.
  • Full-Year 2026 Guidance -- Full-year revenue guidance is $3.27 billion to $3.36 billion, with Commercial Foodservice at $2.37 billion to $2.43 billion, Food Processing at $895,000,000 to $925,000,000; adjusted EBITDA guidance is $745,000,000 to $780,000,000 and adjusted EPS is $9.20 to $9.36.
  • Spin-off Timeline -- Separation of Food Processing is planned for completion by the end of the second quarter, with a public Investor Day scheduled for May 12 in New York City; a registration statement for the spin will be filed in April.

SUMMARY

The Middleby Corporation (MIDD 0.81%) announced the completion of its Residential Kitchen segment divestiture, generating substantial liquidity to aggressively reduce share count and fund future initiatives. Management confirmed plans to spin off the Food Processing segment in the second quarter, establishing two specialized public entities. Segment-level results highlighted outperformance in both Commercial Foodservice and Food Processing, with new dealer partnerships and product innovations driving share gains. Directors reported robust Q4 order growth and a record backlog in Food Processing, supporting optimistic forward guidance. Planned pricing actions are intended to fully offset projected tariff costs, though margin dilution is acknowledged for the first half of 2026. The company’s full-year outlook excludes one-time spin costs and anticipates continued capital returns via share repurchases.

  • Management expects share buybacks to remain the primary capital use for Commercial Foodservice after the separation, while Food Processing will focus M&A on targeted bolt-on acquisitions.
  • Backlog growth in Food Processing is projected to predominantly convert to revenue within 2026, though a minority portion may extend into early 2027.
  • Commercial Foodservice leaders identified broad-based dealer-driven growth, especially from expanded product lines in ice and beverage, as material contributors to recent share gains.
  • Guidance is cautious regarding new QSR store builds; management highlighted current push-outs but anticipates clarity and potential reacceleration later in the year as chain customers finalize their capital plans.
  • Leadership clarified that most food processing customer orders convert to revenue in six to twelve months, depending on product type.
  • Second half 2025 pricing and operational adjustments are expected to resolve first-half margin impacts from tariffs, with detailed stand-alone cost estimates to follow at Investor Day and the Baird Symposium.

INDUSTRY GLOSSARY

  • QSR (Quick Service Restaurant): A restaurant format emphasizing fast service, minimal table service, and typically lower price points, also known as fast food.
  • Dealer Partners: Distributors or resellers that serve as middlemen between The Middleby Corporation and its end-market customers, especially in Commercial Foodservice.
  • Total Line Solution: An integrated equipment offering covering the entire production line for food processor customers, encompassing multiple machines and systems optimized for end-to-end efficiency.
  • SpinCo: The new independent public company resulting from the spin-off of the Food Processing segment.

Full Conference Call Transcript

Timothy J. FitzGerald: And thank you for joining today's call. Over the past year, we have executed decisive actions to unlock significant value for our shareholders through the strategic optimization of our portfolio of industry-leading businesses across Commercial Foodservice, Food Processing, and what was formerly our Residential Kitchen segment. Before we dive into our results for the quarter, let me start with our strategic accomplishments. In February, we announced the completion of the sale of a 51% stake in our Residential Kitchen business to 26 North at an $885,000,000 total enterprise valuation, delivering approximately $565,000,000 in immediate cash proceeds, subject to future closing adjustments. This transaction represents a premium valuation while allowing us to retain meaningful upside through our 49% ownership stake.

Following the close of the transaction, The Middleby Corporation operates two highly focused industry-leading platforms: Commercial Foodservice and Food Processing. While we retained a 49% stake in the Residential JV, we are treating this as a non-core part of our operations, which is why you will see it in discontinued operations in the fourth quarter and going forward will be excluded from our adjusted results.

In anticipation of the proceeds from the deal, we will immediately put this capital to work for our shareholders. Combined with our ongoing share repurchase program, we reduced our overall share count in 2025 by 9% through $710,000,000 in buybacks, one of the most aggressive capital return programs in our industry. This reflects our conviction that The Middleby Corporation shares remain significantly undervalued relative to our earnings power and growth prospects. In the second quarter, we plan to complete the separation of our Food Processing business, creating two independent pure-play industry leaders. Each business will emerge with enhanced focus, optimized capital structures, and the resources to maximize growth in their respective markets. The financial impact is compelling.

Following these transactions, The Middleby Corporation will operate as a focused Commercial Foodservice leader with industry-leading 27% 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.

Turning to our fourth quarter results, our total revenue of approximately $866,000,000 for our remaining two segments exceeded our expectations. This strong top-line performance drove EBITDA of approximately $197,000,000. Through a combination of these operational results and the substantial share repurchases we made in 2025, this translated to adjusted EPS of $2.14 for the quarter and $8.39 for the full year. For today's discussion on segment-level results and trends, I will be discussing the Commercial Foodservice results and outlook, and I have asked Mark Salmon, the current President of our Food Processing segment, and, as we announced today, the CEO of Food Processing SpinCo upon completion of the spin-off, to discuss the Food Processing segment performance.

Starting with Commercial Foodservice, we generated revenue of approximately $602,000,000, which exceeded our expectations during the fourth quarter. The outperformance was driven primarily by the general market with our dealer partners, which had double-digit growth in the quarter. We attribute this second half momentum to improved demand with independents and in the institutional market, along with continued growth with emerging chains. We are gaining share with our dealer partners as a result of investments to strategically align those relationships over the past several years. The broad-based strength we saw in the general market was offset by continued declines among our large QSRs and C-store customers, which faced lower traffic and cost pressures throughout 2025.

While the QSR market conditions remain challenging, we are encouraged by actions taken by our larger chain customers to better position themselves heading into 2026. We have seen our customers address menu pricing, return to limited-time offers, and launch new beverage programs to reposition against the challenging backdrop with a focus to drive customer traffic. We are encouraged by the early traction we have with some of our largest customers with our new ice and beverage innovations. This is a targeted area of expansion for our Commercial Foodservice business, and we are well positioned with exciting new solutions.

As we think about the year ahead for Commercial Foodservice, we remain focused on building our business for long-term success, but are optimistic that the chain restaurant environment will stabilize and improve as we move through the upcoming year. Bryan will provide additional color, but our guidance assumes a relatively consistent environment relative 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.

More specifically, we have clear catalysts for accelerated growth with restaurant industry fundamentals stabilizing with early signs of traffic improvement; with our dealer partnerships generating strong momentum in the general market and institutional segments; and our ice and beverage platform representing a significant growth opportunity that we are uniquely positioned to capture. As we think longer term, investments we have made position us with unmatched competitive advantages both now and in the future, with the industry's broadest portfolio of leading brands, the strongest innovation pipeline, and leadership in automation and IoT capabilities that will drive market share gains for years to come.

We still have work to do, but I am excited for what the future holds for The Middleby Corporation Commercial Foodservice. I will now turn the call over to Mark to discuss Food Processing.

Mark Salmon: Thanks, Tim. Before I discuss the segment's results, I want to thank the Board of Directors for entrusting me with leading Food Processing SpinCo. Leading this company is the honor of a lifetime, and I am excited for the opportunity ahead. I also want to thank you, Tim, for the partnership you have shown me over the past ten years here at The Middleby Corporation. I look forward to working with you even more closely through this process. Turning to the Food Processing segment, in the fourth quarter, we generated revenue of approximately $265,000,000, which outperformed our expectations.

As I look at the business, I am proud of what we have accomplished in the fourth quarter, particularly our extremely strong order rate, but more excited about the strong foundation it creates as we enter 2026. 2025 was challenged with disruption from tariffs and high food costs, which delayed our customers' purchasing and investment in solutions in the first half. However, in the latter part of the year, we saw our customers moving ahead. We had very strong orders in both the third and fourth quarters, with a record backlog as we finished the year. This was driven by continued success with our total line solution offering along with strategic expansion in international markets.

We have a strong sales pipeline and continuing strong order intake. This all gives me great confidence in our position for not only next year, but the longer term.

Taking a step back, what sets The Middleby Corporation Food Processing apart is our comprehensive approach to serve individual protein, bakery, and snack processors. Rather than creating a portfolio of disconnected brands, we have created a portfolio designed to deliver complete end-to-end total line solution offerings that optimize our customers' entire production line, and are committed to delivering the lowest total cost of ownership. Our success reflects years of strategic investment in building these comprehensive customer solutions, and we are gaining momentum in the marketplace with a growing competitive advantage. Our decentralized culture promotes agility, innovation, and speed.

We have state-of-the-art innovation centers, with the most recent one opened this fourth quarter outside Venice, Italy, where we can showcase our know-how in the most innovative and collaborative environment. This strategy is one of the key foundations that will drive our organic growth in the years to come. I am also very excited about the continued opportunities that exist as we expand the platform through targeted strategic acquisitions. We have built the Food Processing business through additions of brands and products very specific to the food application that we have targeted and that complement our total line solutions. This has proven to be a very successful acquisition strategy, providing significant revenue and operating synergies.

We have a consistent and proven track record of executing on our acquisition strategy over many years with our strategic approach and financial discipline. Although we have been executing our strategy for some time, we are still in early innings, and it is the right time for the separation into an independent company. We now have the proper scale. We can accelerate what has proven to be our unique and successful business model. I am excited for what lies ahead. With that, I will turn the call back over to Tim.

Timothy J. FitzGerald: Thanks, Mark. I am looking forward to what is ahead for Food Processing. As you have already heard, we have two well-positioned segments for growth in 2026 and beyond. On top of this, at a corporate level, our capital allocation strategy remains aggressive and focused. We will continue our share repurchasing program, having allocated over $700,000,000 in 2025, reducing our shares outstanding by approximately 9%. We continued this share buyback activity into the first quarter, expecting to repurchase approximately another $300,000,000 in 2026. We plan to allocate a substantial portion of our free cash flow again to repurchases this year, but most importantly, have a world-class team around the globe whose commitment and execution continue to drive our success.

2026 represents a defining year for The Middleby Corporation, as we execute this strategic portfolio optimization and position both businesses for accelerated growth. We are planning an Investor Day on May 12 in New York City ahead of the Food Processing spin. We look forward to providing a greater level of information on profiles and growth strategies for each stand-alone company ahead of the separation in the second quarter. With that, now I will turn it over to Bryan to discuss our financial performance in greater detail and guidance for the first quarter and 2026.

Bryan E. Mittelman: Thanks, Tim. Our fourth quarter results showcase both the strength of our execution and the quality of our business model. Let me walk through the key financial highlights and our outlook. For Commercial Foodservice, positive impacts were seen from general market, institutional, and emerging chain customer segments. We delivered $602,000,000 of revenue and a solid EBITDA margin of over 26%. This would have exceeded 27% if not for tariff impacts. Customer engagement and interest in our leading technologies remain strong, especially in beverage dispense and ice products. At Food Processing, Q4 revenues were approximately $265,000,000 and our organic EBITDA margin was 23%. Organic revenue growth of 1.3% benefited from improvements in international markets.

Margins were impacted by tariffs, with higher costs and disruption in order timing impacting production efficiencies. We are experiencing a strengthening order rate and growing backlog. Q4 orders reached $322,000,000 and backlog grew to $410,000,000 with growth across most of our served markets and in our total line solutions.

Turning to Residential Kitchen, our transaction to sell a 51% stake to 26 North closed on February 2. Prior to the close of the sale, Residential Kitchen was treated as a discontinued operation. Following the close of the sale, our future balance sheets will include a minority interest investment reflecting our 49% ownership stake, and a note receivable. Our income statement will reflect the impact from our noncontrolling interest on a quarter-in-arrears basis. Residential results are not included in our non-GAAP adjusted earnings and adjusted EPS calculations, as they are no longer part of core operations. On a consolidated basis, total company adjusted EBITDA for Q4 was approximately $197,000,000 and adjusted EPS was $2.14.

Regarding tariffs, the adverse net impact to EBITDA in Q4 was approximately $7,000,000. We expect benefits of pricing and operational actions implemented in 2025 to offset the cost of tariffs in 2026, although we will continue to have margin dilution in the first half of the year. Q4 operating cash flow was $178,000,000 and free cash flow was approximately $165,000,000. Our leverage ratio per our credit agreement at year’s end was 2.5x.

Regarding capital allocation, last year we communicated the decision to deploy the vast majority of our free cash flow to share repurchases. For the full year 2025, we repurchased 4,900,000 shares for $710,000,000, or an average purchase price of approximately $144.50 per share. In total, these repurchases reduced our share count by 9% during 2025. As we start 2026, we have repurchased an additional 1,700,000 shares, approximately $250,000,000, at an average price of approximately $154 per share.

I would like to provide some commentary on our capital structure overall. Our 1% convertible notes matured in 2025, which now results in a higher interest expense of $6,000,000 a quarter. This is a $0.12 headwind to the fourth quarter earnings. For full year 2026, the interest rate headwind from the higher cost of debt is approximately $0.34. The 2026 EPS guidance reflects the benefit of share buybacks from the proceeds of the sale of the 51% of the Residential Kitchen business. We retain future upside through our ownership of the 49% of the business and the $135,000,000 senior note.

Turning to the rest of our outlook for 2026, for ease of communication, we provide this outlook on a current company basis assuming that both Commercial Foodservice and Food Processing remain together for the full year. With that said, we still anticipate the separation of the two segments into separate public companies in the second quarter of the year, and we expect to provide updated guidance for the stand-alone companies at our Investor Day in advance of the separation of the divisions. For Q1, we expect to achieve the following: total company revenue of $760,000,000 to $780,000,000, which is comprised of Commercial Foodservice at $560,000,000 to $578,000,000, and Food Processing at $200,000,000 to $210,000,000. Adjusted EBITDA is forecasted to be between $161,000,000 and $173,000,000, which is comprised of Commercial Foodservice at $142,000,000 to $152,000,000 and Food Processing at $37,000,000 to $41,000,000. Adjusted EPS is projected to be in the range of $1.90 to $2.02, assuming approximately 47,700,000 weighted average shares outstanding. For the full year, we expect to achieve the following: total revenues of $3.27 billion to $3.36 billion, which is comprised of Commercial Foodservice at $2.37 billion to $2.43 billion and Food Processing at $895,000,000 to $925,000,000.

Adjusted EBITDA of $745,000,000 to $780,000,000 is comprised of Commercial Foodservice at $632,000,000 to $658,000,000, and Food Processing at $186,000,000 to $208,000,000. Adjusted EPS will be in a range of $9.20 to $9.36. Please refer to the presentation we have posted online at our Investor Relations website for full details. Please note this guidance does not include one-time costs associated with the completion of the spin transaction, nor does it include stand-alone public company costs for the Food Processing business. We will provide estimates in detail on stand-alone costs we expect to incur along with additional materials in connection with the upcoming Baird Food Processing Symposium in New York on March 5.

I also want to provide some additional color on the shape of the year for Food Processing revenue. As a reminder, we typically see Q1 as our weakest quarter and Q4 as our strongest, with Q2 and Q3 relatively equal in between. We expect 2026 to follow this general pattern. However, in 2026, we expect the sequential increase from Q1 to Q2 to be smaller than the $48,000,000 step-up we saw in 2025. This reflects our expectation that Q1 2026 will be stronger relative to the rest of the year than Q1 2025 was, essentially returning to more normal seasonal patterns after an unusually weak 2025.

Before we conclude our prepared remarks and begin Q&A, I want to provide an update on the Food Processing spin-off. We remain confident in our ability to execute the actions to have a successful transaction. Activities to ensure the spin company will be operating effectively, efficiently, and independently at inception remain on track. We continue to expect to complete this spin-off by the end of the second quarter, ahead of the joint Investor Day on May 12. We expect to file a publicly available registration statement, which will include annual audited financial statements, in April. That concludes our prepared remarks. We are now ready to take your questions.

Operator: We will now open for questions. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. We ask that you limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. The first question today comes from Mircea Dobre with Baird. Please go ahead.

Mircea Dobre: Thank you. Good morning, everyone. I guess where I would like to start is with maybe a little more context on what you are seeing in the CFS segment. You know, you talked about the quarter being better than guided and anticipated. That it clearly was. And you mentioned improved activity from the general market and the dealers, and I guess I am sort of wondering here how much of that was just a return to sort of the normal behavior that we typically see in the fourth quarter from the dealers in the general market.

Going back to the prior call, we were talking about how your guidance at the time did not seem to reflect kind of the more normal stocking dynamics. So I am wondering if that is really what surprised here. And as you think about your outlook for 2026, how do you think about this general market specifically? Can it actually build some ongoing momentum, and all we are really waiting for here is the larger QSR customers to sort of find bottom, or is there something else that you are contemplating here?

Timothy J. FitzGerald: So yeah. Mircea, I think I will kick it off, then Steve will probably pick up. Yeah, I mean, I think we saw continued strength in the dealer market, as I mentioned in the initial comments. I think some of that is fundamentally us gaining market share there, I think, to a certain extent. And then I would say, kind of broad based, we have seen improved replacement demand in the market. I think that exceeded expectations in the fourth quarter because it was very strong in the third, so we did not want to bake that into an expectation of that continuing.

But, you know, I think we feel pretty good about the backdrop of that continuing into next year. Really kind of the inflection is what happens with the chains as we go through the year. They have, we have seen improvement with the larger chains as we kinda went through the year. I think they have reset as they reacted to market dynamics, and we have seen traffic improve, and that kind of gives us some level of improving confidence in that category of the market as we go through next year. I think that is kind of the pivot point to move back into organic growth for the year.

Steven P. Spittle: Mircea, I would just add, specific to the fourth quarter and dealer activity, we commented on prior calls that I do not believe this is the historical, “Hey, it is the fourth quarter, we are bringing in inventory, chase year-end incentives.” That is not what I believe happened. One of the big areas we spent a lot of time leading in with our dealer partners, whether it is training to the MIC, online digital trainings, has really been to get them to think outside of core The Middleby Corporation products. So, right, all our dealers historically know the Pitcos, the Blodgetts, the South Bends.

Where we are gaining market share, specifically the back half of last year, has been getting those dealer partners to start thinking of us for ice—right?—pulling out Follett and Ice-O-Matic or pulling in, you know, Envoking coffee, pulling out TurboChef, pulling in coffee, and then starting to really package and wrap a full The Middleby Corporation solution together. And that is more where I think we saw the positive impact in the fourth quarter, not necessarily the historical norm of, you know, stocking up in the fourth quarter. We just do not see that, you know, bringing in inventory to chase a year-end or beat a price increase. It is just not the way the dealer market is right now.

So we are very happy with, I think, the increased share we are taking in some of those new product categories for us.

Mircea Dobre: Okay. Very helpful. Thank you for that. And then my follow-up is related to your tariff comment on Slide 20 of your deck. And if I understand this correctly, at least the way I read it, it looks like there is about $74,000,000 at the midpoint of incremental tariff drag in 2026 relative to 2025. Hopefully, I have that correct. I am wondering how that splits between the two remaining segments. And it appears that you are saying you are going to offset this with pricing, but there is a bit of a timing issue in terms of how that flows through.

So, you know, I get the question, how confident are you that you will be able to offset this fully for the year? And is this the primary factor that is accounting for the margin ramp implied in the full-year guidance relative to Q1?

Steven P. Spittle: Mircea, it is Steve again. So the split on the tariff impact between the two remaining companies in broad terms is, I will say, two-thirds to 70% of the impact is coming from Commercial Foodservice, and, obviously, the remaining impact from Food Processing. The main split difference there is, you know, Food Processing does not quite have as large of a supply chain base coming from markets like Asia as we do in Commercial. So that is the reason for a little bit of the difference.

We have said that, you know, pricing that we took in the back half of last year, specifically on July 1, and then, you know, we took another, you know, small- to mid-single-digit increase to start the year on January 1 this year. That would cover the impact of the tariffs as we sit here today. We still believe that to be true.

There is some, it is just timing of, you know, when tariffs are hitting, when that pricing starts to or has been flowing through, and that is where you see a little bit of a drag in the first quarter, specifically in Commercial, and obviously improving as that pricing comes through and then you start to overlap, you know, the tariff impact in the back half of last year, which is why you see, or one of the reasons you see, margins improve throughout the year. So we do feel confident. We have taken pricing.

Again, the July pricing has been in place already, and now obviously putting forth another increase to start the year, and believe that will stick as the year unfolds.

Operator: The next question comes from Jeffrey David Hammond with KeyBanc. Please go ahead.

Jeffrey David Hammond: Yeah. Hi. Good morning. Just wanted to come back on the QSR dynamic. One, I think you had some larger QSRs kinda, you know, take a CapEx strike in April. Wondered if that played out, and was that kind of a one-quarter event or does that linger? Two, what are they kinda telling you about store openings? It seems like the last couple years, you know, there was optimism and then deferrals, and what is kinda the update there?

And then just any, you know, as you see some of this, you know, value pricing, you know, better traffic, you know, some of the stimulus coming into the market, like, how is the dialogue changing or not changing around CapEx for your QSR customers?

Timothy J. FitzGerald: So, excuse me. So I think one of the things that we have seen is increasing confidence in the operators as we have come into the year. I think there was a high level of uncertainty and certainly a lot of cost pressures, which, you know, caused them to hold up. I think one of the dynamics that we are seeing is people have a lot more visibility in a better situation in terms of where they are at with menu pricing, profitability, etcetera.

I think that is a much better dynamic, and I think that is going to start spurring the replacement cycle, which we saw some early signs of that in the fourth quarter, so I think that is part of the dynamic. We do still have chains that are on, I will say, CapEx strike, so to speak, as you said.

As we went through the fourth quarter, there were some that were still holding up plans, and I think that is still the case in the early part of the year, but I think we have some good, decent visibility that probably will pick up as we go through the year, and I think that is, you know, reflected in our guidance. Then with the new stores, Steve, maybe if you want to touch on that.

Steven P. Spittle: Yeah, Jeff. So you are exactly right. I mean, as we saw as we went through last year specifically, you know, the new store plans for the bigger, say, top 25 chains definitely pushed out for a number of different reasons. It was, you know, slow traffic. It was being thoughtful around, you know, costs. I think as we move into this year, Tim said it correctly, I still think there is some push-out that is happening on new builds.

And the positive side of that is I actually think it is causing them to go back and really look at their current operations, both from a replacement standpoint but also, I have talked about on prior calls, just making sure that they have a plan of attack to increase traffic through their current footprint, which comes back to increasing dayparts. So, again, that has been a big theme that we have really seen with the QSRs, which I think will continue through this year as, “Hey, how do I get more traffic through my existing footprint?” And a big trend has been beverage.

And you have seen that with some predominant QSRs coming out with beverage programs that they are launching that we are a big part of. And I think why we have been successful just in that aspect, Jeff, is just that they can come to us as a holistic solution to the full breadth of our beverage product, but also comes with the support globally to do installation, to do after-sales service and support. And I think as those chains start to take action on those beverage programs, again, we are very well positioned. So to answer the question, new stores, I think there is still some push-out as this year goes.

It is focusing more back on the replacement cycle, and that is also adding in those dayparts as the year progresses.

Jeffrey David Hammond: Okay. Very helpful. The Food Processing, just want to go to this kinda eye-popping 66% order growth, and just kinda understand how much is just people pausing and now kinda coming back in. Is there some good lumpiness in there? And then just with, you know, the order strength against, you know, 4% to 6% growth, like, why do not we see more of this, you know, order growth drop through to the revenue? Thanks.

Mark Salmon: Hey. Thanks for the question. So a number of factors has affected positively our order intake. The first, our strategy around total line solutions. Customers are going that route, and we see it in the order intake. Another is what you mentioned. Some of the prior slowness of order intakes, especially in the first half of the year, balanced itself with an increasing order intake in the second half of the year. And then the second part of your question is about the why do not we see that in the 2026 numbers? Was that the question?

Bryan E. Mittelman: Yeah. Yeah. Mark, jump in there on the growth, and let me know if I am not addressing your question. Obviously, we had a strong fourth quarter in orders. And as Mark noted, a lot of that is total line solutions. Some of that has a little longer of a delivery tail on it. But, you know, we are excited that we are entering the year with a confident view on, you know, delivering growth after, you know, what has been a little bit of a slow period here. You know, based on the order trends, again, we are looking forward to it being a growth year for us.

Operator: The next question comes from Tami Zakaria with JPMorgan. Please go ahead.

Tami Zakaria: Hi. Good morning. Thank you so much. I wanted to ask about the backlog growth, which is quite impressive, I think up 36% for Food Processing. Just curious, how much of that is deliverable this year?

Bryan E. Mittelman: Yeah. Tami, a significant majority of it is deliverable this year, but there certainly is a minority portion of it that rolls out into the beginning of 2027 as well.

Tami Zakaria: Understood. Very helpful. And if you could comment about your thoughts on broader capital allocation and M&A in particular for the core CFS segment once the Food Processing split is done?

Timothy J. FitzGerald: Yeah. Hey, Tami. So the reason for the split, obviously, as we said, is there is quite a bit of M&A opportunity within Food Processing. Within Commercial Foodservice, I mean, I think the focus is going to continue to be on share repurchases, certainly in the near term. We are really focused on organic growth. We have made significant initiatives or investments over the last several years on innovation, go-to-market strategies; a lot of that we are starting to see play out now, and we also expect it to take increasing traction as we go through next year. That is really going to continue to be the focus. There are opportunities there.

So, I mean, I think as you kind of look over the last few years, we focused on beverage, and we focused on technology—automation, IoT—and areas like that. There continues to be opportunities, so we will, you know, be focused and kind of targeted in those areas which we think will help us accelerate some of the organic growth. Largely, the focus is going to be on the organic growth kind of immediately after the separation.

Operator: As a reminder, if you would like to ask a question. The next question comes from Brian Christopher McNamara with Canaccord Genuity. Please go ahead.

Brian Christopher McNamara: Hey. Good morning, guys. Thanks for taking the questions. First, on Commercial Foodservice, great to see the segment guided positively for both the quarter and the full year 2026. I was wondering if we could peel the onion back another layer a bit. To me, it sounds like this will be predominantly pricing driven. And if so, what is the expectation to kind of get volumes moving in the right direction again? Thanks.

Timothy J. FitzGerald: Yeah. Certainly, you know, we will have price benefit going into the year, but I do not necessarily think all of our expectation going forward is pricing driven. I mean, I think there are opportunities as the market stabilizes and recovers. I think we are very well positioned in our core cooking segment. And I think as we think about ice and beverage, and as Steve commented, there is really significant market share opportunity. So, I mean, I think it will—although it is a meaningful part of our platform today—we really are a new player. There is a lot of new products that have been launched. There is a lot that is in the pipeline.

So, I mean, I think, you know, we are anticipating some organic growth even without big market turn-up in the ice and beverage segment. So I think it is going to be a match of some pricing as well as some organic growth opportunities with volume.

Steven P. Spittle: I would just add, as we think about the three or four big buckets of customers, to piggyback on Tim’s comments, we have commented already on the momentum we feel like in the U.S., you know, dealer/general market/institution and emerging chain business, which I think continues through the year. The fast casual segment, which I think has outpaced, certainly done better than the QSR segment the last year or two, which we are well positioned for. We have talked a little bit more about international growth. I think, again, we are well positioned with a lot of the initiatives we have undertaken in Europe and the Middle East.

You know, Asia had a better finish to the year for us, but obviously still has some, I will call it, geopolitical headwinds, as we do in Latin America. But still, I think we are well positioned in those markets. So it really does come back to the QSR segment as to, you know, where the year potentially does inflect.

And I think our approach to the guidance for the year has been to keep a conservative nature based on where that market is today, but also knowing we are well positioned in QSR, especially when traffic picks up and things turn both with our core business and, as we have talked about, with the additional products around beverage and ice.

Brian Christopher McNamara: Great, just a follow-up on the QSR piece specifically. You had mentioned you are kind of waiting for some of the bigger players to firm up their plans, but they do have, you know, the big players that have reported so far obviously have CapEx plans, unit growth plans out there. So I am assuming there is some give and take, I guess, as it relates to the equipment spend. Is that how we should think about it? And when would you expect clarity on that front?

Steven P. Spittle: So what we are referencing there, Brian, are really, I think, two things specifically: how do new builds progress throughout the year? And I think it is, yes, they all put out their projections that they are pretty open with us and, obviously, what they share themselves. I think the concern there has just been the push-outs we have seen. So I think the firming up is when do we really see those stop being pushed out and actually turn into real builds.

I think the bigger thing that we are waiting for is we have a number of, you know, exciting initiatives and projects with these big QSRs, again, around beverage, around, you know, new products, that again, I think we need to see traffic improve. We need to switch, I think, trends to, you know, CapEx being freed up. Then I think green-lights a lot of the projects that we have in the works. So when we talk about, hey, firming of plans back half of the year, it is really those two areas—new store builds and just some of these key projects getting the official green light to move forward.

For us, it is not a matter of if they are moving forward and are we well positioned, but it is just a timing of when it actually starts to move forward.

Operator: Once again, if you would like to ask a question, please press star. The next question comes from Mircea Dobre with Baird. Please go ahead.

Mircea Dobre: Hey, thanks for taking this. Just very quickly here. So the Investor Day on May 12, can you maybe give us a general framework in terms of what we should be expecting? It sounds like you are going to have both Food Processing and Commercial Foodservice present at this event. I am kinda curious for Commercial Foodservice, maybe more specifically, you know, strategically, are you contemplating any portfolio simplification, 80/20, those kinds of actions? I mean, over the years, you really acquired a lot of different brands. And I do not know if you are reaching kind of the point of stage, if you would, where simplification does make some sense.

Or is there something else from a structural growth standpoint that we should be prepared to be hearing about? Thank you.

Timothy J. FitzGerald: Yeah. Thanks, Mircea. So it is still a ways off, so I think we will provide a little bit more lead-in to what to expect on May 12 as we get closer. Certainly, we will do a deeper dive into kind of the strategic initiatives, our portfolio, some of the operational execution that we have got planned. But certainly, there is a lot of exciting things going on in Commercials. So, I mean, I think there is a great story to tell. And as we get closer to May 12, and certainly at May 12, we will do a deeper dive into it.

Mircea Dobre: Okay. Thank you.

Timothy J. FitzGerald: Yeah. Yes. It will be both Commercial and Food Processing presenting kind of adjacent to each other.

Operator: The next question comes from Brian Christopher McNamara with Canaccord Genuity. Please go ahead.

Brian Christopher McNamara: Hey. Thanks for the follow-up. Just a quick one on Food Processing. Can you remind us how long it typically takes an order to convert to revenues and what the typical range is? It is great to see the quantification on both there. You mentioned most being converted in 2026.

Mark Salmon: Yeah, Brian. It depends on the type of equipment and the type of solution the customer is buying, but by and large, I would say somewhere between six to twelve months.

Brian Christopher McNamara: Helpful. Thank you very much.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Timothy J. FitzGerald for any closing remarks.

Timothy J. FitzGerald: Thank you, everybody, for joining us today. We have got an exciting year ahead. Looking forward to speaking to everybody on the next call. Also, just mention, as we said on the call, we are going to be at the Baird Food Processing Symposium next week. Looking forward to that. I will let everybody know that we will be posting some materials publicly as well in conjunction with that to give a little bit more further information on our Food Processing segment. Thank you. Look forward to speaking to everybody next quarter.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.