The Middleby Corporation (MIDD) Earnings Call Transcript & Summary

Hi, everybody. Good morning. I'm Rebecca Ellin, SVP of Investor and corporate development. Welcome to the Middleby and Madera Investor Day. The agenda for this morning, Tim FitzGerald, the CEO of Middleby, is going to start us off with an overview and discuss the company and industry growth drivers. We also have the entire senior leadership team here that will go through a deep dive of the initiatives that's going to drive Middleby over the next few years. The story that we are here to learn about today is about two industrial technology leaders that are at fundamentally distinct stages of their growth journey, which is what makes this a different kind of spend. At its core, these are two businesses that have a lot in common. They both have an extraordinary heritage, are mission-critical to their customers and have a superior financial profile. After the JV of the residential business was complete earlier this year and the spin-off of the food processing business is complete in early July, we are now at the last step of Middleby's transformation into a pure-play commercial foodservice leader. Middleby is poised to emerge as a scaled platform, an innovation leader and deliver strong returns to shareholders. And to give you a little more insight into Middleby, we have a short video to show you. [Presentation]

I think I'll be walking up to ACDC here, but hopefully, it's a good way to start the day. Welcome, everybody. Thank you all for being here. So we're excited about the day. We've got a lot of great stuff to cover on the things that we have been doing over the last 3 to 5 years, which honestly has been very transformational for Middleby. And we're excited to be at this point, too, also with the spin. As Rebecca said, two amazing businesses with food processing and commercial. So very excited with the future of where food processing is going as well because we've got a great journey ahead and excited for Mark and team to present what that vision is as well. But obviously, we'll be going through commercial in the journey that we are on right now. We have come a long way in the last 3 to 5 years. I think that's one of the hidden parts of the story, which sometimes it's hard to understand, given that we did have 3 portfolios and also our industry has had some challenging dynamics, but if you look at Middleby, where it is today, it is very different than where we were 5 years ago. So I think that's one of the things that we really want to come across today in terms of how we're leveraging scale, the investments that we've made to drive organic growth, and we think we're very well positioned in kind of this next chapter. Maybe just kind of hitting some of the key highlights here. We've got an industry-leading portfolio of brands, and we think we are extending our competitive advantages with really the initiatives that we've taken underway the last few years. And we're accelerating innovation, and we think we are doing that in a very meaningful way. And then we're also driving those innovations and solutions into the marketplace with a go-to-market engine that you'll hear a little bit more about today that we've built. Operational excellence is a competency that we've built up over the last several years, which is starting to take hold, gain traction, and we're confident that's going to give us a roadmap where we have a roadmap to expanding margins. Next item [Audio Gap] the brand has always been very important to Middleby and this spares up with the solutions that we have. So this brand portfolio has been put together over several decades in a very thoughtful and strategic way. The brands are #1 and #2 in the categories that we serve globally recognized that kind of stand for quality and service and I think, importantly, we're packaging these more and more as solutions over time to our customers. That's really unlocking cross-selling opportunities, and we're gaining traction because of that approach in the marketplace. Commercial Foodservice at a glance. I think many of you know, we're a global organization, and it's got an attractive growth drivers. So kind of if you look at the sales by demand, really over 50% of our revenues are coming from recurring base. So it's not only parts and service, but really the replacement market that creates a lot of stability and repeat customers and connect us to customers in a very important way. And then if you look at the sales by product, obviously, the long hallmark of Middleby has really been the cooking and warming segment. But now we're a meaningful player in ice and beverage, and we'll talk about that a bit more today because we see significant market expansion opportunities. So that pie will likely continue to grow. And then I'll just kind of call out at the bottom, like we're very proud of the customer base that we have, so it's a blue-chip customer base that we have is kind of who's who of the industry, and we are partnered with those customers closer than ever before. So I mean, I think as we have broadened out our solutions, we really are becoming in many cases, the most preferred partner and thought leader with those customers. And that's opening up opportunities to unlock a lot of solution selling and additional brands. I think a really good example for that is ice and beverage. A lot of the customers that we've been selling cooking and warming to for a long time are now buying ice and we're engaged with beverage solutions. So that strategy is working and the relationships we have with those customers are very important. The other thing I'd just call out is even though these are large companies, for us, a large customer is only -- there's very few that are over 1% of revenue. So it's a very diversified base as well. And we don't have any customers that are 5% or nearing 5%. So I think that's really one of the strengths of the business is the relationships, but as well as the breadth of the customers. A little bit more on -- we kind of dive deeper into Middleby today by the numbers. Cooking and warming. Obviously, we've got a phenomenal platform here. There are additional levers of new growth that are coming out right now is we've got strong NPI, and we're putting more digital, et cetera, on to cooking and warming. So there is growth avenues, and we will continue to grow cooking and warming. For ice and beverage, we're relatively new on the scene. So we've made significant headway in a pretty short period of time, but there's significant expansion opportunities. And if you look at the margins of the business, which are already very strong, it is still in early stages of our development. So we're investing in R&D, new product launches, commercializing products that are now going to customers. So there's an opportunity for those margins to come up to cooking, and we expect that to happen. I think one of the things also importantly and we'll talk about this quite a bit today is the platform investments that we're making, which are very strategic in nature. So I'll just kind of call it, those platform investments are what the pillars that we've been putting in place over the last 3, 4 years that are driving our engine to drive organic growth across the businesses as well as profitability. And if you were to go back 4 years ago, that number was 0. So we are reinvesting in our business in a very thoughtful strategic way to really drive growth into the next chapter. So a little bit more on that. So this is the $35 million that I had on the other slide. These are the strategic pillars of growth that we have invested in. And we've talked about some of these on investor calls, but I don't think we've really taken everybody through this. So that is one of the things that we're going to do a little bit in ad nauseam today. I'll just touch on those a little bit here, go to market. We really do have new capabilities that did not exist 3 or 5 years ago, they were very much focused on the end user. And we'll talk about what those capabilities are, but they're really driving solutions and innovation into our customer base. Innovation and technology. We're taking it to the next level, really accelerating innovation, but we're accelerating innovation where we think the industry is going. Certainly talk about things like controls, software, IoT and automation, and that's really what fits into that platform. Operational excellence, which is a competency, we've been building up, I would say, we're pretty far along in supply chain, and we're extending that into other areas, and we really believe that gives us an opportunity to expand margins kind of in the next several years. And then the last one which I call the holy grail internally, which is service and aftermarket. So we're building a unique capability and engine here that's tech-enabled, it's dedicated, it's captive service agents to really transform the service relationship. And the journey of kind of that we're going to go on with the customers is really about the life cycle of the equipment out there and service is the biggest pain point for our customers. So if we solve that, that is a big game changer. It gives us -- it's a solution sale across the whole platform. A lot about -- a lot of this here is really about leveraging the scale of the platform. So that is a strategy, and that is sort of -- is what embarked on really kind of as we were coming out of COVID in the last 3 to 4 years, kind of in a very thoughtful and strategic way. The good news on a lot of this stuff is much of this is already in place. Like we are starting to see the benefits and bear the fruit of this right now. And it's hidden in many ways because restaurant industry has been pretty difficult. So it's like taking everybody a little bit lower behind the scenes to understand what we're doing is what we're going to be doing today, which we're excited about. Just talking about the foodservice industry a little bit more backing up. Food away from home has been growing for a long time. So you can see the blue chart is the dollars and it's grown about -- this is over a 30-year period. It's grown about 5% as a CAGR over that period. And then also importantly, the food-away-from-home spend has gone up. So if you go back 30 years ago, its 48%, now it's about 59%. So food away from home is 10% more than what it used to be. That is a long-term trend. We don't see that trend continuing. That is very good for the foodservice industry, and that kind of drives a lot of the category attractiveness into where we play in terms of the installed base and also a lot of kind of the trends and the dynamics that are in the industry. One of the reasons why food away from home is growing is because food is more convenient. You got drive-through, you've got delivery. This all requires new equipment, new solutions for our customers and that's one of the demand drivers. But it is a long-term, stable growing industry. That being said, it's been challenging the last couple of years as well. So as we've kind of gone through, if you look on the left here, this is a real restaurant sales. And we went through, I'll say, the massive whipsaw that we kind of saw in a lot of industries certainly ours with COVID, and then we kind of came out with a very uneven demand cycle, and I'll say, challenged demand cycle really in the last 2 years. So if you kind of look at what happened in the last couple of years. Traffic has been down and probably more importantly, it's been -- there's been a lot of operating cost pressures on the restaurant operator. So in particular, food costs raised significantly, labor has been a challenge. So with combination of the restaurant traffic as well as operator profitability, that deferred equipment demand in the last couple of years. So certainly, we've seen that. The good news, I'll say: a, it's a long-standing growth industry that we're in, we are seeing the beginning of signs of recovery. So as we look at our customers, a lot of the challenges that they were faced with last year. They've addressed those. So like you see value pricing on the menu, you see LTOs driving traffic back in new restaurants, you see menu shifts where they're bringing chicken on the menu, which is more profitable for the operators, they're bringing in beverage, which is very profitable. We're well positioned into that trend. So they're kind of resetting where they're at right now. And you can actually see that in some of the results, if you look at the QSRs in the first quarter, they're in a very different place and seeing the benefits of some of the strategic initiatives that they took last year. And as you kind of look here at what we were seeing in the 0.6 is what the traffic in the real restaurant sales were down. And the forecast is that to return to growth. And even though that doesn't seem like huge swings in percentages, it's actually very meaningful to our operating customers. So it's a little bit of backdrop of what we've lived through in the last couple of years. So now if you take that to Middleby, this is Middleby sales for a long period of time. I've been here through this whole period, actually a few years before. So we have grown the business pretty consistently over several decades. It's a combination of acquisition growth and organic growth. During this period, it was actually 4% organic growth that we have grown over a long period. You can see we kind of came into the COVID period in 2021 that everybody did. And then the last couple of years has really been that restaurant disruption in '24 and '25 that I just talked about. So we experienced the same thing that our customers experience. We are starting to see some of the beginning of the inflection right now. So I mean, I think, we are forecasting and giving guidance that we're going to be growing this year. And some of that is tied to some of the churn in the backdrop of the industry that I just talked about. So now taking it another step deeper. This is kind of what our sales look like by channel last year. And I think it sheds kind of a light on a lot of things. So we were flattish, down negative 2% last year. You can see how it breaks down between chains, the general market, both North America, international as well as our parts and service. I think there's probably multiple call-outs here, but I would say the one big takeaway is like we're a very strong index to the chains. That is by design. Like the chains have been faster growing over time, they are the ones who adopt technologies, which is great for us because we are the innovation player and they grow at scale. We think that, that will happen again. But last year, they were very difficult. And I can tell you, we gained market share in chains last year when we posted down 8%. We have better relationships, we have more products approved in the system of those customers, and we have a strong pipeline. So really, if you look, we had made progress in a lot of areas, particularly in the general market dealer where a lot of the strategies that we're deploying, were causing us to take market share, bring more sales into that market. But chains was really the headwind. And so I kind of call and some of you have heard me say this, this is where we're losing where we're winning, right? I think long term, we win here, this will inflect, but this is really what we were impacted by last year. So I don't have it broken out in the first quarter. But in the first quarter, we just reported 8% organic growth. So what changed? It was the change. I mean there's maybe a few other pieces, but it is really the chains turn back positive. We were already had kind of ahead of steam in the general market, we were outperforming what we think a lot of the indicators were there, but chains as they kind of come back all of a sudden that a negative turns into a positive and then the number on the right changes pretty significantly. There's a lot of trends in the industry. I can go through for a long period of time, but I'll kind of move past that right now, but I would just say we're very tied to the trends whether it's chicken, beverage, automation, et cetera. So maybe going to size and scale a bit of the market that we are in. So the overall commercial foodservice market, so this is kind of the restaurant sales globally, is about $4 billion. And the equipment market that supports our customers about $43 billion, of which $13 billion is in North America. So Middleby is $2.4 billion, so it's roughly 5% market share overall. It's a higher market share in the U.S., but it is a large global market, we are operating at scale. We're one of the top operators, but there still is room to grow through market share gains. And then taking it down a little bit more in really the markets that we serve. So this is cooking and warming. So we're $1.6 billion in sales. The TAM in North America for cooking and warming is about $4.5 billion, and then globally, it's $16 billion. So just kind of shaping out the size of the market. And then you can see the categories that we play and how that kind of fits within our Middleby wheel overall as well as our position. So we are #1 -- #2 in most positions. There's a few that we're not, and those are targeted growth opportunities for us. But kind of as we look at where we play, we're really heavily focused on the faster-growing parts of cooking and warming. So that is automated cooking. We talk about that a lot and ventless rapid cook. Both of them are on trend, as you would imagine, because they're solving labor needs, they're smaller kitchens, speed of service is very important. So that's why those are faster growing segments. And we're extremely well positioned in those areas and will benefit as those segments grow. But also, as importantly, just because we're very strong in many of these categories, there are still market share opportunities that we're going after. In ovens, it's really -- we lead really in convection ovens, but there's a market called Combi ovens, we are not the leader. Now we just came out with a new product that is a targeted market of growth, and that's a meaningful TAM within the $4.5 billion and the $16 billion that we will be going after for the next several years. And then you've got warming and holding, which is a pretty big category as well. And just as we are selling solutions more and more, bringing things together, warming and holding goes very naturally and with cooking solutions, and we're gaining share in that area as well. So we've got story of faster-growing markets and market share opportunities here as well as other things like controls, IoT, et cetera, that will drive and accelerate growth across all the categories, including fryers, ranges et cetera. Now taking a little bit of the same slant at where we're at with ice and beverage. So ice and beverage, what's interesting to me, and hopefully to all of you on this, it's actually a bigger TAM. So it's about the same in North America. It's slightly bigger internationally. So we're going after a large market, and our objective is to have similar market shares, frankly, in ice and beverage. And I think we've made a lot of runway actually already. We are a player, I would say, innovation and beverage is not necessarily on this slide, but we actually have the broadest portfolio of solutions and it's really the most innovative and tech-enabled solutions in ice and beverage. So we're very excited about where we're at with this platform. I'm just kind of calling out a couple of things, even though, we are actually a large player in ice, we're one of the biggest right now, but it is also interesting because there's really two categories. There's nugget ice, which we are the leader and it's a faster-growing spot, but the bigger category in ice is cubed dice. And we're a new entrant. That was an acquisition. We came out with a full-line solution. So despite the fact that it's a big part of this wheel and we've got a market-leading position already today, there's significant market share opportunities still. And then beverage, dispense and coffee, which I think we'll hit quite a bit today, including some exciting products that we have out in the hallway there so you can visualize actually what we are doing, we're kind of new on the scene. So we are the disruptor, those are both big market segments. There's a lot of trends that are tied to beverage dispensing and coffee and we're going to be going after that over the next several years, so expecting to grow. Okay. So hitting financial outlook pretty quickly. Obviously, Brett will cover this in detail, but what does all -- some of this mean, we're forecasting over the next several years, our guidance is 3% to 6% organic growth. About 1/3 of that is coming from the market recovery, market demand, which includes both price and volume and then 2/3s is really kind of the self-help initiatives, which is our driving innovations and our go-to-market initiatives are really going after some of those market share. opportunities that we're well on our way. We do expect to expand margins kind of, as I mentioned, 200 to 400 basis points, about 1/3 of that is also volume driven, but a lot of that is our operational initiatives, we expand margins kind of across the platform. And then as I mentioned, a hallmark of strong cash flow, which we're going to redeploy that really kind of translates to double-digit EPS growth. So digging a little bit more in setup for the team is kind of we talk about how are we approaching growth and what are we actually doing. These are kind of -- this is really our strategy here. So the first is driving innovation. So we lead in innovation, but we are taking it to another level. Selling our portfolio as solutions, which is not an approach that we had 3 to 5 years ago, we're doing that very effectively today. Expanding into new addressable markets. It's really the ice and beverage that I talked about. But there's also international where you saw we have some of that white space. We've made significant investments in international over the last several years. And then leveraging our go-to-market engine, in which we've built out, and that is gaining traction and kind of the last piece here is really driving operational excellence across our business units. I'm going to talk briefly about the 4 and then we're going to go kind of in a deeper dive. So what is accelerating innovation. We've made significant investments in our capabilities over the last handful of the years. Some of these were acquisitions we bought controlled companies, software companies, we bought an IoT company. We have embedded capabilities in Middleby. This is part of the investment that I put up there early on. Our competitors do not have these capabilities. And it's unique to say, hey, we've got a connected device, but it's very different to have a business that's focused on it every day. That's a sustainable model and it's, I'll say, far ahead, I'm pointing out Open Kitchen in particular because that allows us to scale leverage of the platform and really bring a solution with many products tied to it into our customers that drives a high ROI. But I would say all of these solutions here and capabilities are accelerating the pace of growth. So a lot of the NPI that James will be talking comes out, we would not be able have that pace of NPI. And it's game-changing NPI if we hadn't made these investments. So we're taking innovation and accelerating it to a next level. Go to market. Some of you have seen this slide before. We kind of beat on it, but this is a real thing. This is not just a concept, like these are people and teams and capabilities within Middleby, where we're really focused on the end user customer, and we've really retooled the organization, whether it's our selling organizations, our innovation kitchens, which many of you have seen. Those are easy to see because they're on video. But alongside that, a culinary team, which Middleby did not have a culinary a number of years ago, when we went from last to first. Digital marketing, which is the way of the world, and I think we're doing game-changing things there. And certainly, our key account management with our national accounts where that's really building a pipeline and how do we bring innovation in into those customers really as partners. So a lot of exciting things here that Steve will go through. And then on that wheel, but kind of as I mentioned before how do we go after the service market. So this is a little bit behind where we're at with innovation and a little bit behind where we're at with the go-to-market, but it is in flight, like we have developed a tech-enabled service stack. We are retooling our service agents, which again are dedicated in their captive, and we are going to have a reimagining service, and we're going to be providing a differentiated platform, which is a simplified platform. It's really data driven, and again, the way I think about it is we're going on the journey with the customer on the life cycle of the equipment. And I think that opens up more equipment sales, I think it opens up, obviously, different revenue models as we think about managed service programs as well. And then operational excellence. I mean this really started with supply chain, which kind of hit right at COVID when we started. So again, all those folks have been on defense Initially, it was, hey, we couldn't get new products and then it was, hey, everything skyrocketed with inflation and then followed by there's a whole bunch of tariffs and then the tariffs change every quarter, including this last quarter. So we are going to reposition from defense to offense kind of over the next several years, but they really did build up some strong capabilities over the years as well. So as we really leverage supply chain, we see cost savings opportunities. And then there's significant other areas that we really built up tools and capabilities. These are, again, people and teams that are focused on product line simplification, design manufacturing and how we do product teardowns. And we're just starting on our journey of lean manufacturing, which is a unique journey because it's -- we brought a lot of people from the outside, they're focused on Industry 4.0 that are really tech and digitally enabled. We think all this can drive 300 to -- 200 to 300 basis points. The last thing I'm going to talk about here is AI. AI is just a topic. So I really wanted to make sure the audience know, AI is real within Middleby. We started this journey two years ago. It was where we kind of identified what the high use cases were within Middleby and then really started to take an action. I think one of the big things with AI is making sure, especially when you have a diversified portfolio, how do you get all of the data accurately in the same place so that you could use that as an engine for AI to run a lot of initiatives over. But I was just going to leave you with a lot of these initiatives are in flight or already out there, and we're using them commercially. I would say, the service platform is going to be hugely AI. It will be a huge engine for that. We're doing a lot of that commercially today, including in kind of our sales tools as well. So I would just say, I think, we -- our objective is to use this as a competitive advantage and be ahead of others in the industry, and I think we're well on our way. Just want to talk about some of the principles of Middleby that is very core to us now, which a lot of this has to do with focus, and it has to do with leveraging the platform at scale. So obviously, the first thing is really having strategic focus after this transaction. You have a commercial team that is very much focused on this business every day. And that is going to drive benefits. And the -- as you kind of think about the customers, the platform innovation, the operational simplification and service transformation, those are our growth pillars that I went through there, too. So really, if you think about that also a great deal of focus where we're leveraging the scale of the platform, we think that we're going to have much better execution because of the way we're approaching the business and approaching the market and then just portfolio discipline. How do we keep going every day after products, customers, drive simplification to make sure we're investing dollars and time to where we need to most. And last slide here as I've already started to run over. You can't do it without a team. I'm very proud of this team. I can confidently say this is the best team in the industry. I don't think I'm being arrogant by saying, it really is the best team in the industry. It's been assembled over time, that executive leadership team, it is very commercially focused. We are operators. We are frontline. We know the customers, we know the products. So it is a very good team to lead this next chapter. But we've built out the team around us as well. So like we have great leaders across the business. And as we've talked about strategic initiatives, we have new seats, right, because we didn't always have somebody leading channel or chains or service, et cetera. So like we have -- I -- my only disappointment is I should have a whole bunch more names on here, by the way. But as you kind of look at some of the faces up here who have a tremendous amount of experience. Some of them came from our competitors. We still all the best, some of them are sitting here in the front row with them are with us today here, but they're leading our market expansion efforts such as in international, leading our go-to-market as we kind of think about chains and channel partner, what are we doing to transform service, leading the world in digital and in operational excellence, right? So we have people who are focused on initiatives. So I mean, I think that has been part of the transformational journey too, really is to rebuild the structure of the organization so we can execute on all this and really we can kind of surge in our growth strategy. Okay. So with that, we're going to move on. So we'll be talking about a lot of these strategic pillars here. The next one up is go-to-market, which Steve Spittle, our Chief Commercial Officer, is going to cover. Thank you.

I thought we were chest bumping. I know I think you missed the memo coming up or you forgot. So good morning, everyone. I think everybody needs to go hit the automated beverage and get recaffeinated outside with the Middleby equipment we have. So it's great to be with all of you this morning. I'm excited to walk everybody through all of our go-to-market initiatives that Tim was referencing. What was so exciting is so many of these initiatives are either brand new or have been completely reinvented over the last 3 to 5 years. And what is the most exciting is we're seeing those go-to-market initiatives start to pay off in customer wins right now in real time, but also setting us up for what we feel is a great run of growth over the next couple of years. As Tim mentioned, it all starts with a portfolio. You can have the best go-to-market strategy in the world, but if you have the wrong brands, the wrong products, or in our case the wrong portfolio, I guarantee you it will fall short. And so we're very fortunate that our portfolio at Middleby is our competitive advantage. It obviously starts with the core cooking brands. On the left-hand side, the brands that have been in Middleby for pretty much from day 1, the Pitcos, the Blodgetts, the Southbends, the core cooking brands in our portfolio. But then, it's been complemented now with the expansion into ice and beverage. And why does this matter? It gives us the full range that we can go to any customer, any kitchen and do everything in the back of the house. And fundamentally was that gets you, it gets you closer to your customers. You're close to your customers. What does that lead to you're going to gain a bigger share of their spend. Tim referenced this earlier. We've shared this slide before. This, to me, represents everything I'm going to talk about, everything on the right-hand side of the wheel are all the go-to-market initiatives that we have been working on over the last 3 to 5 years. These are all about how do we make it easy to do business with Middleby for ultimately that end-user customer. The customer that is working the fryer, the customer that's loading a TurboChef hub and the customer that's dispensing Follett ice, how do we make it easy for them to understand and navigate Middleby. All of these go-to-market initiatives do one fundamental thing, and that is move us from being transactional with our customers, to be more consultative with our customers, and I can't stress that enough. I want to start with an explanation of the foodservice channel. I think we all take it for granted because we live it every day until you put up on a chart and it looks somewhat complex. I will walk you through it. But I would say from a high-level standpoint, even though there is complexity in what this chart looks like, I can tell you the Middleby approach to everything on here is incredibly well orchestrated. It's not just a portfolio of brands, they're off doing their own thing. Everything up on this page that I'm going to walk through is highly coordinated across all the various channels. On the left-hand side, it starts with our brand sales team. So this is our individual brands, the Pitcos, the Blodgetts. They are working very closely in the U.S. with our manufacturers rep groups, which I'm going to talk a little bit more about our frontline selling organization. Those manufacturers, reps, along with our sales teams are calling on the consultants, which I'll talk about, the dealers, which is our transactional arm in the U.S., ultimately servicing again that end user in the middle of the circle. As you move over to the right, again, I'll talk more about we have a dedicated national account team that again is on point for all of the big accounts over on the left hand side of things. Their goal is to again make it easy to navigate Middleby, make it easy to sell the complete portfolio and solutions that we have. And so now I want to move into some of the areas that we have on the left-hand side, and it starts with in the U.S., our frontline selling organization, which is our manufacturing rep partners. This is our true extension of the Middleby selling organization right? This has gone through a tremendous journey over the last several years. Going back not that long ago, we actually had 156 rep groups across the entire country. As we did acquisitions, you'd have more and more groups come in, but what that led to is if you were in a place like here in New York and you wanted to open a restaurant or you were a dealer that wanted to specify a project and you want to use all Middleby, you were literally going to 5, 6, 7 different companies to help you do that. It was incredibly complex to work with Middleby. So we knew we had to do something different. And over the course of these last several years, we have pared it down to having a dedicated consolidated rep in every market. Now we're down to 16 groups because even over time, we fine-tuned it more and more. We've gone intentionally after we've taken the best reps from Welbilt. We've taken the best reps from ITW. We've taken the best reps from Ali Group, and that's the group you see on the page today, 16 of, by far, the best manufacturing rep groups that are in the industry. Why is that critically important? Because it becomes an extension of us. Just like us, they're selling the complete portfolio of brands. They've made their own investments in their own people. You can see just in the last couple of years, we've averaged 20 to 25 additional reps on the street with our manufacturer rep groups. They've invested in culinary experts. They've invested in beverage specialists. They have truly become an extension of Middleby. The manufacturing reps specifically help us call on our dealer channel partners, right? So again, this is the transactional arm of Middleby in the U.S. And again, this, just like our reps has gone through a tremendous journey over the last several years. In the U.S., there's roughly 400 dealers across the country and at various stages, we transact with most of them, but we took a very specific approach over the last several years to intentionally go after the top 25, knowing that, that is the group that drives volume and controls mix better than anybody else. And you can see these are some of the biggest dealers up on the left-hand side and the top buying groups that were the right side. And as we've leaned into this group, we've leveraged our innovation kitchens for training. We've given them dedicated resources like their own commercial app. We've given them an e-learning platform with Middleby University to help better understand Middleby. And what does that ultimately lead to? We want those dealer salespeople, not just be order takers but to become, again, Middleby extensions of our sales team. And I can tell you, we have never been more aligned with our dealer partners than we are today, and you're seeing it happen, especially these last several quarters, as the business, and this primarily is focused on the general market that the dealers' coverage general market, it's institutional, it's emerging chains. Where we are winning because how we've leaned in is these dealers historically, yes, they buy the Pitcos goes, they buy the Blodgetts, the core cooking brands. But now because of how we've leaned in and we're selling the portfolio, now they're pulling in ice, they're pulling in the TurboChef, they're pulling in Combi. And so what maybe on a project would be 3 or 4 Middleby brands has now become 5, 6 or 7. If there are any kids in the room, I just said 6, 7 I get harassed from my kids. The point is like we are gaining more market share with our dealer partners than we have had before, and it's been very intentional. And again, you'll see it happen in real time. One of the areas we probably haven't talked quite as much about is the role of consultants in our go-to-market strategy. So this is really the farthest upstream in the selling process that you can go. So consultants are the ones they are specifying could be large stadiums. It could be B&I-type applications. A consultant comes in and they specify cooking equipment, they specify the HVAC, they specify the utilities, they do the layout of the kitchen. And then it goes from the left-hand side of doing that design process all the way through a bid process with our dealers and then ultimately to an order. And this process that represent up here can be 12 to 18 months. So going back a couple of years ago, we frankly did a horrible job calling in the space. We didn't have a presence. We weren't focused on them. But today, we have a dedicated team that all they do is focus on consultants. So I feel like we've gone from probably being one of the worst being the best short period of time because I know if I can drive the specification here to our brands, to Middleby portfolio, to pull in the additional brands we've talked about, the likelihood of it leading to an order downstream gets obviously greater and greater. So tons of focus from our team, a dedicated team focused on the FCSI consultants. And again, it's roughly 1,500 around the world. So, so far, I've covered off the left-hand side, going back to the channel of, again, us, our manufacturers reps consultants and dealers. Now I'm shifting over to the right-hand side of the column, which is our global national account team. So this is the dedicated Middleby team that's focused on 4 specific areas of customers. Number one, the big global chains, which I'll talk a little bit more about. Most recently, we have team focused on aggressive growth accounts. So these are up-and-coming emerging chains could be anywhere from a couple of locations to a couple of hundred locations, but the goal is to get in early with them and ride them up as they grow and to get them thinking Middleby from early days. And then the last 2 groups are retail grocery and then the ever-evolving world of C-stores, which I'll talk a little bit more about. This group, just like our reps, just like our dealers is very focused on selling solutions, selling the entire portfolio and that is what this team is all about. We've been very intentional about the people that are on this team, many of which have come from an operator background. They have done what our customers are doing in prior life. It gives them tons of credibility, but also finding the right people that are hungry and aggressive to go after new business, not just farm existing accounts. And so you may be saying, hey, Steve, everything you've gone through it sounds great, dedicated team selling solutions. Maybe it sounds pretty hypothetical, but let me give you a very real world example. We're very grateful to Yum! and to KFC, first of all, for letting us share, this partnership that we've embarked on over the last several years. So this all started with KFC approaching Middleby about 18 months ago. KFC has been a very good, longtime customer of Middleby for decades. And they came to us and they said, "hey, we are interested in adding a new beverage platform to our restaurants." I have to be honest with you. I think our first reaction was wow, like are you crazy, like we did not expect the KFC to come to us with something like this. They said we do not know how to do this. We know we need to do something to drive additional day parts. We know we have to drive additional traffic. How can we do this? We started at the Innovation Kitchen in Dallas. The Middleby team, the Yum! team, some of their suppliers on the actual product side, we literally sat in the ad hoc kitchen in the Innovation Kitchen and started working on how could we bring this idea of this concept to life. We did testing in Dallas. We did testing in our Innovation Kitchen in the U.K. And the end result is what you see on the right-hand side, a complete Middleby solution that tailored for doing milk shakes, complemented with Flavor Burst to do different type of flavors. Marco doing the dispense for their coffees, their lemonades, refreshers, TERRY Water Solutions doing the filtration and then QualServ building the complete bench on the right side. KFC would not be doing KWENCH if it was not for Middleby. And you can go find it, they're very public about where they've rolled it out so far, which has primarily been in Canada, the U.K. and Australia. You can see their goals, you can see their targets for this. It is having a meaningful impact in those markets in KFC. And so I would go back to why is everything I've just talked about so important? Let's walk through the scenario. If we don't have the relationship with KFC, this doesn't happen. If we don't have the innovation kitchens in Dallas and in the U.K., it doesn't happen. If we don't have the portfolio of beverage brands to complement the cooking brands, it doesn't happen. If we don't have a global network, which I'll touch upon from Taylor to do the delivery, the installation, the actual sales service, it doesn't happen. There's no one else in our industry that could have done this. And we are delivering this in real time for KFC. So a huge win for Middleby, a huge win for KFC. I couldn't be more excited about where this is going. Think about this with other QSR segments, you're seeing more and more beverage coming to life. Think about other areas where you see beverage is not just a concept. It is happening in real time. One more case study just to round it out in the C-store market, a little bit different case study where we were approached, again, through a channel partner to work with an emerging regional C-store operator. If you haven't been to a C-store recently, I will tell you, it is not the good old days of roller grill hot dogs and bad coffee. It is a very good food service experience and the leading C-stores have heavily invested in premium beverages. But this C-store, in particular, knew that they were behind and they knew they had to do something different. Their channel partners said you have to come talk to Middleby. And so again, we came to the MIK, we brought them to the MIK. We did testing across the beverage portfolio, across [indiscernible] portfolio. It started with rolling out the Concordia coffee machines, which are on the left side, eventually rolled out the TurboChef ovens for food service and Follett ice. The coolest thing in this scenario, which was a great case -- makes a straight case study is the operations team with C-store after we actually rolled out the equipment said, "Hey, it would really be great if we could understand better what's happening in the stores. How could we see what's happening with the coffee machines, TurboChef ovens in real time?" And we said, "Well, we have a solution for you. It's called Open Kitchen." And so we actually went back with them and we installed Open Kitchen on all the equipment, very easy to do in the field. And now in real time, they're seeing everything that's happening with their equipment in the rest -- or in the C-stores. So again, a great example of working with a channel partner, taking our core cooking equipment and layering in unbelievable technology. Again, nobody else could do this except for Middleby. Just jumping over, I've primarily been talking a lot about our domestic footprint, our domestic go-to-market strategy, but I would certainly be remiss in not highlighting everything that we have done to expand our footprint from a global standpoint. You can see the orange dots represent all of our major sales and distribution offices across the world from obviously, Latin America, Europe, the U.K., throughout India, the Middle East and multiple locations in Asia. I can tell you, our international teams have never been stronger, and there are so many opportunities for us. One, as the global chains continue to grow, a lot of their growth, let's go back to KWENCH is in international markets. But there are so many emerging chains, chains that nobody in this room has ever heard of that are growing in places like China, in places like Europe, in places like Brazil and making sure we have the right people, the right resources, the right innovation kitchens in those markets to support that growth has been critically important. So we are on a journey for sure internationally. In some ways, even though we have many of these offices, I feel like we're early days in the opportunities that we're going to unlock in the international markets. And I'm going to talk a little bit about the innovation kitchens on the next slide. I would also be remiss in not calling out specific to our China facilities. We have 2 manufacturing facilities in Qingdao and Zhuhai, where we are operating world-class manufacturing facilities. They're building Middleby brands, Middleby brands that we're selling both local in Asia, but we're also starting to sell -- support our customers in some international markets. So really starting to leverage the investments we've made in those China facilities. Middleby Innovation Kitchens. We've talked a fair bit about this. It's hard to believe the flagship Middleby Innovation Kitchen in Dallas just crossed our 5-year mark, and we just crossed 45,000 visitors that have actually been through the MIK. It is by far the best way to experience Middleby. You can see all of our equipment. You can see everything together. You can see the solutions that we're talking about as it comes to life because of a world-renowned culinary team led by a certified Master Chef, Russell Scott. The opportunities that have come from having the innovation kitchens are measurable. I go back to KWENCH. I go back to C-stores. Those do not happen if we do not have the innovation kitchens. Based off the success of Dallas, we have taken the similar blueprint. We've opened the facility in the U.K. where Middleby U.K. is headquartered up on the top right. And then the 3 in Europe have been the last several years. Madrid, Spain, the first one. And then last year, opened our very first location in Germany, in Munich and then the Venice, Italy facility in conjunction with the food processing team, which we'll talk a little bit more about. This has become part of the Middleby DNA, right? We've proven it time and time again. There's no better way. It's great to go to a trade show. Yes, you can learn. Yes, you can go to website. Yes, you can read about Middleby. There's no better way to experience Middleby than the innovation kitchens. And every day, there's a building pipeline of opportunities that come from customers and channel partners that come to our events. My last area going around the circle, I know I hit everything pretty quickly, is digital sales. And Tim says a lot, when you think of digital sales, people say digital marketing, I think everybody says, okay, hey, do you have a nice website? And yes, we have a nice website. So it is important. But we have invested a dedicated team, a team that has a tremendous background in all things digital. One of our biggest investments, it's not the most s*** thing in the world, but has been the investment in our PIM, our product information management system. Think about all the brands we have in our portfolio, all the products, how do we make sure that we have all of the information from a digital perspective for those products in one location, one source of truth that just makes it easy to interact with Middleby from a digital perspective. And that PIM now powers everything on the right-hand side, our app that we've given to our customers, our websites, you go through the SEOs, our product catalog. But the most exciting thing that the digital team has recently launched is what we call Middleby Shop. I encourage you, the website is at the bottom of the screen, shop.middleby.com. We launched this in September. We know that there is a continued growing market of customers out there who want to find Middleby online, right? They know they want to buy a Pitco fryer. They know they want to buy a TurboChef hub and they go online to try to figure how to buy that. But then oftentimes, they can get lost into the world of e-commerce. So how do we make sure we grab that customer, we make it an easy experience. They better understand Middleby, but how do we make sure that eventually leads to an order as quickly and easy as possible. So that is where Middleby Shop comes in. Today, if you go to middlebyshop.com or shop.middleby.com, you can learn about every product in the Middleby portfolio. It helps you select the products if you don't know what you're looking for. You can engage with Grillbert, our AI-based customer service agent. And fundamentally, you can go in, select the products that you're interested in, build your own cart and then it seamlessly works with our reps and our dealer partners to convert that to a quote and then it's the easy button to go hit the Order button. So we're shortening the time from interest, to quote, to actual order shorter than we ever have before. And I can tell you, I keep saying today, there's nobody else that's doing this in our industry. There's nobody else that could do this in the industry for 2 reasons: One is the investment that we've made. You have to invest in everything behind the scenes, which we have. But two, you have to have the right portfolio of brands to do it. And again, this is incredibly powerful, the information we're gaining from customers, the data we're collecting from customers, but most importantly, like all of these initiatives, how are we being easy to do business with to fundamentally gain that order and gain market share. And so I guess just to wrap it up, I know I hit everything pretty quickly, but I fundamentally do believe that we are taking market share across our respective customer markets. We're gaining momentum with our go-to-market initiatives. And I think, again, it's being driven by several specific areas, the portfolio depth, number one; a global selling organization that's aligned across markets and channels; proven integrated solutions, helping customers grow and evolve; the Middleby innovation kitchens, which we talked about has become part of our DNA; every day, customer visits are driving real opportunities; and then lastly, the digital platforms. They're not just a nice website, but a strategic part of our selling team and initiatives driving new opportunities like Middleby Shop. I can tell you, I've been in Middleby for 16 years. I can tell you without question, without question, our selling organization and our selling initiatives have never been stronger. And I'm very excited about all the work we've put in now starting to pay off and very excited about the future. So thank you very much. Very pleased to introduce my colleague, James Pool, our Chief Technology and Operations Officer.

Good morning. I'm going to hit 3 main topics today in my 20 minutes that I'm going to be with you, or 25 minutes. First is our ability to accelerate innovation at Middleby, which is fairly unique. And that allows us to drive a tremendous number of new products into the field every year. Secondly, I'm going to hit our continued investments in connectivity and also our investments in trying to digitally automate the kitchen. And lastly, I'm going to cover our efforts to reimagine service and our journey to improve our customers' experience with the Middleby product. So let's dig into innovation and talk why we're able to innovate so quickly in Middleby. So we'll hit the, what I like to call, the Middleby innovation ecosystem. Our ecosystem is really strategically derived from 2 factors: Number one, our acquisition strategy; and number two, our continued investments in technology platforms. And these are what help fuel innovation at Middleby. Because we run our brands and our engineering departments decentralized, innovation starts at the brand level, right? So every new product we have coming out is coming out from a brand. And this is because the brands have the deep-seated knowledge of how to innovate the best fryer, the best combi oven, the best rapid cook oven. They have the know-how, they have the show-how and they have access to the IP to drive innovation through their organization at a rapid rate. Now once we decide to do a program, meaning we've looked at the development, we've decided it provides a meaningful customer benefit or ROI and a meaningful benefit for Middleby, then we start to layer on these technology strategies to the development program in order to fully further accelerate the innovation. I like to call these technology synergies that we layer on our Middleby technology toolkit. And we have 5 tools in the toolkit. The first one is our common controls platform. This platform started in 2020 when we went to go standardize controls across all the various Middleby brands to give the small brands, the big brands access to the latest technology, the best UX and UI. And this has driven a lot of benefit and acceleration in R&D within Middleby because now our brands don't have to spend time developing a new control for every project that they undertake. Now invariably, they're going to have to adapt the control to the new technology, the new product that they're innovating, and that's where our company Blue Sparq comes in. Blue Sparq is a team of 30 engineers outside of Coral Gables, Florida, and they specialize in hardware and software design. And so they can take the brand's innovation, they can take our common control platform and adapt it to the new technology. Now in some cases, our company control platform will not be adequate for the new innovation. In this case, we have the ability at Blue Sparq to redesign the hardware, redesign the software platform and we can even bring that to production in low to medium scale. Open Kitchen, that's our investment in IoT. Every new product that we have coming out of Middleby is IoT connected, and this is going to be important -- in a minute -- and I'll get to that here in a second. Middleby Global Engineering. This is a group out of Bangalore, India, that allows our engineering teams to kind of flex up and flex down on engineering hours as needed. And then finally, our secret, secret weapon is the team at Newton CFV in Sebastian, Florida, where they are helping us innovate the latest beverage dispensing technologies on the market today, which are helping us future-proof beverage dispense for the industry. Give me one second here, I need to take it [indiscernible]. Middleby, what does this mean for our customers? Number one, it means that all the technology in Middleby is organically grown. We own all of our IP, and we're able to readily support IP. A lot of times, when you rely on a third party to develop IP and you need support on that IP, their priorities don't align with your priorities and the project is delayed. Next, I talked about Open Kitchen and the benefits that, that brings. When we develop a new product, I said it was connected. But when we test that product, it's also connected. So our engineers are looking at that product development in real time. They're looking at the experience of that product in the field, and they're solving problems almost immediately and continuously improving that product. And then many times, they're doing that without the customer even realizing that there is an issue because we're getting the data and we understand what's going on with the product in the field. Next, the Middleby customers -- our customers really trust our innovation and they trust our process. Now we have the brands to thank for that, but we also have Steve's global account team to thank for that because they come in and help us manage that relationship between the brand and the chain during the testing process, thus helping us streamline communication and very rapidly get that product into approval so we can be selling it to the chain. I talked a little bit about Middleby Global Engineering, a group of 50 engineers in Bangalore, India. And these engineers are there to help the brands with new product development, sustaining engineering, cost-out activities. They also have 15 full stack developers on the team in India. And these full stack developers are helping do a lot of the digital work that Steve talked about from the PIM to Middleby Shop. The other big benefit is with our team in India, we're able to do follow-the-sun development. While we're working, they're sleeping. While we're sleeping, they're working. So we can really double time the engineering hours and crank through projects much faster with the team in Bangalore. Now to the fun part. I love talking about innovation. We have a ton of new products coming out, both on the hot side, cooking and warming and on the beverage side. It's actually a record number of new products and a record number of award-winning new products. I don't have time to go through each product because they're only giving me 25 minutes. I can really geek out and spend 25 minutes on each product. But we have a great innovation video playing out in the lobby. So I would encourage everybody to watch the video because it goes through each one of these innovations one by one, gives you features and benefits of the product so you can better understand what's going on. The other thing that I want to point out is these aren't just minor improvements to an existing design. These are really fundamentally new innovations that bring a tremendous amount of automation to the kitchen to provide our customers that benefit to where these products drive meaningful ROI. And I'm going to jump in. I get a pick a favorite now. Everybody would normally think I would pick TurboChef because that's where I grew up in the industry. But I'm going to pick the Pitco TorQ Fryer. This is the first ever commercialized continuously filtering fryer on the market. So what does that mean? That means as we're frying, we're continuously filtering the oil and filtering that particulate out of the oil. It's the particulate that denatures the oil, causes the oil to go bad and thus for you to have to dispose of the oil. A traditional fryer, you fry, you filter or maybe you don't filter, you fry, you filter, you have to pump that oil back in the other fryer. And so it's a process. And depending on how well you filter or how often you filter drives the life of your oil. But since we're continuously filtering in the TorQ fryer, we get near infinite oil life, thus driving oil savings and a massive ROI for our customers. I really do believe the TorQ fryer will change frying in the commercial food industry for freezer to fryer type products and very excited about it. I'm pretty excited about everything else, too. The beverage innovations. We have 6 groundbreaking beverage innovations coming to market. I would like to point out, one of them has been on the market since the beginning of 2025, but the other 5 on the screen have either just come to market or will be coming into the market at the end of the year. And every one of these products on the screen have a tremendous amount of customer interest or pent-up customer demand behind their launch. Again, these are all part of the innovation video in the lobby. So again, I encourage you to see that. But we also have someone special in the lobby. We have Gillian Callaghan. She is the President of Newton CFV. Remember, they were that fifth tool in the toolkit, that company in Sebastian, Florida, that really has helped us unlock beverage dispensing technology by developing a unique valve that future-proofs beverage dispense. She can talk to you about the 3 products we have in the lobby, the, SYPP, the Gravity and the FizzBot. So please, when we're done, spend 5 to 10 minutes talking to Gillian because she'll be able to go through these products in great detail. Well, the one that I'm going to pick on or talk about is the new NexGen FDM from Taylor. This is a new innovation that the Taylor team really did such a good job on in driving through so many innovative new features to this product. It literally doubled the cost of the product for the customer that we are developing it for. But even with all that technology and the features and benefits that we add and the cost that we added to the product, the customer is still seeing a less than 6-month ROI on this product that costs twice as much as the product it costs. And why is it doing that? It's doing that because of the automation that they've embedded in the new NexGen FDM. That automation is all around cleaning and operation. On the cleaning side of it, they've increased the time between deep cleaning breakdowns from 28 days to 96 days. So that means you only have to break this machine down and clean it every 96 days, up from 28 days. We've also reduced the daily clean cycle by 50%, down from like 4 hours to well under 2 hours. And then lastly, with the new cleaning features, we can now dispense product while the machine is being cleaning, which allows our customers to dispense product at a near 24/7 rate in the restaurant, which helps them drive incremental sales because the machine is never down for an extended amount of time in the restaurant. Tim talked about Open Kitchen. I talked about Open Kitchen. Let's do a deep dive in Open Kitchen. Open Kitchen is our restaurant automation platform. It is the only enterprise IoT platform on the market, period. And what do I mean by enterprise IoT platform? I mean it has front-of-the-house automation with HVAC, lighting and energy management. It has middle-of-the-house automation with asset reporting, labor tracking and cold chain monitoring, and it has back-of-the-house connectivity with the products to allow us to push menus for LTOs, new firmware to the products, but also to get alerts from the products to tell us when there is an issue with the product in the field so we can react to it. I will also tell you that Open Kitchen is the only OEM-agnostic platform on the market. We have 32 other competitive OEMs on the platform for the benefit of our customer. So nobody else in the industry has it. They either have front of the house, middle of the house or back of the house, but nobody has a single pane of glass that has all 3 elements working together for the sake of automation. PowerHouse Dynamics, a group of 54 people in Boston that we acquired in 2019. While they are working to develop the latest, greatest IoT platforms, they're also supporting over 18,000 locations in between the U.S. and Europe with over 85,000 pieces of connected equipment in the field. So Open Kitchen is not vaporware, it is very much a scaled solution on the market today. Now -- getting to scale was kind of a unique challenge for Middleby. When we acquired Open Kitchen in 2019, we had kind of an, oh, no, moment when we realized that our controls were not capable of being connected. So that's what really launched the common controls strategy in 2020. And it took us from 2020 to the end of '24 to build up enough critical scale, meaning putting enough connectable controls on Middleby product where we could legitimately sell a complete kitchen connectivity package. We hit that at the beginning of 2025. And because of that, we believe we're going to be able to very quickly start to ramp up our connectivity sales at Middleby. If you want to think about a TAM, and this is going to be the Middleby TAM. In 2025, we produced 60,000 connectable products. We connected 4,200 of those products, about 7%. So there is a lot of growth between that 7% and 100% for us over the next several years. But because we have scale, we are now able to do it rapidly, and this curve should start to go [indiscernible]. Now how do we monetize Open Kitchen? We do it 3 ways. First is our enterprise SaaS sale. Again, enterprise SaaS sale, that means we're selling the front-of-the-house automation, the middle-of-the-house automation and back-of-the-house connectivity. So it's the complete Open Kitchen platform. We're also selling connected equipment SaaS. So that means as our dealer is selling a Pitco fryer, a TurboChef Rapid Cook oven, a Blodgett Combi or all 3 at once, they're also able to sell connectivity at that point of sale, further driving installations of Open kitchen in the market. Now what I'm most excited about is in 2025, we won $45 million worth of rollouts because of connectivity. Let me say it differently. If we did not have connectivity on these products, we would not have won had we not invested in Open Kitchen in 2019, all the way up through today and driven connectivity throughout the Middleby brands. And because we did that, we added over $45 million to our 2026 and 2027 revenue. So connectivity has been a very big game changer for Middleby. Now with all the great innovations that we have coming down the pipe comes the need for service. No matter how good we are as engineers, things tend to break. Korey is over here shaking his head. And when they break, you've really got to put the full effect of your service team on it to make sure that your customer is well taken care of in the time frame that they expect you to. I will tell you that service has not recovered from COVID. Our service response times, our first-time fix rates are all way out there. Again, it's really because of COVID. Before COVID, we used to be able to fix a product typically in under 24 hours. Now that we're outside of COVID, we're generally around 3 days, and we're trying to drive that back down to a day. The other challenge that we have in the industry is the way service is conducted. We go to market -- or we go to the service network through independent third-party ASAs. The challenge is these ASAs do all the same work that they do for us, for our competitors, which means everything is transactional. So there's really no way for us to strategically partner with that agent because he essentially has the same relationship with our direct customer. So what we decided to do is step back and take a 3-pronged approach to reinventing service at Middleby. And the first step is to create a new Middleby First Service Network, and this network is going to be comprised of service agents who are exclusive to Middleby and are strategic partners to Middleby and are contracted to put Middleby's needs and our customers' needs first. We're also building out a new life cycle management tool by the name of AMI or Advanced Middleby Insights. And this life cycle management tool is designed to help the brands and our chain customers manage warranty and manage life after warranty through insights, reporting and a whole bunch of AI that I'll talk about a little bit later. And then when I take these 2 items together, Middleby First and AMI, that allows us to expand our product offering with our Middleby Advantage service platform. Now we can start offering services to our customers to where we can start driving service revenue beyond our historic part sales. The Middleby First Network, I think, is on the same journey as Steve mentioned about his reps. Remember, he talked about taking the rep groups down from 156 reps to 16. Well, our brands today service their customers with over 1,000-plus ASAs in the market. And again, these are all transactional ASAs. Our goal with the Middleby Service First network is to whittle that down or distill that down to a little over 100 strategically aligned service partners who are contractually obligated to put Middleby first and our customers first. We started the journey in 2025. We're continuing it through 2026, and we should be at the goal line or the finish line of our journey in Q1 of 2027. AMI, Advanced Middleby Insights, is our life cycle management tool. This is just kind of an engineering block diagram of all the features that AMI has embedded in it. But very simply, it's here to help us manage warranty, dispatch service, produce reliability reports, warehouse data such that our customers and our brands can understand what's going on with their products at any one time. So I encourage everybody to spend a little bit of time on this slide just to see all the great capabilities that AMI is going to bring to Middleby and service. Where I get particularly excited is now that we have AMI, we have this tech stack that we've evolved around AMI. And that tech stack includes Open Kitchen, right? So as I have issues in the field, Open Kitchen is reporting that service instance to AMI, which then creates a service ticket, which then automatically dispatches the call to the service agent. So that means a restaurant manager is no longer having to spend time on the phone calling Middleby for service. Number two is we're embedding a ton of AI into AMI. We have this Ask AMI feature, which then queries our Middleby data lake. The Ask AMI feature is a great tool for the service tech because as that service tech is on route to fix the Pitco fryer -- sorry, Phil, or the TurboChef oven, he can type the serial number into AMI, and AMI will then go out to the data lake and will come back with a very concise, condensed service history of that product. If that technician further has a deep technical question of, "Hey, how do I resolve this issue? I haven't seen it." He can ask AMI. And if AMI knows it, he'll know it in about a second. We also have an AI parts predictor that when a service agent is going to a call and looks at the reported fault, well, that AI parts predictor has already scrubbed all of the historic service records, and it will recommend the agent the service part or 2 that he or she needs to effectuate a first-time fix rate of 90% to 95% before he even leaves the warehouse. So he is insured to have the right part on the van every single time. Then lastly, we have Middleby University. This is our learning management platform that is built into AMI so our service techs are able to stay current on our new products and our existing products by taking short refresher courses. And then we also track that on AMI and give them credits, which then go towards certain incentives that we offer our new Middleby First Service agents. Now talk about Middleby Advantage. So Middleby Advantage is really leveraging this new captive network that we have with Middleby First. It's managing all the data that AMI is providing to now allow us to be able to go offer these managed services to our customers, such as installation services -- bundled installation services like KWENCH or the C-store program that Steve had talked about, extended warranties or even selling Open Kitchen connectivity. So when you take Middleby First Service, AMI and partner that or pair that with Middleby Advantage, we really do come to a point where we have best-in-class service in the industry. I am out of time at exactly 25 minutes. So I'm going to introduce Korey Kohl. Korey Kohl is the Group President of Middleby Beverage and Ice.

And I have lost the monitor. So bear with me. So first off, I'm going to be just talking about operational excellence. Some of you are going to be wondering why is an ice and beverage guy talking about operational benefit -- excellence. Twofold. One, James stole all my good source and information. But two, I've been in the commercial foodservice industry for 43 years, 35 of those have been on the operational side of the business. So worked through a lot of different things, and I'm going to apologize as I kind of turn since I can't see what I'm talking to upfront here. We really, as part of the operational excellence, are focused on, we take the scale and leverage that comes along with Middleby. We also take the skill sets at the centralized location, and we work very, very closely with that. This whole road map is to target 200 to 300 basis points. Tim mentioned 200 to 400 earlier for the overall. As he mentioned, about 1/3 of that is from a volume impact. The rest of that comes from things like we're going to talk about right now. I'd like to talk a little bit our manufacturing locations. So we have 38 locations globally. 10 of those we refer to as our manufacturing centers of excellence. Those are multiple branded locations. So it's not just geared towards one particular location. We have 22 independent brand manufacturing locations. So we'll take a couple of examples on the -- 1 of the 10, the Center of Excellence we'll use STAR, which is located in Tennessee. It has 11 different brands of products coming out of that facility. When we purchased the Standex hot side of the business several years ago, there are a lot of common items that were in that product portfolio that were also at STAR. We consolidated that all into the one location in STAR as far as the assembly goes. We kept the manufacturing and fabrication in Nogales, Texas, and that became a shared service center. Shared service center is a vertically integrated, high-volume facility that gives us the ability to help and support our sister companies as we do the fabrication and vertical integration. A couple of things I want to point out about the first 32 facilities is we feel we've done a good -- there's work-life balance in your job. There is centralized -- decentralized balance in our factories. What we try to do is we have resources that are still centralized at the main facility, very dedicated, and we're going to talk about those in the next several slides. But then the factories themselves are very, very decentralized. We're responsible for our own P&L, our own engineering, our own selling, our own operations, and it allows us to be very flexible, nimble and responsive. So the various categories that we're going to talk about are listed up here. I want to highlight that the centralized team associated with each of these, there's an expert team for each one of those categories. So again, a strong resource for all the individual brands to pull to and to work to. Supply chain. Our supply chain teams manage about $850 million worth of spend. Again, somewhat centralized in that we have a team that allows us to negotiate steel pricing in particular. But they also work with all the brands. We use them a lot when we acquire companies, bring them on board. They're part of the onboarding process with making sure we're using approved suppliers. We have what we call the middle of the yellow pages, which is a booklet of the approved sources by category. So we have a new company come on board, maybe needs to get into injection molding. We have an improved team of injection molded suppliers out there. It's, again, one of the collaborative supplier relationships where we work very closely with these groups and to grow the business and to bring it forward. We have a targeted savings by using these teams of roughly $35 million cumulative over the next couple of years. As part of these teams, I also want to highlight, we do have weekly phone calls. So every Monday morning at 10:00 a.m. Central, all of the supply chain teams get together. They have conversations on best practices. They have conversations on where they're running into trouble in the industry, how they're fixing it, very different suppliers and how we're working that all together. Product line simplification, PLS, very near and dear to my heart. I've done a lot of this over the years. A lot of people will hear it referred to somewhat as 80/20. But basically, we've got 20% of our customers drive 80% of our revenue. 20% of the products drive 80% of that revenue. We spend a very disproportionate amount of time on the other 80% of the products and the other 80% of the customers. So what we want to do is we highlight very, very closely and focus on the high-volume customers that are buying the high-volume products. We take the low-volume customers, try to drive them to the high-volume products where it makes sense for them. We do a lot of things to standardize the lines, and I'll show you in just the next slide, some examples of things we are doing at Taylor to do that. But again, all of it is about simplifying, removing complexity, making life easier on your factories, on your facilities, on all of your people and the teams. The other thing that comes with this is as we reduce the amount of products that we are trying to support and maintain, we now have engineering resources available to work on other products. So instead of trying to maintain and sustain existing product lines, they're actually developing new products, high-volume products, higher-margin products, increasing our road to profitability. So PLS, again, this is a case study at Taylor specific to Taylor, and this is specific to the freezer portion of that product line. Over $100 million in revenue today for these product lines. Through PLS, we are reducing the number of modules from 462 to 123, 73% reduction. Again, huge simplification. The idea behind this and what it did do at Taylor is it's driving 500 basis points improved EBITDA margin for -- or gross margin, I'm sorry, for this particular product and family. We're now going to take that through the rest of the freezer lines, and then we'll be taking it through the hot side of the lines as well. Overall, on the freezers, we anticipate cutting from 1,004 independent bill of materials down to 309. One of the other benefits is by simplifying this product, reducing costs, being able to be more competitive in the market, it's going to allow us to take these higher volume products to the general market, which is higher margin, but we should see approximately an 18% revenue growth. Tear-down in benchmarking. This is another great practice done this many times. Sometimes it can be extremely simple. And example is when we were looking at buying Kloppenberg and we're looking -- they are an ice bin manufacturer. We already own Follett, which is then also has an ice bin line. Simple thing. We took a look at the weight of the bins. We felt Kloppenberg had a cost issue. Kloppenberg bin weighed 45% more than a Follett bin. Right there, that told you we had a material issue, overbuilt, overengineered. They were extremely proud of it, but it's what was killing that business. So we went through and we worked and developed and reduced the cost. They had features like a single-piece bin where Follett's was a multipiece. Customers like each one. This gave us the ability to deliver both of those particular needs. Where we really did a deep dive is on the ranges. So this is commercial related to Southbend. But in the benchmarking we did, we had a couple of different Southbend grills, ranges. We had some other sister brands such as Imperial and Lang. We had heavy-duty residential such as Viking. We had competitors' grills. We brought them all inside. We did a deep dive on every one of them. We took a look at best practices. We were able to take some of those best practices. As an example, you see there in the gas train between the burners, the valving, the controls, we're able to save 25% in cost of those products. The other benefit is we found the most efficient burners in that process, and we were able to carry some of those burners, which I want to say came from our Viking line, into the commercial product lines as well. So it allowed us to take and bring overall benefit, allow us to be more competitive and a very high-quality product through the process. Last thing I want to talk about is M-Lean. So again, this is a play on lean manufacturing, but it's taking the best lean manufacturing practices, taking industry 4.0 practices, taking the best of all those worlds and building them into our factories. We have a team, James mentioned a team in India related to the innovation side. There is also a team in India related to the M-Lean side and to the digitizing side of factories. Effectively, we have the digital twin models to where we can take -- we will take an actual factory layout. We'll set up a digital simulation of that layout, and we can rearrange and move things around and understand where the most efficient way is to lay out that particular factory. So we've taken the digital model. We've laid it out. We run real-time data. We understand what the real savings are going to be, but then we actually take it down to the final level to where we're going into the actual workstations associated on each one of these lines. We then optimize that workstation, reduce the number of steps that are required, make sure we have the parts there when they need them. We are able, through animation, train the new hires as we bring new employees on. One of the big difficult things when you bring a new employee in is you train them, you have now taken an existing staff member, you just reduced their capacity by 50% while they're trying to train this new person in. While using these digital tools, we still do some of the hands-on, but we're able to do a lot of the digital and the virtual training with them, they can actually click the video as they are going to the next steps in the process to make sure they stay caught up, stay trained and are following all the appropriate steps to make sure we're building a very high-quality product. Shared fabrication services. So I mentioned earlier the Standex acquisition that we kept the fabrication in Nogales, Mexico. We have 3 of these similar type facilities around the world. Some of our factories are very, very vertically integrated. A lot of our factories are not. They're more of an assembly type facility. We were paying third-party companies to do these fabrications. They were getting the margins on them. By using this facility, which was very strong technically, very high-end fabrication equipment, we're actually able to take and use those benefits within Middleby to support Middleby. Our sister companies have seen anywhere from 10% to 50% savings in products coming out of this facility. Especially if you're comparing it to things coming out of high tariff countries, we're able to manufacture it and fabricate it in Mexico, bring it into the U.S. with no tariff. It is a huge impact and benefit and has been great to many companies. All right. With that, I'm going to turn it over to Brittany Cerwin, our CFO.

Thank you, Korey. All right. My goal today in the financial section is to bring together all the initiatives that the team has just talked about and translate those into our financial foundation that will allow us to have sustained organic growth in our outlook that we are about to present as we stand up as a pure-play commercial foodservice company. There's 4 key growth drivers that I'd like to emphasize that give us confidence in our growth strategy. First is scale. Middleby for the past 25 years has been a disciplined M&A strategy that has grown the commercial platform to more than $2 billion in revenue. This scale, combined with the deep product portfolio serves as a key strategic advantage to accelerate our growth and profitability. Next is innovation. As James highlighted, our commercial foodservice companies outpaced the competition in earning awards recognizing innovation. This demonstrates our commitment to our customers to drive technologies that will fuel our growth pipeline. We invest and partner with our customers to bring solutions that address their efficiency needs and address emerging trends in the foodservice industry. We already have, as we begin as a stand-alone company, industry-leading adjusted EBITDA margins of near 23%. We have conviction in our margin expansion plan that will further optimize our operating model that we began heavily investing upon through all the strategies the team just covered. And finally, we have a strong proven track record of delivering free cash flow built on our sustained organic growth, strong margin profile and low capital-intensive operating model. This allows us to reinvest back into our business and also provide a meaningful return back to our shareholders. Let's take a minute to highlight some of our financial profile statistics. First of all, over the last 15 years from 2010 to 2025, we've recognized average organic net sales growth of 4%. This shows the resiliency of our portfolio through macro and industry trends. Our strong adjusted EBITDA margin profile is witnessed at the 23% total company adjusted EBITDA margin, which includes about $80 million worth of corporate costs and our 27% adjusted segment EBITDA margin give us a modest baseline to build upon for the future. While we've been executing over the last 15 months portfolio transformation, we have remained dedicated to deploying the vast majority of our free cash flow to our shareholders. We spent more than $1.2 billion or equating to about 15% of our shares outstanding over the April 2026 LTM period on repurchases. This was feasible due to our targeted free cash flow conversion of near 100% and our strong organic growth. These charts here really highlight the Commercial Foodservice segment historical performance. We just highlighted the average organic net sales growth over the last 15 years. But what that sales pipeline has also proven is that over that same time period, we executed on 40 platform-building acquisitions. Those acquisitions allowed us to build from the ground up the beverage and ice platform and heavily focused on technology investments. On the adjusted EBITDA side, the segment margins over the last 15 years have averaged between 26% to 29%. What we want to highlight here is over the last few years post COVID, there have been 2 factors that have caused a little bit of compression in our margins. First is the macro trends associated with longer lead times, inflationary costs and tariffs. While those -- you can put together some operating initiatives to reduce those, you'll still have some short-term headwinds before strategic pricing actions can offset those. Also, we've highlighted today the investments that we have prioritized in our go-to-market strategies and our technology advancements over the last few years that we also believe will set us up and position us for growth into the future. Okay. Now let's take a few minutes to focus Middleby's financials as a stand-alone company. These results reflect restating Middleby's financials without food processing. Starting in the third quarter of 2026, the Food Processing segment will be reported as discontinued operations. So we have reflected here the 2025 numbers without food processing. On a net sales basis, going from 2025 to 2026, we have sales growth expected at the midpoint of 5% of organic growth. This aligns to our guidance that we put out last week in conjunction with our Q1 earnings release, where we increased our fiscal year 2026 guidance to be between $2.44 billion and $2.49 billion for sales growth. In 2026, this would result in us achieving $2.465 billion in sales. We believe through our strong Q1 results of 8% organic growth that we are starting to see some inflection in the demand within the Commercial Foodservice business. On our adjusted EBITDA margins of 23%, inclusive of the corporate costs, we believe our margins are resilient right now as we navigate some current mix impacts and the headwinds in the first half of 2026 from the carryover of 2025 tariffs. Also, as announced in our most recent quarterly earnings results, we are facing current inflationary headwinds in the areas of freight and control spend associated with AI. And finally, a number we are greatly proud of is our adjusted EPS growth that we expect in 2026 of high single-digit 9% growth. Let's walk through the bridge going from 2025 actuals to 2026 expected results. This chart is going to highlight some of the key drivers to the changes and headwinds that we faced coming into 2026. You will see a $0.34 impact associated with increased interest costs as last year in September of 2025, we had the maturing of our $750 million convertible notes. Those notes had a stated interest rate of 1%. So the $0.34 represents our increased interest costs that we'll face through Q3 of 2026. Also, you will see a significant increase in stock compensation costs of $0.43. This is coming off the fiscal year 2025, where we had several reductions in the performance tranches of outstanding vesting. Now let's talk about the fun stuff, the growth drivers. The $0.09 improvement you will see is associated with the over $200 million dividend that is expected once we spin food processing. Also, you will see a 45% increase in adjusted EPS that was driven by the $565 million of proceeds that we received earlier this year as we sold 51% of our investment in our Residential Kitchen segment. And finally, the number that's the biggest on this chart is the $0.80, which supports our strong organic growth. Let's go into what you've all been waiting for. Even though Tim stole my thunder a little bit earlier in the presentation, let's walk through in these next few slides, what are our key drivers of growth and targets for the next 3 years. On a net sales basis, we expect to achieve 3% to 6% organic revenue CAGR. This is driven 1/3 by industry growth and the other 2/3 is really executing on the initiatives that the team put forth. On the adjusted EBITDA side, we're expecting to achieve 6% to 9% organic CAGR. This is driven by our volume and our operational excellence initiatives that Korey highlighted earlier. Using those same volume-driven scale and operational excellence initiatives, we also expect to expand the adjusted EBITDA margin by the year 2028 within a range of 200 to 400 basis points. This will also include some impact of favorable mix and our disciplined cost management and sustaining margin expansion. Finally, on the adjusted EPS, we expect our 3-year target to be a 10% to 15% EPS CAGR. This will be supported by the net sales growth, our margin expansion and our disciplined capital allocation priorities. So let's talk about the net sales growth initiatives that are ahead of us. As we said, 1/3 of our expected growth is to come from the industry growth. We believe post-COVID, we are coming off some pent-up demand in the replacement cycle, given prolonged cost pressures faced restaurant operators. Also, within this industry growth, we have included what we believe as some of our realized pricing that will go through expected on an annual basis of about 1% to 1.5%. Now here's where the exciting growth initiatives come in and really center around everything that James, Steve and Korey talked about. First is through product innovation. This is a core competency to Middleby. Our customers value it and expect it as they're addressing the needs of their business. Our recent investments in IoT, automation and particularly in the Beverage and Ice segment have positioned us to address industry trends and demand with a clear line of sight to organic growth. But let's not forget, embedded in Middleby's DNA is its true pipeline on the cooking and warming side of product innovation. James highlighted one of them, the TorQ fryer by Pitco, but also the NexGen Grill by Taylor will also provide a strong pipeline into the future. Then let's move into the go-to-market initiatives that Steve highlighted. We had a complete transformation of our go-to-market strategies that made Middleby easier to do business with. This included consolidating our third-party reps, enhancing our partnerships with our top dealer and chain customers and really putting differentiated tools to support our sales strategies such as the Middleby Innovation Kitchen and extensive digital training and educational content to really showcase the breadth of our portfolio and the expansive ROI our customers can get from our equipment. Now where the most recent investments we've been talking about is on the aftermarket sales and service side. As Tim mentioned earlier in his slides, parts and service combined with the replacement business of Middleby represents 56% of our 2025 actual sales. This is a solid recurring revenue base that through the advancement of our service network, we expect to expand upon. We are going to be leveraging Middleby's scale and relationships to launch a digital platform that provides real-time insight to addressing and improving quality throughout our products. We feel that these investments will and have made our growth strategy focused around the voice of our customer and position us to deliver sustained organic growth ahead of what we anticipate from the industry. Now let's dive deeper into the 3-year expected margin expansion on adjusted EBITDA margin. Starting in 2025 at 23%, we expect our range by 2028 to be within 25% to 27% of adjusted EBITDA. As discussed on the previous slide, we expect that volume will continue to drop through with strong contribution margins in excess of 30%. Next, we want to focus on what Korey highlighted earlier, and that is by leveraging Middleby's scale to expand our margin. First, is primarily within the supply chain areas. We have been able to centralize spend and evaluate those for future savings. Also, we've built up 10 manufacturing centers of excellence, which really have gained manufacturing efficiencies across product technologies. Korey also explained about us expanding our capabilities in-house to drive divisional operational excellence. We're utilizing this through product teardowns, through product line simplification and lean manufacturing. Those divisional case studies that Korey highlighted are going to be proven and repeatable tactics that we can drive margin expansion throughout the rest of the platform. Finally, as our customers adopt new product innovation, we realize and re-realize the scale in manufacturing those. It will further expand our margins and improve our mix. But our mix benefits don't stop there. What we'd like to do over the next few minutes is take you on a journey of where Middleby has been in our portfolio Pareto initiative. The first 3 lines on this chart are really where Steve had focused on the go-to-market initiatives. So we have been driving organic growth that we are starting to realize here in the beginning of 2026 and believe will position us for sustained growth through 2028. But that consolidation effort that Steve mentioned is where for the service agents, we feel we can also gain great leverage by building strategic partnerships on the aftermarket service. The last 2 lines on this chart are where we're just starting to scratch the surface. The product line simplification is where we will continue to have concerted efforts to drive this through the platform. The margin expansion will be realized through sourcing, through scheduling and through the manufacturing operations. On the commodity spend side, Tim mentioned this earlier, our global supply chain team has really been operating over the last few years on a defensive mechanism, really trying to address those macro trends of long lead times, inflation and tariffs rather than being able to focus more of their time on the strategic pricing and sourcing initiatives that will position us for further margin expansion into the future. But we've embedded in all our division leadership as we have annual budget and business reviews with our division leadership and our executive leadership team. The focus is on financial growth, but there is detailed analysis that supports those models using customer and product volume and profitability to address any needs of rationalization or strategic initiatives to address outliers. A prime example of this was as we were within COVID, Middleby faced a regression in top line in front of us. And we made the strategic decision to rationalize over $100 million in net sales across 2 of our product lines in commodity products that we offer to the market. This positions Middleby to come out while on a lower top line, a more profitable and seamless operating model going forward. We believe that this list will expand and evolve as we continue to provide a consistent margin opportunity. Our strong free cash flow and balance sheet position is evidenced by these statistics. Our targeted CapEx in the near term is expected to remain under 2%. This is where our historical spend has been and primarily used to invest back in our manufacturing operations and provide automated equipment to gain efficiencies in our operations. As we mentioned earlier, we have strong free cash flow generation and expect that in the midterm to remain at near 100% of adjusted net earnings. By the year 2028, we expect our free cash flow to be near $400 million, given our profitability of the company, our organic growth strategy and also the low capital-intensive nature of our business. Our targeted net working capital is expected to be around 20%. But as mentioned in the product line simplification and other operational excellence initiatives, we expect that we will benefit from simplification driven through the manufacturing operations here. And finally, through all these statistics, we will remain balanced with a 2 to 3x targeted net leverage, which we believe supports our strong balance sheet position and ability to execute our capital allocation priorities as shown here. Our first priority is always to reinvest organically within the business. We believe that we have to maintain the growth of our existing business by investing in the capital expenditures to improve operations. The return of capital on a consistent and meaningful basis to our shareholders remains a disciplined priority for us with deploying the majority of our free cash flow towards share repurchases. Finally, Middleby was built on an M&A strategy. And while we have scaled the platform, we will continue to evaluate any potential opportunistic or strategic acquisitions that could enhance the portfolio. As previously noted, we will maintain all of these priorities while operating within a 2 to 3x net leverage ratio. Hopefully, as we believe with a conviction, this presentation has demonstrated Middleby's foundation of historical performance and as we start our next journey as a pure-play commercial foodservice business is poised to benefit from immense organic growth opportunities in the near term, a renewed focus on clear strategic initiatives to optimize our operating model and deliver solutions to our customers while returning consistent value to our shareholders. All right. At this time, I'm going to call the rest of the management team back up, and we'll open it up to Q&A.

I'm going to be taking questions. There should be some mics in the room. And if everybody could just say their name and their firm before they ask the question for the webcast. So we can start with Mig.

I'm Mig Dobre with Baird. I appreciate the effort that went into the presentation, lots of detail here. I have a lot of questions, but I'm just going to start with one. Your commentary on service, I found to be very interesting and very different than what I've heard from Middleby in the past. And I just want to maybe clarify a couple of things here. So as I understood it, you're sort of applying a very similar strategy to what you've done with the reps to your service operation, but these folks remain independent third parties. At the same time, you talked about Middleby being able to derive some service revenue. So that there are third parties, presumably you've got revenue [indiscernible] to them. I'm trying to understand that distinction and that difference. And in optimal state of Q1 '27 and beyond when you have this network all set up, what does that do in terms of driving your ability to grow? How does it differentiate you relative to your competitors? I mean we all know in that ITW has a pretty comprehensive service offering. What would you look like relative to something like that?

I think we're trying to build a different service model. There's -- ours is less capital intense. So we're really trying to drive it on the brains, the data, how do we stay with that customer on the life cycle. I think that's why the AMI platform that James talked about is so important because having information, just like we see with IoT is kind of a game changer. A lot of customers don't know what's happening in their own operations and being able to track data over time, data is kind of power and then you can then tie that to an ROI of a piece of equipment, which is very important and you can tie that into the upfront sale that is very powerful. So I would say just that whole data element is something that's unique relative to others in the industry. Also being able to do that scale, right? So I mean, as we talked about leveraging the platform, a lot of you can do that across a whole kitchen, whether it's ice machines, fryers, speed cook and you can facilitate customer understanding really what's going on across the kitchen, we think that's competitive advantage. So the first benefit of that is frankly selling more equipment because if you can do that, then you can really tie that into an ROI to a customer. And again, you're talking about one of the biggest pain points to the customers, which is service, right? It is not only a nuance, but it takes your kitchen down, which you've got a loss of revenues, it's an employee situation and service is very expensive. Maintenance -- there's a huge ROI just by avoiding a service model. So controlling that aspect, there's a lot of value there. I think then having the captive network, I mean, then you're aligned and tied together. So maybe we don't have the trucks and the parts, but we don't necessarily want to manage all that. We just want to have aligned partnerships that can execute the same understanding and expectations of KPIs, et cetera. So [indiscernible] one is selling more equipment sales with higher ROI to the customer with less pain points. And then it's like what kind of managed service programs can you have, how you tie IoT together with services. There's a number of different revenue models that you can have without actually having all the feet on the street, trucks, et cetera. So that's kind of the general direction [indiscernible].

Let's go to Tami.

This is Tami Zakaria from JPMorgan. I was wondering if you could shed some light on how long the replacement cycle for cooking equipment is? And over the life of the product, what's the average service opportunity versus the original cost of an average equipment? And how much of that do you capture now? And is there a target to raise that to a certain level by 2028?

[indiscernible] I'd like to start the first part. When we think about the replacement cycle on the equipment, I would say it's tough because, obviously, we have a broad portfolio of products. I would say 7 years is kind of the rough average life that you would expect. We've talked a lot about that just given that we feel like we've had this deferred replacement cycle, which is not what you're asking, but I would just be remiss in not mentioning that another great opportunity we feel like we can capture some growth. But -- so 7 years is just say, the average life cycle. And then maybe my tip tick over, James, is really that first year or first second year when the product is in warranty is obviously when we have the most visibility into what's going on with our customers from a service-related standpoint. We oftentimes do lose visibility once it gets out of that time frame because it's going to a broader range of people who can fix it. So I think that's obviously a big benefit to what we're doing with the AMI platforms, maybe.

Yes. So I would say one of the big drivers of AMI is really giving the brand visibility to understand what's going on in warranty and out of warranty such that we can improve our products. When I was running engineering, I used to tell my team, the single biggest cost reduction we can do for our products is making them more reliable, avoiding service in that first year, second year, however long that warranty period is. And having good actionable data will help the brands achieve higher levels of profitability through lower warranty spend. AMI is also, along with this network, going to enable us to unlock these managed services. Even though we're not running the calls, we will still make margin on these managed services such as bundled installations, PMs and extended warranties where we can start moving our service revenue from 17% slowly tick that up a few percent. So that's what we're trying to do with service. And as Steve said, anybody can sell one product. It's a second product that's the hardest to sell because how well you take care of that product in the field will dictate how apt that customer is to buy another product from you. And with our renewed service effort, we believe that service really can be our best-selling tool.

Jeff Hammond, KeyBanc Capital Markets. Maybe to focus on the financials. One, are you assuming in that 10% to 15% earnings growth that it's 100% buybacks? Or how should we think about the split of M&A and buybacks going forward? And then it looks like in the bridge, your incremental margin is kind of 40% to 50% to get to those incrementals, which seems pretty healthy. So I'm just wondering a little more color on how you hit those incrementals and maybe what opportunities there are to take out of corporate along the way?

So first, let me start with like the assumptions that we put in there on the adjusted EPS earnings. So we kind of assumed that there would be a healthy balance between about 50% going to share repurchases and some debt repay down as well over those periods. As we look into the margin, incremental margins there, we've got a few things right now where we've got some mix headwinds that we talked about, but we also believe a lot of these operational initiatives that we're putting through for operational excellence will continue to have the benefits in those margins and really allow us to expand and achieve those as these volumes grow. So I think we believe that really our margin expansion that we're showing, it's not based on solely volume growth. It's really dedicated by what we've been putting through the factories and what we've been focused on strategic initiatives that should really help us expand those margins. And also probably the final thing, too, is the product innovation. So James highlighted, we're selling equipment that is higher technology based, which drives a higher ROI for our customers and associates with the higher sales price. So as you continue to get leverage on those new products, it will improve the mix as well.

Just a first question on the residential -- the forecast that you laid out, does that assume ownership of your stake in the residential business? Or is that just optionality?

Yes. So the ownership interest, the 49% that we'll start to get in Q2 of 2026 associated with the residential kitchen business. We've excluded those from our adjusted EPS projections as we really don't believe that's core to our future platform. So that is not baked into any of those EPS assumptions.

For potential monetization of it or...

Not at this time, not in the near midterm.

Okay. Maybe a separate one on the -- Steve, you spent a lot of time going through the investment and the work you've done with a lot of those high-profile brick-and-mortar dealers. Maybe just speak to kind of how the online channel is developing. Clark is now almost a $4 billion entity. So Middleby's approach in terms of how you plan to participate with that fast-growing segment of the market and what implications that may have in terms of -- as you think about mix and pricing going forward, if there's any kind of an interplay there to the extent you become more active in that space?

Yes. Thanks for the question. It's a very good question. I think that if you look at the big e-commerce dealers, obviously, Clark is by far the biggest. They've had a phenomenal run growth, actually being recognized as the dealer of the year in our industry next week at NRA, which is appropriately so. There are a handful of other pretty significant e-commerce players where we have a very strategic relationship with. I will pivot to saying this emphasis around more and more customers going online by product is the big driver of why Middleby Shop is so forth, right? But we have to control our own destiny because it's great to have our products have a strategic relationship with Clark or others. But it's also once you go to a website that maybe [indiscernible] there, but if it gives you the opportunity to potentially move to a different product because of how it's being displayed online, that's obviously what we're trying to avoid with Middleby Shop, right? So I think the fact that we're investing so much in this digital platform, again, is to control our own destiny to make it as sticky as possible between that online customer coming and buying Middleby. It's still very complementary to our e-commerce partners, right? Because in many cases, we may take that calling opportunity from Middleby shop and actually still run it through a Clark or [indiscernible] as an example. So we feel like we're strategically aligned with them, but it's trying to do our own things that complements them to make sure we can bring as much of that customer to Middleby as possible.

[indiscernible] has another question.

I just had a couple. I may have missed it, but one CFO question. I didn't catch what leverage would be immediately post spin. And then just second, with the service network, which sounds really interesting, how are you incentive -- I love the idea [indiscernible], but how are you economically incentivizing them to do so?

On the net leverage right at time of spin, we've estimated that to be at about 2.8x. But as we get through the back half of 2026, we expect to delever down to about 2.5x.

So then I will -- I'll take the part B of that. We will have certain metrics for the agents and then they will be bonus based on a percentage of their warranty labor dollars.

I think it's also very appealing for our partners to be partnered with [indiscernible]. They -- as you guys said, it's very transactional in nature. And I think the rep model is a very good example of it. Those reps are stronger in the market because they're partnered with Middleby. They actually can make more money because they're selling higher technology, but we try to align our incentives where if we make more money, they make more money. And I think given the uniqueness of the service model, they also see the merits and the opportunities of that. So they see that as a big opportunity that, frankly, we're bringing to them.

Mig has another question.

On beverage, I feel like there was a lot that [indiscernible], are you planning on disclosing how cooking equipment or hot side versus cold-side beverage is performing on a go-forward basis? And I have a few other follow-ups.

I think -- I didn't quite hear it, but I mean, obviously, we gave some information.

No, no. I'm saying going forward, are you going to be providing insight into how beverage is growing relative to the hot side?

I think...

Yes. Post spin, we're going to be evaluating the platform in terms of the segmentation that we will be reporting per GAAP. And we will continue to evaluate what those specific segments will be. But I think no matter what, in our quarterly discussions throughout this year and on to next year with the beverage innovation that's in front of us, we'll continue to highlight how much of our growth is really being driven by the 2 platforms.

I think a lot of this is you'll see a release annually and then perhaps a little bit more regular basis.

In the 3% to 6% organic growth plan, how is beverage comparing to that company average?

We're not disclosing that, but you -- from the discussion, you can see, right, there's more market share opportunities and there's a significant pipeline. But I don't want people to need anybody to believe that cooking and warming is not growing and there's not significant opportunities there as well. We pointed out some markets that we think we can expand into, plus there's a significant part of the pie, which is faster growing. So I think we're baking in growth on both sides of the business.

Just from my perspective, it seems like this is where your customers are innovating the most. So if they're innovating, then that presents opportunities like your example with KFC, for instance, right? And then if I remember correctly, the slide where you were showing the margin breakdown, the lift from a margin standpoint seems to be disproportionately concentrated in beverage as well. So if you're growing faster, you're going to have more margin expansion, which is why I was trying to tease out how much of this plan that you're putting forth here is really kind of driven by beverage itself and then maybe, I don't know how much when you think about that platform, where are you from a scale standpoint and product standpoint? Do you need to do to basically concentrate M&A over the next 3 years here, specifically? Lots in this question, maybe [indiscernible] can unpack all of that.

Okay. So I'll take part of it, and then Steve can jump on after that. So I think one of the things that people didn't understand is actually a lot of the M&A that happened over the last several years, which maybe was a bit confusing was in ice and beverage some of those products. You mentioned labor burst, which is part of the Punch program. I mean, things of nature like that, which are now taking hold. But also a lot of the investments in technology as well, the CFVs, the blue sparks like that is where we've got a strong pipeline of new products coming out. So it's a mix of a lot of those investments that were made that were M&A, both from a technology and from a product standpoint. So are there other opportunities to acquire within the beverage space? Yes, there are. But actually, we're pretty excited about -- if you look at the platform today, it's the most complete portfolio. So one of the advantages is most of the people competing in beverage don't have ice. So actually bringing ice and beverage together is a competitive advantage and a lot of coffee players don't have beverage dispense. Beverage dispense don't have ice cream machines. So when you look at that, it's actually the most complete portfolio out there today. It does not mean that there's not M&A opportunities, but we've actually done quite a bit to scale that platform over the last 3 or 4. It kind of goes back to the beginning. These are some of the things I don't think shareholders fully appreciate until it really is the game time and [indiscernible] get traction. And luckily, I mean, our customers are now focused on there. And I think they're focused on higher innovation. I mean innovation is hitting the spot of the types of products that are coming out in the marketplace right now. So we think we're very uniquely positioned as the new player, and that's why I say we are a disruptor in beverage right now.

One more question for Tami, and that's going to be our last question.

Tami Zakaria from JPMorgan. One of your slides mentioned international general market was down 10% last year. Could you tell us what the overall industry you think was, up or down in those regions that year? And stepping back, do you think price competition from maybe Chinese or local players was part of the reason why we saw that decline. And lastly, overall, do you plan to compete on price or service or innovation or a combination of these as you want to take share in international general market going forward? start on that.

I'll do my best. I think maybe I'll go backwards and see if I remember as we go. I mean I think no matter if we're selling in the U.S. or selling in Europe or selling in Asia, I think the selling approach is always the same. It think it always starts with great product. I don't think we've ever been a company that has sold [indiscernible], right? I think we have to have, obviously, competitive pricing, but it's more about are we delivering a great ROI for our customers. That holds true. I don't care what part of the world we're in. That has always been our approach and will continue to be our approach. I do think now that to piggyback on we've talked a lot about services. Now when you layer in service globally, that is a competitive advantage. So it's like you kind of take price off the table a bit because back to what James said, I can guarantee every chain customer, especially if you can guarantee great service will pay [indiscernible]. So it takes pricing off the table. Your question -- your first question around just how we thought about international general market last year. It's tough in that rolled up slide because I feel like we actually have made so many great inroads in markets like Europe have -- doing great, markets like the Middle East that we've actually made great investments in the last several years, which is obviously the tough spot right now. Asia is another one where we've made a lot of great investments, which I highlighted but I feel like there's just so much going on there. It just is a tough market right now. So it's kind of like the same thing that Tim talked about where with the chains, we're winning, we're losing or as you said like we're doing a great job. It's just those inherent markets have just been tougher last year. So I still think we're -- as I said in my slide, I think about the progression of people, resource, investments in those markets positions us well as we ever have.

But I think a lot of the challenge last year was focused -- concentrated on Asia. And a lot of that was geopolitical. But as he just said, we actually have made significant strides in Asia in terms of our localization efforts, the quality of the products coming out. So we're actually very well positioned in Asia, particularly China if those markets also come back, which we think they will. [Break]

Good afternoon, everyone and thank you for joining us today. My name is Rob Fagan, Vice President of Finance of Midera Food Processing. On behalf of the Midera leadership team, I am delighted to welcome all of you to our inaugural Investor Day presentation. Please note that today's presentation will include forward-looking statements, which are subject to risks and uncertainties, which may cause our actual results to differ materially. You may find a more detailed description of risk factors in our recent Form 10 filing. We'll also present non-GAAP measures, which are reconciled in the appendix of today's presentation, which has been furnished with the SEC and is available in the Investors section of our website. One specific item to note, references to stand-alone adjusted EBITDA reflect management's review -- management's view of profitability fully burdened by our estimated stand-alone corporate costs post spin. These are not reflected in our historical segment reporting results and not fully captured in the Form 10 carve-out financial statements. Today is an important and exciting milestone for Midera Food Processing. Our goal is to give you a deeper understanding of who we are, how we operate and how we think about long-term growth and value creation. Before we begin, I'd like to briefly walk you through today's agenda, so you know what to expect. We'll start with Midera Food Processing CEO, Mark Salman, who will outline Midera's strategy, a company overview, its market positioning and playbook for long-term value creation. Next, Mark Bowie, Midera Chief Operating Officer, will highlight the company's margin expansion initiatives, including maximizing the value of our recurring aftermarket business, along with driving operating efficiencies through innovation in the Midera Operating System. From there, you'll hear from our Group Presidents, Peter Jongen, Andrea Colussi and Scott Ruhe, who will provide insights into the protein, bakery and snack market categories, respectively, highlighting market trends, examples of how Midera harnesses the collective strength of our brands and their leadership to deliver value for our customers, followed by their strategic priorities in support of our value creation playbook. Next, Midera's Chief Strategy Officer, Matt Fuchsen, will share his M&A framework and how the company plans to build upon its proven track record of generating shareholder return through disciplined execution of inorganic initiatives. Our Chief Financial Officer, Amy Campbell, will then review Midera Food Processing's financial profile and how we expect to combine a strong balance sheet, substantial cash flow generation and a capital allocation strategy to maximize shareholder return. Following the financial portion of today's presentation, we'll open it up for a Q&A session before final words from our CEO, Mark Salman. I'd now like to invite Mark to the stage and ask that everyone please enjoy this brief 3-minute video before we get started with today's presentation. [Presentation]

Thank you for attending our Investor Day. Midera, we are a global industrial automation company that feeds the world with our customers. We focus on further processing where the value added is in the food manufacturing process. We solve mission-critical problem every day to the world's leading food company. Why should we invest in Midera? One of our strengths is our established leading brands that have been run by a leadership team that is very entrepreneurial And motivated to deliver strong financial results. Another strength is the favorable industry mix that we have across our end markets. These trends tend to create durable tailwind that pushes our revenue and earnings. Another strength is our clear growth strategy built on 3 strong pillars. Those strong pillars will enable us to deliver 5% to 7% organic growth by -- over the next 3 years. Total line solution, market penetration and aftermarkets. You should invest in Midera because margin accretion is a core focus of our value creation plan. Through mix improvement, operational excellence and scale, we expect to generate approximately 500 basis points of margin uplift by 2028. Another reason you should invest in Midera is our proven M&A growth engine. We earn the right every day to consolidate in an industry that is $70 billion strong and highly fragmented. We are the acquirer of choice with long-standing target relationships. Last but not least, our strong balance sheet. Our strong balance sheet will support the growth, inorganic and organic that we have in our plans. In other words, we know that our balance sheet is our weapon for shareholder value creation. Taken together, this position Midera as a high-quality, differentiated automation platform built to compound value over time. That is why Midera and that is why now. Our success starts and ends with the customer and the value we consistently delivered over the past 2 decades. Midera began its journey in 2005 with the first acquisition of our protein company that put us into that food processing world where we are solving complex problems for our customers. I joined Midera in 2015 coming from the bakery side and bringing a perspective of a customer of a food processing supplier. At that time, Midera was shy of $300 million in revenue with 14 brands and a substantial untapped market potential. Since then, we have nearly tripled the scale of our business, adding another -- for a total of 33 brands and deliberately focusing on the growth of our protein and bakery platform and recently in 2024, entering the snack food platform. A core competency of Midera is disciplined acquisition and successful integration of our targets. We have added more than 30 brands while preserving entrepreneurial leadership and customer intimacy across the brand level. Importantly, this growth was not financial engineered. It is built on pure customer value. Today, we operate in high-growth markets with shifting consumer preferences where customer need for automation, scalability, reliability and innovation is needed more than ever. This combination, customer-led strategy, proven execution and structural market opportunity is what has driven our performance to date and positions Midera for continued compounding ahead. The spin of Midera is designed to unlock the full potential of a focused pure-play food processing leader in innovation equipment across protein, bakery and snacks. We operate leading brands across a broad range of food categories, unified by high-performing total line solutions that starts with preparation and mixing and end with finished products. This allows our customers to partner with a single trusted platform rather than manage a fragmented supplier base. Everything we do is focused around our customer, adding value to our customer. That means improving uptime, yield, labor efficiency, food safety, scalability, outcomes that directly impact customer profitability. We anticipate customer need. We invest ahead of demand and we innovate highly engineered solutions that enable our customer to grow profitably in a dynamic, fast-changing food market. This is where Midera win, not price-driven equipment but the highest value, most mission-critical part of the processing cycle, where automation, reliability and seamless integration matters the most. As Rob presented earlier, this is the senior leadership team driving Midera's strategic vision and day-to-day execution. Collectively, this group brings decades of experience in the industry. And behind this leadership team is another bench of company brand presidents that have been leading their businesses and delivering consistent results for years, talent that ensures resilience and scalability, which is what we need as we pursue our growth strategy. Who is Midera? Midera is a scaled global automation platform with strong financial performance and a differentiated operating model. In 2025, we generated $850 million in revenue and $140 million in EBITDA, including our estimated stand-alone public company cost, demonstrating both scale and earning quality at day 1. We operate globally with 33 best-in-class brands supported by 20 localized sales and aftermarket offices that keep us close to our customers and responsive to their needs. Approximately 40% of our revenue is highly recurring, coming from aftermarket sales, which carry attractive margins and benefit from a massive installed base. From a market perspective, we have achieved leadership positions in both protein and bakery and having recently entered the snack food category, we are now expanding both our addressable market and our long-term growth opportunity. Geographically, we are truly global. 44% of our revenue is generated outside the U.S. with 31% in the EMEA region and growing in large underpenetrated emerging markets in Latin America and Asia. At the core of our differentiation are the 20 total line solutions, which enable customer to partner with Midera across complete systems rather than individual pieces of equipment. We recently added 3 new total line solutions and continue to expand capabilities in this critical growth pillar, driving large orders, higher switching cost and incremental aftermarket attachment. Taken together, Midera combines scale, recurring revenue, global reach and differentiated technology, positioning us as a premium food processing automation company with a clear path for sustainable value growth. One of our differentiator are the premium brands. For investor less familiar with food processing, this slide matter more than it may appear. The brands you see here command pricing power as category leaders that customer actively seek out and rely on mission-critical operations. What's unique about Midera is what we presented, is the entrepreneurial spirit and competitiveness of each brand while connecting them to total line solutions that solve bigger and more valuable problems for customers. We operate as a decentralized brand-driven company where decisions are made quickly and the closest to the customer, not in a corporate bureaucracy. This combinations of strong individual brands with a platform level integration is a key competitive advantage and a major driver for our growth. Another differentiator is our global footprint. And there are 3 takeaways from this slide. First, our operational footprint serves customers and sell products across 6 continents, allowing us to support food producers wherever they operate and wherever they want to go. Second, we have invested heavily in this footprint over the past 3 years, particularly in our global innovation centers. These centers provide unique customer value, enabling collaboration, testing, co-development of solution and positioning Midera as a true technology and innovation partner, not just as an equipment supplier. Third, we are now accelerating returns on these investments. We are monetizing these footprint with organic growth, deeper customer engagement and expanded total line solutions, while also leveraging through disciplined M&A to fill white space and enhance scale in a highly fragmented business. Taken together, this platform is not just reach. It is a strategic growth engine for Midera. Another differentiator is the high-value sandbox we are in. Let me briefly define where Midera specializes in. We're not in primary processing. We're not in secondary processing where the kill and deboning happen. We are in further processing. And very clearly, we are the leader in this category with a strong emphasis on our thermal processing. This is where the most dense and complex solution are derived for the customers. If you look at this page from left to right, what you see is more commodity on the left and more value-added products on the right. When a customer wants to launch a new type of bread or a new hot dog or whatever is the product that we specialize in among our 29 total line solutions, decisions are made around quality, consistency, food safety, yield, automation, all of them happen inside the 4 walls of a further processing plant. This is our sandbox. This is where Midera brings the best value, solve the hardest problem and becomes a true partner in our customers' growth and profitability. Now that you know who we are, let us tell you how we're going to grow and drive value. Over the 10 -- over the past 10 years, end market CapEx has delivered low to mid-single-digit growth across protein, bakery and snacks. Diversified exposure across growing end market drives demand and limits cyclicality and long-term demand driven by underlying consumption growth, evolving consumer preferences and equipments replacement and/or upgrades. The total addressable market for food processing is approximately $70 billion. The top 5 players represents around 10% of the revenue in that market, with most other equipment manufacturer focused on single category or localized markets. And while disciplined M&A remains an important lever, we believe heavily in engineered-led innovation, customer centricity and total line solutions that have already driven and will continue to drive organic share gains. In a fragmented market of this size, share shift is a powerful growth engine and Midera is well positioned to capture it. One of our many strengths are the favorable industry trends that we see in this marketplace. I'm not going to detail each of these individually but every one of these drivers causes our customers to call Midera for equipment solutions. Consumer demand and global population growth continue to drive volume and product innovation across food categories. At the same time, increasing requirements around plant automation, labor efficiency and food safety are forcing customers to upgrade and rethink their processing lines. In an increasing uncertain world, food security concerns are accelerating the localization and industrialization of food manufacturing, driving new plant builds and capacity investments closer to end markets. Let me be very clear on Midera's growth strategy, which is differentiated in its value for customers and ultimately for you, shareholders. Everything we start with is for the customer and it ends there. Whether we're delivering total line solution, launching a new innovation, penetrating a new geography and expanding our service and aftermarket platform or executing our disciplined M&A, every decision we make runs through a very simple filter. Do we materially improve customer outcomes in this decision? That customer-first mindset is powered by 4 integrated growth pillars, total line solution, market penetration and aftermarket. They reinforce one another, accelerating growth and creating a compounding flywheel. We'll walk through each of these pillars today but the results already speak for themselves. Over the past 6 years, this strategy has delivered approximately 12% of compound annual growth. And a focused stand-alone pure-play food processing company with a sharper execution, faster decision-making and disciplined capital allocation, we believe the opportunity ahead is even greater. This is a strategy to create real customer value and one designed from day 1 to compound shareholder value over time. Let's begin by defining what's a total line solution and why we believe they are unique to Midera? What you see here is a bacon line where you put a pork belly on this side that comes from the primary processing and end up with a packaged bacon product on the other side. $2 input, $8 input per pound -- output per pound, 4x value creation. This is the heart of food processing. These are 6 best-in-class brands that we acquired over a period of 10 years. creating a high-performing line that is fully integrated that a customer can purchase and install from a one-stop shop from one reliable supplier, Midera. For Midera, total line solutions deepen customer relationships. It expands our share of wallet and pull through additional opportunities in aftermarket, service and future line expansion. Importantly, this is not a theoretical concept. It is a capability built over years through deliberate portfolio development, disciplined M&A and operational integration. The ROI for our customers is powerful and it is real. These are real numbers. In this example, our total line solution for bacon delivered approximately $4.4 million of saving per year, representing a 55% ROI for our customer. For you, as Midera shareholders, that matters. When we sell a total line solution, our pricing is supported and directly reflects the quantifiable value delivered to our customer. Put simply, total line solutions drive both growth and margin. And just importantly, they create repeat customers, customers who come back to Midera for aftermarket support, sales and expansion into the next production line. Total solution raised the bar. They moved the conversation away from pricing and individual machine towards performance, reliability and long-term partnerships. And as we scale this capability globally, we see a long runway to drive customer value and sustain above-market growth. Today, we have total line solutions across more than 20 food categories. On this slide, we've highlighted some of the largest and fastest-growing end markets within processed foods. Poultry, which is our highest growth category. It expanded over 30% last year. portable snacks, particularly protein, celebration cakes, where we have the best integrated automated line that can produce up to 6,000 decorated cakes an hour. Across these solutions, we create value for our customers across the full spectrum of profit drivers, we increase throughput and yield. We reduce operating and input costs, and we ensure sanitation and improved product quality. And in many cases, we enable our customers to offer entirely new products, opening up additional revenue streams. This is what differentiates Midera, not just selling equipment, but delivering integrated solutions that directly improve customer economics and growth potential. Having covered our first growth pillar, I'll now turn on to our second growth pillar, expansion through new product innovation and new geographies. We have already a truly global presence. Our customers operate globally, and we are structured to meet them where they are today and where they want to go. The scalability to produce and sell across the world provide us with a significant advantage to grow and scale our M&A targets. This footprint enables organic growth and scalable M&A, giving us ability to integrate and accelerate businesses rapidly. With 20 sales offices, 29 manufacturing sites and 4 innovation centers, we combine global reach with execution discipline, creating a powerful platform for growth. In short, this pillar is not about building presence. It's about unlocking growth through scale, speed and execution discipline. At Midera, innovation isn't a department or a function. It's a mindset that defines how we partner with customers, where Midera invests in state-of-the-art innovation center that help them develop their businesses. So what's an innovation center? They are places where customers don't just see equipment and test them, they experience what their operations could become, where ideas move from concept to reality, where complexity is simplified and where performance is engineered with intention. Our customers enter our innovation centers seeking help and clarity, and they leave with a clear vision of what world-class looks like for their own operations. They work side-by-side with our food technologists, our bakers, our engineers, our R&D specialists, testing, validating and optimizing complete solution before making capital decisions. Our innovation centers are not showrooms. They are growth engines for our customers, for our brands and for the future of food processing. This slide shows an innovation we are very proud of, the Helix oven, purpose-built for poultry application and designed to meet accelerating consumer demands, particularly in the U.S. The customer challenge is clear, how to cook products with a higher yield, better product quality, using less time and less space. Scanico, our spiral company, addressed this challenge by designing a highly flexible spiral oven built around a unique thermal approach, combining steam, convection and microwave to dramatically enhance speed, control and product quality. The Helix oven delivered material results, up to 5% yield improvement, 40% to 60% faster cook time and roughly half the physical footprint of conventional solutions. More importantly, this is innovation with real economic impact, transforming our customers' operating economics and meaningfully accelerating their return on investment. Aftermarket, we have a very strong foundation in there. This is our third growth pillar, and it's the continued expansion of our aftermarket parts, service and business that's going to be driving a lot of our growth moving forward. Today, this high-margin revenue represents around 38%, 40%, depending on the year of total sales. And that mix continues to expand, reaching the mid-40% in the next few years. A key accelerator within this pillar is our focus on total line solutions. Again, roughly 20% of standalone equipment sales include the service agreement, while total line solutions drive an attachment rate of over 90%. The reason is straightforward. Complex and high ROI systems require deep technical expertise and our global service organization plays a key role in keeping customer operations running at peak performance. With an installed base exceeding 100,000 units and systems in the world, we have a long runway for durable recurring revenue, one that expands margin, deepens customer relationships and increases lifetime value. This is more than a look of where we are today. It is a clear statement of the company we are becoming. We built an industry-leading platform anchored by best-in-class brands and equipment, serving markets with powerful long-term secular tailwinds. Our growth is proven and driven and reinforcing engine -- driven by 3 reinforcing engines: total line solution, innovation-led market penetration, further geographical penetration and aftermarket. We are the acquirer of choice in a fragmented market, backed by a disciplined playbook and a consistent track record of integration and value creation. What makes this platform truly durable is our culture. It is defined by entrepreneurship, intensity, accountability and a relentless will to win. As we enter this next chapter as a public company, these strengths form a powerful accelerator, compounding growth, expanding margins, generating strong free cash flow supported by disciplined capital allocation, driving sustainable long-term value for shareholders. Today is about communication, the foundation, the platform, the strategy and the culture we're taking public. What comes next is execution. Our team will now drill deeper into each of these categories, our growth engine, showing how they convert into earning power, cash flow and disciplined capital deployment. This is the beginning of our next chapter, and we are excited to lead you through it. With that, I will now introduce our Chief Operating Officer, Mark.

Thank you, Mark. All right. Thank you, everybody. This clicker going here. Aftermarket expansion. I get to talk about some exciting stuff with you guys today. So let's dive into aftermarket and look at it from really through a financial lens. What you see here is the foundation of our high-margin recurring revenue engine of the business today. While capital equipment sales are vital for expansion, our aftermarket business is what drives our cash flow stability. We are currently leveraging an installed base of over 100,000 units, as Mark said earlier. This isn't just a service footprint. It's a massive locked-in ecosystem for recurring demand. In an industry where food producers face widening in-house knowledge gaps, our services are transitioning from reactive maintenance to mission-critical operational insurance. From a margin perspective, this is one of our most attractive revenue streams. By providing a single point of contact and data integration, we are moving up the value chain, shifting from a low-margin break-fix repairs to high-margin life cycle optimization. Our base of experience supported by 800 global professionals allows us to scale these higher-margin services without a proportional increase in overhead. We are effectively monetizing those assets in the field through their entire 15- to 20-year life. Finally, on the right, our philosophy of durable design all the way through part availability creates a defensive moat for us in the marketplace. This offers you, as investors, downside protection against market volatility and a compounding growth lever as we continue to expand our installed base. We are not just a manufacturer. We are a high utility service partner with a growing, predictable and highly profitable revenue stream. Now let's look at some numbers. What we are building is a highly predictable recurring revenue engine that gains momentum with every new piece of equipment that we sell. Looking at the case on the left. What we see here is over 50% of the aftermarket revenue comes from service contracts and long-wear parts. However, the real aha moment is on the right side of the graph. Opportunity grows with complexity. Historically, on a standard equipment sale, we might see a 20% service level agreement attachment at installation. As we pivot to total line solutions that Mark touched on earlier, and you will hear a lot about today, that attachment rate skyrockets to over 90%. We aren't just selling the machine anymore. We're selling a long-term high-margin service ecosystem. When you look at the life of the asset, the financial impact is staggering. We are currently capturing roughly 60% of the original purchase price back through aftermarket parts and services over the equipment's lifespan. But here's the takeaway for the room. Despite these strong numbers, we still see significant upside opportunity. As equipment becomes more sophisticated and our total line approach becomes the standard, that 60% capture rate isn't just the goal, it's our starting point. The previous slides were the what and how much. This slide is the where we're going. We are moving from being a vendor of machinery to a partner in enterprise total line solutions. Look at the trajectory from left to right. On the far left, you'll see a single piece of equipment, happens to be an oven here. In that world, the customer has limited in-house oversight and our role is limited to low-level reactive service, parts and support. This is a more commoditized, lower-margin space. As we move up the arrow, customer risk and requirements increase, and that is exactly where we want to be. As complexity grows, again, the customer needs our expertise. We move through operational maintenance where our high-touch adaptable service becomes their safety net, then to automation, where the sophisticated hardware and software of our equipment enable systems to become the brains of our customer's operation. And then finally, we reach enterprise level, all the way on the right. This is the Midera difference. We aren't just maintaining a machine. We're providing a full line integration, where we're giving customers the data and the leverage they need to optimize their entire facility's profitability. By providing a seamless coordination of technology, software and service, we create a massive amount of leverage. We move from a break/fix vendor to a strategic partner integrated into their C-suite financial goals. For us as a business, this shift is transformative. Every step to the right represents a higher switching cost for the customer, deepens competitive moats for us, and most importantly, significantly higher margins as we sell high-value integrated software solutions and optimization services rather than just switches and stainless steel. This is how we leverage our digital solutions and expertise to own the customer relationships from the shop floor to the balance sheet while partnering with customers to drive their growth engines. Now let's look at my favorite part, innovation and operational excellence. As Mark said earlier, innovation in this company isn't just a buzzword. It's a disciplined high-velocity process that contributes a massive $341 million in revenue over the last 3 years, 20% of our new equipment sales during that time. Many of you have seen snacks hanging around outside. Most of those snacks or a lot of those snacks were the result of innovations that we brought to the market that you could enjoy today or on your way home. Our innovation isn't just done in a vacuum. It's a 4-step feedback loop. It starts with voice of the customer. As Mark touched on earlier, everything here starts with the voice of the customer, identifying the real-world bottlenecks that those customers are seeing. We deep dive into the physics and mechanics of their processes. We give local teams ownership to develop the solution side by side with those end users. And then finally, and most importantly, we iterate and replicate those wins across our entire 100,000-unit global installed base. This isn't just theory, it's a working engine. Each one of our brands has a healthy and active innovation roadmap in front of them. Looking at our 2026 innovation funnel, the pipeline is robust. We currently have over 70 innovations in development across 17 different market subcategories. Crucially, we are balancing our risk. While 20% of these are modernization innovations, keeping up with our existing customer base, we also have 12 game-changing innovations on deck. These are breakthroughs that define new categories and expand our total addressable market. In short, our aftermarket base gives us insight into how to innovate. And our innovation engine gives us the new and existing customers new value for them. And this is how we ensure that Midera doesn't just lead the market today but defines it for the next decade. We discussed some of our market-facing strategies. Now let's look at the engine under the hood. This is my favorite part. The Midera Operating System is how we translate focus into margin expansion. It's built on 5 pillars: a lean toolbox, a robust quality system, aggressive technology application, a resilient supply chain and intelligent design. These aren't just departments. They're a unified discipline designed to strip out waste and grow our bottom line. To understand the real-world impact of this system, look at the technology application example on the right. In a traditional manufacturing environment, a highly skilled welder can produce around 17 inches per minute of weld. By applying the technology pillar, we've integrated a cobot into our workflow. These cobots don't just work faster, but act as a workforce multiplier by working alongside our skilled welders. That's a 7x uplift on a critical manufacturing process that exists across almost all of our facilities. But the value goes beyond just speed. This automation drives consistent quality, improved safety and recurring -- and reducing costly rework and insurance liabilities. More importantly, it allows us to reallocate our skilled human capital to more complex, higher-value tasks that automation simply can't touch today. The takeaway here is simple. We have an opportunity to make operations a meaningful driver of margin. With our focus post-spin, we can apply our resources and incentivize focused experts who do nothing but find these wins. Our operational system builds on Midera's -- on Middleby's foundation, ensuring that as we grow, we don't just get bigger, we get systemically more profitable. Turning to the next slide. Let's discuss how we institutionalize lean excellence through the Midera Operating System. We don't view operations as a must-have function. We view it as a toolbox to enable a strategic weapon to succeed. At the base of everything is strategic plan alignment. Every action on the shop floor or in the supply chain is anchored to our long-term growth objectives. We are ensuring that from the CEO to the front line, everyone is pulling in the same direction. As we move up the maturity curve, you'll see our core pillars. In the early stage, we focus on visual management, Gemba reporting, getting our leaders to the floor to address challenges real time. Moving into the mid-tier, we are scaling proven methodologies like 5S, TPM, and underneath that, highlighted SQDC&G framework, which stands for safety, quality, delivery, cost and growth. This isn't just an acronym, it's a mentality focused on relentlessly eliminating waste and driving accountability. At the top of the house, we reach a mature operations. This is where we leverage advanced tools like just-in-time planning, innovation monetization and developing a multiskilled workforce to create an agile environment capable to adapting to market shifts instantly. We are also prioritizing technology integration to address our most complex operational challenges, ensuring that our margins remain industry-leading even as we scale. To be clear, we are still very early in this journey and have a long way to go to maturity. But by formalizing these processes today, we are making operational execution a permanent strategic advantage for Midera. We are building a culture of get it right the first time every time, which is the ultimate driver of long-term shareholder value. Operational excellence doesn't just stop on the plant floor. It extends all the way back to our 1,800 key suppliers. While our steel sourcing remains strategically regionalized to protect against global volatility, our technology sourcing is broad and diversified. The critical takeaway here is the lightly tapped opportunity to leverage our scale and focus. We are currently working to consolidate our supplier base to maximize our buying power and drive down unit cost. To achieve this, we use a framework of resilience and cost analytics. We don't just buy parts. We have a plan for every part. By focusing on reducing the 7 types of waste and utilizing value stream mapping, we are ensuring that every dollar spent is optimized for both cost and speed. We aren't just reacting to the market, we are using purchasing signals and real-time analytics to stay ahead of it. Our supply chain roadmap for the coming year is clear: consolidating suppliers, implementing full systems across our organization to drive up on-time delivery performance and then we're moving to a fully integrated data-driven procurement model. Finally, the 4-step process on the bottom, the playbook is simple and impactful, delivering a customer-friendly financially appealing result from our supply chain efforts. Thank you for your time today. And let me turn it over to my friend, Peter, to talk a little bit about the protein business. There you go, my friend.

Hi. This is Peter Jongen. I hold a master's degree in engineering and I've been working in the food processing industry for over 25 years. Before I joined Midera, I was working for Marel. In the last 15 years, I've been focusing on food -- on protein-related activities. I've been with Midera for over 10 years, and what makes Midera special for me is our focus on the brand, our entrepreneurship and the closeness we have to our customers. The last 5 years, I've been Group President, Slicing, Loading and Packaging (sic) [ Packing ]. Today, I'll walk you through the protein group at Midera, covering our portfolio, key market trends customer case and our strategic priorities. To set the scene, the total addressable market for equipment in the food processing industry is $32 billion a year. This substantial market, combined with shifting consumer demand and our total line solutions, creates strong opportunities for us. Let me introduce you to our brands. This slide shows you our 13 brands in protein, and on the bottom, 7 brands that we share with bakery. We have organized them in 4 categories. First is the thermal processing group, where we have 6 dedicated brands, and together with Scanico and Frigomeccanica, we've got 8. With this group, we have key unique capabilities covering cooking, heating, drying, pasteurizing, freezing and preservation technologies. Then we have the processing and preparation group, with 2 brands covering grinding, mixing, emulsifying, pressing and much, much more. Next, the slicing, loading and packaging group, 3 brands that ensure efficient portioning and final packaging. And finally, facility automation with 2 brands from the protein group and 3 shared brands enabling us to get end-to-end integration and smart factory solutions. This structure allows us to combine specialized expertise with integrated total line solutions, which is increasingly what our customers are looking for. Let's look at some trends shaping the protein industry. First is what we call K-curve. At the upper end, we see growth in premium products like charcuterie, beef and clean label foods. These are fresh, minimally processed, high-quality products. They align well with technologies like to heat, pasteurization and advanced cooking and drying solutions. At the lower end, we have value-based products such as hotdogs, poultry and deli items. These focus on convenience and quick preparation. Here, efficiency is driven by best-in-class preparation, thermal processing, packaging and especially automation to reduce costs. Midera is supporting both ends of the spectrum with our total line solutions and our innovative products. The second trend is the need for automation, driven by labor shortages and rising labor costs. Customers are increasingly looking for fully automated solutions with minimal operator requirement, and that is exactly where our integrated approach adds value. Third trend is lifestyle changes are reshaping the demand. Urbanization is increasing the need for convenience food like case-ready, ready meals and deli products. Younger generation, especially Gen Z, are driving proteinization, shifting from powder and shakes to portable protein foods. At the same time, trends like GLP-1 treatment and broader dietary shifts are increasing overall protein consumption. All of this reinforces the importance of flexible, efficient and scalable production solutions. To bring this to life, let's look at a customer case. This is a well-known global food manufacturer based in the U.S. building a new greenfield facility. Traditionally, such a plant would require around 1,300 operators, creating significant costs and complexity. The production process was also highly complex with multiple steps across different products and a strong demand for the product. Customer needed a fully integrated and automated solution. Midera delivered a total line solution, including material handling, thermal processing and cleaning and sanitation systems. We also integrated the intra-logistics and storage, which was critical due to the strict hygienic requirements. [ This held ] the system running with tens of millions of dollars. The results were very compelling. Customer achieved more than a 3% increase in yield, reduced headcount by over 50% and improved the operational margin by more than 5%. This resulted in a payback time way less than 3 years. This clearly shows the impact of automation and installation. Finally, let's look at our strategic priorities for the protein group. First, expanding our product offering. We've recently added capabilities in areas like portable protein foods and charcuterie, allowing us to address higher value segments. Second, expansion. We're leveraging Midera's global footprint, modernizing the installed base and driving innovation through a strong pipeline of protein and total line solutions. We also see strong growth opportunities in Brazil through our local brand, MaxMac, and we are increasing our presence in EMEA through the Italian innovation center. Poultry is our fastest-growing product group. Last year, we grew over 30% in revenue, like Mark mentioned earlier. Third is the aftermarket. We're expanding service contracts tied to new equipment installations and growing our global field service team. This not only drives recurring revenue, but also strengthens customer relationships. And finally, M&A. Acquisitions help us fill white spaces in our total line solutions and target fast-growing segments where we are not yet a market leader. Cultural fit remains an important factor in this decision. In summary, the protein market is growing steadily and becoming more complex, driven by automation, lifestyle changes and evolving consumer demand. With our strong portfolio, integrated solutions and clear strategic focus, Midera is well positioned to capture this opportunity. Thank you for your attention. Let me now hand over to Andrea to talk about the bakery group.

Thank you, and good afternoon. My name is Andrea Colussi. I've been in the industry for the last 28 years. And my family has been the previous owner of Colussi Ermes. Colussi Ermes is a company specializing in industrial washing equipment for the food and pharmaceutical industry. The company has been acquired by Midera in 2022. In 2017, I had the honor of meeting Matt Fuchsen and Mark Salman. And from there, we started the collaboration. I was selling my industrial washers to the bakery and protein group for their total line solutions. This time has been quite important to me because I had the opportunity to learn how the Midera philosophy was working. Our group of companies managed to work together with an entrepreneurial approach towards the global market arena. A few years later, when my company -- when my family in 2022 decided to sell the business, we decided to stay with Midera because it was the right choice to continue the legacy of our family to continue dreaming and innovating. Today, my family is still leading Colussi. And I can tell you that investing the future into Midera, it was the right choice. Today, I'm the Group President for the Bakery sector of the Midera Group. The group consists of 13 companies plus 7 that we are sharing with the protein group, companies that are quite unique per se, where their essence is to work with a decentralized organization where each brand maintains its own identity and organizational independency and where each president retains his own entrepreneurial approach towards the industry. The group serves a broad range of end markets within the bakery sector, including products such as celebration cakes, muffins, buns, cookies, crackers, pizza and focaccia. This product portfolio spans the entire industrial baking process, including dough mixing, shaping, sheeting, lamination and baking and cooling. And from the automation point of view, we are capable of providing integrations such [indiscernible], washers and slicers and [ makers ]. The group is very unique because it's very flexible, can cope with very industrial large projects or can cope also with small artisanal segments. But their competitive advantage is to be able to evolve with the market trends that we are dealing with today. Market trends that -- sorry, the market trends that can be defined as shift into the -- towards the results driven culture where consumers are engaging more often, but in a smaller scale. This is often seen and accelerated by the increased dietary awareness, including GLP-1 users, driving demand for [ minimize ]. We can see also the growth of products such as sourdough and seasonal bread with a long fermentation, cleaner product, cleaner label. And from the industrialization and automation, we see a dual trend into the market globally, where developed markets are prioritizing artisanal and specialty products to clean label, while developing markets continue to drive volume through industrial and indulgent segments. We should also mention the sensory experience, the products that are generating with the texture that sensory experience of cracking, snapping or oozing. And in terms of lifestyle changes, the GLP-1 are reducing the overall consumption of commodity products by driving a higher quality bites, smaller portions, as mentioned earlier, high fiber, better-for-you bread. Now I would like to introduce to you a unique case study about pinsa. It's not pizza, it's pinsa. I don't know if all of you know about it, but it's a typical Italian flat bread with having characteristics of high hydration, long fermentation and unique ingredients. Why we selected this product is because lately, thanks to the ongoing contact with the market, Midera has seen the growth of this product. And thanks to the total line solutions that we have developed, we are pretty much the only ones capable to provide to the customer a complete line. The essence of it is that we have the complete knowledge about the product, complete knowledge about the process and how to integrate all the equipment together. So the customer has the opportunity to have a line with a common software data collection, AI integration for process optimization and predictive maintenance, a sustainable approach, including energy-efficient components and heat recovery and probably the most important, accelerate the time to market. Thanks to this [indiscernible] characteristic long fermentation, the cost of recipe is reduced by pretty much 40% to 60%. And the other advantage is that the payback is within the 2 years' time. Now I would like to mention on this slide something that I'm personally close to because it involved my personal time, not personal time, my time for the last 1.5 years. And it is the Centro di Innovazione, our latest innovation center. A unique structure that I invite you all to visit. It's located northeast of Venice, Italy. It covers a surface of 80,800 square feet and required an investment of about $23 million. The visitors have the unique opportunity to visit the center, extremely educational. You can learn from visiting the flooring, the panels, the utilities, the piping, all what has been placed in there to simulate a real plant, a real industrial plant. It's not a showroom. It's a dynamic environment where the customer can test industrial units with his own ingredients, can test before investing and is capable also to interact with engineers, food specialists, technologists. And educationally, which is very important, we invested a lot into possibility of hosting university classes. We are currently having a Master in Food Science. We are also using the center internally as a group of companies to be self creative, on how to innovate, how to become better, how to share hygienic concepts within the group, bakery and protein. As today, within only 7 months from the moment that we opened the center last October, the plant managed to generate about $33 million orders. So it is really, really unique. And again, I invite you all to visit. And finally, I would like to summarize all our strategic priorities into our total line solutions, of course, with a lot of focus into products such as pizza, pinsa, applications that are going to be very flexible because in the same total line solution, we'll be capable of handling pizza, pinsa and focaccia. It's quite unique. Nobody is capable of doing this nowadays. The expansion in other markets, EMEA or increasing our strength in Europe. The aftermarket, we are going to have dedicated and strategic locations to handle spare parts, reduce the responsiveness for the customer for service packages. And finally, with mergers and acquisitions, we're going to become stronger and stronger with partners that are going to add on, on innovation of our lines. So I would like to thank you for your time, and I'm going to pass it on to my colleague, Scott.

Thank you, Andrea. Good afternoon. How many people eat more Mexican food today than they did 5 years ago. This has been one of our primary drivers for our business, and we look to take and leverage this as we go forward. My name is Scott Ruhe, and I'm very excited to be leading the newly formed Snack segment at Midera. Over the last 35 years as CEO of our family company, I've helped grow it from $1 million to $74 million prior to joining Midera in 2024. Our core business at JC Ford -- JC Ford's core business has long been centered around delivering complete line solutions for the tortilla and tortilla chip industry, building on our original corn tortilla systems developed in 1945. From 2020 to 2024, our company experienced significant growth while transferring from California to Tennessee, positioning us for long-term scalability and operational efficiency. Today, more than 50% of our products are exported with Europe accounting for roughly 20% of our total volume. That experience in scaling, leading and growing our business over time naturally led to our next phase of growth. To further accelerate and leverage this growth, we joined Midera in 2024. Midera's strength in baking complements our leadership in tortillas. And together, we now have a powerful global platform. Today, I'm focused on leading the next phase as we expand beyond our traditional core into a broader snack segment. Looking ahead, I see a total addressable market of approximately $18 billion as we move into adjacent snack processing categories, including both front-end and in-line solutions. So the question becomes, how do we turn market opportunity into real scalable growth. It starts with the strength of the Midera platform and the partners we bring together. A key advantage of joining Midera is the immediate integration of complementary technologies across our platform. Several partners are highly synergistic with our full-line solution. Escher Mixers enhance our flower tortilla systems on the front end, Scanica cooling systems capabilities enhance all of our systems. Filtration automation improves oil management in our frying systems for tostadas, tortilla chips and taco chips. Spooner Vicars expands our thermal capabilities across our entire platform and Burford provides end-of-line packaging and bagging solutions. This integration allows us to deliver more complete efficient systems while increasing revenue per line and strengthening our value position to our customers. With that integration platform in place, the next piece is demand and market trends driving the demand are increasingly strong. The momentum behind our business is driven by powerful long-term consumer trends, one of the greatest being the Mexican food, which has been a major factor in our growth in the last 20 years. The Hispanic population today has reached 70 million or roughly 20% of our population. Mexican cuisine has become deeply embedded in the American culture. Mexican restaurants have grown from roughly 10,000 locations in 1990 to over 90,000 today nationwide. More than 5,000 Mexican specialty markets now operate across the country. At the same time, mainstream adoption to -- excuse me, at the same time, mainstream adoption continues to expand fast and casual, QSR chains like Taco Bell and Chipotle are rapidly introducing Mexican products inspired around the world. Traditional restaurants are incorporating wraps and tortillas into their menus. Globally, tortillas and tortilla chips consumption continues to rise, fueled major brands like Doritos and Mission Tortillas. Additional snack trends that are driving growth include rolled products like Takis in the snack food segment, better-for-you options, grain-free alternatives such as cassava, lentils and protein. Increased investment in categories include Frito-Lay's $1.2 billion acquisition of Siete, cassava based tortilla chip and tortilla and continued flavor innovations with bold and spicy profiles leading the market. So we have a platform and we have a demand. The next step is execution. How do we translate to real value for our customers? That's where innovation comes in. We are driving our innovation within traditional tortilla chip process, particularly food service, something many of you can relate to the bowls and chips they give out as first meal at the beginning of a Mexican restaurant. Today, there are over 100 systems across the U.S. producing corn tortillas specifically cut, packaged and shipped to restaurants that are fried fresh served at your table. That process dates back to the 1940s and '50s when tortillas were repurposed and famously leading to the creation of Doritos at Disneyland's Casa de Fritos. However, today, that process remains highly labor-intensive, requiring 4 to 6 people. It includes a staggering 4 to 24 hours of staging to reduce clumping. Our new in-line cutting eliminates labor by cutting directly within the process, removing a significant amount of labor with over 100 systems running across the U.S., a retrofit system of an existing tortilla line will pay back in less than a year with a $350,000 investment. When paired with our new corn tortilla systems are capable of producing over 40% more than our closest competitor or 100,000 tortillas every hour, which translates to 25,000 bowls and chips every year. This is a great example of how we create value at the product level. Now let me step back and show you how we create across our entire business. Looking forward, our strategy is clear and focused, continue to expand our full line solution capability across global markets, leverage the Middleby worldwide footprint through our Midera worldwide offices to accelerate international growth, to build a strong reoccurring aftermarket through service parts and upgrades, pursue strategic acquisitions that enhance our technology portfolio and market. In closing, when you combine a strong platform, a favorable market trend and proven innovation with clear ROI, I believe we are uniquely positioned to lead the next phase of growth in the global snacking market. Thank you. I'll now hand it off to Matt Fuchsen, who leads our M&A strategies.

Thank you, Scott. Good afternoon. Before I jump in, I would be remiss if I did not recognize the past 15 years spent with Middleby and to extending Midera, thank you to the Middleby Board for positioning Midera for our next chapter as a singularly focused growth company, colleagues that we have had that pleasure to work with and learn from daily. But most importantly, it's the partnership and moreover mentorship of our CEO, Tim FitzGerald. Thank you all. Now let's roll it forward. I'm excited and honored to be part of this fantastic Midera team. I'm going to spend the remainder of our 15 minutes walking through Midera's M&A strategy. How we think about capital deployment, how we manage risk and most importantly, how this has become a repeatable engine for long-term shareholder value creation? At Midera, M&A is not something we do opportunistically based on where the cycle is. It is an embedded operational capability supported by a clear framework, a proven team and decades of execution. I would like to highlight 4 key takeaways about our M&A framework before we get into further details. First, our approach is disciplined and focused. We do not chase scale for its own sake. Every acquisition must strengthen our platform in a very specific way by either expanding total line solutions, adding differentiated technology or deepening our aftermarket and service penetration. That discipline is what allows us to do deals consistently across cycles. Second, a highly fragmented market with more than 2,500 food processing equipment manufactured globally. That fragmentation creates a long runway for disciplined consolidation. Third, we are builders, not collectors. We're not assembling a portfolio of loosely connected businesses. We are building an integrated global automation company focused on high-value further processing where the whole is more valuable than the sum of the parts. That mindset drives both how we select targets and how we integrate them. Finally, we view M&A as a value compounding mechanism, not a growth shortcut. Our framework is designed to deliver attractive ROIC, margin expansion and compounding free cash flow, not just near-term EPS accretion. And these elements align, shareholder value creation follows. When you apply that framework consistently, what you get is what is reflected on the chart shown, the M&A track record. For us, M&A is not an aspiration. It is a proven capability. Over the past 20-plus years, this platform has been built through 30-plus strategic and complementary acquisitions, each selected for a specific reason, investing roughly $850 million into the platform and importantly, doing so in a disciplined, repeatable way that has driven sustained revenue growth, margin expansion and strong free cash flow across cycles. Acquisitions have not been about scale for scale sake. What's equally important is where we deploy capital. These acquisitions have expanded our presence across protein, bakery, snack, sanitation, automation and packaging, each one incrementally strengthening our total line solutions, allowing us to move forward from selling individual machines to becoming a long-term solution-based partner to our customers. As the platform expanded, it has also created natural operating leverage through broader customer relationships, higher aftermarket penetration and better utilization of our global Midera operating model that Mark Bowie took us through. This is how we think about M&A, not as discrete transactions, but as a rolling flywheel that repeatedly compounds shareholder value. Just as important as what we buy is what we don't buy. And I would like to elaborate on that, how that disciplined framework is. Our portfolio philosophy is intentional and systematic. We focus primarily on small to midsized targets, predominantly tuck-in acquisitions, but always evaluate every target with an open mind to the right larger deal. We never jeopardize discipline, integration capacity or realizing our KPIs. The tuck-in approach is crucial. This approach reduces execution risk and avoids acquiring unwanted assets that may be embedded in larger acquisitions. That matters because bilateral trust-based transactions is how you win deals without chasing price. Every target is evaluated through the same lens across all acquisitions. Does it strengthen total line solutions? Does the culture fit our entrepreneurial operating model? Does it expand access to growth markets or aftermarket revenue? Can we add clear operational and financial value? In summary, this is an intentional portfolio destruction -- construction by design, guided by a clear and disciplined playbook. It's good to lighten up the mood. Midera's disciplined M&A is possible because of our strength of our funnel. Referring to the center of the slide, today, we are tracking more than 100 companies with over 30 active opportunities under evaluation. Approximately 90% of these opportunities are sourced internally through long-standing relationships, not auction processes. That proprietary sourcing is critical. Off-market transactions tend to be better aligned culturally, carry less integration risk and result in more attractive valuations. As noted on the right part of the slide, it is also why roughly 75% of our funnel consists of tuck-in bilateral transactions. A very important fact about this funnel is it exists within a highly fragmented market. As noted, $70 billion worldwide with 91% of white space. There are more than 2,500 food processing equipment manufacturers. That fragmentation creates a long runway for disciplined consolidation. This deep market, along with strong inbound relationships and internal entrepreneurial network of former owner operators with generational relationships in the industry is how we are able to repeatedly apply our playbook. We don't need to stretch or change our criteria to stay active. Our significant funnel allows us to be patient and selective. Walking away from deals is just as important to our discipline as closing the right ones. The question we get most often is not can you do M&A. It's how you can continue to do it well over and over and over again. The answer is the Midera execution and integration playbook. Midera is an acquirer of choice because our playbook, we respect brands. We keep the decision-making at the brand level close to the customer, further deepening our ability to quickly solve customer problems by bringing the right expertise to the table the first time. Former owners often continue to run our businesses long term. In fact, roughly 1/3 of our brands are still operated by former owners. This is not accidental. Scott and Andrea are both great examples of that. It also keeps the entrepreneurial engine running while layering in advantages of scale. From an execution point of view, the playbook is built around speed, clear accountability and focused approach to synergy realization with total line solution cross-selling, execution of the Midera operating model and aftermarket expansion. This is not theoretical. Our execution and integration capabilities are institutionalized. The main reason for the spin-off is to allow the historical M&A execution team to be 100% focused on Midera's inorganic growth. This team on average has closed 7 deals annually since 2015. Our deal team works side-by-side with a dedicated integration team, inclusive of our COO, Mark Bowie, our group presidents with a clear mandate to grow their respective markets, and a brand champion assigned as an integration partner. It is the integration continuity that preserves customer relationships, institutional knowledge, innovation momentum and accelerate synergy realization. In parallel, Midera's global scale, procurement capabilities and operational excellence elevate our brands to a level that they could not have achieved independently. Bottom line, reputation matters, and this is why sellers trust us. Being known as the acquirer of choice who respects legacy, invests for growth and delivers on commitments gives us access to better opportunities and reinforces the quality of our funnel every day. This slide pulls it all together, and this is really where the math starts to matter. This is a snapshot of value created across multiple acquisition vintages. Across these 3 examples, or all of these examples, revenue scaled meaningfully, adjusted EBITDA margins expanded materially, returns exceeded our underwriting through TLS cross-selling, implementation of the model and aftermarket and growth synergy realizations. Equally important, the 4 most recently closed acquisitions since 2014 are tracking at or above diligence underwriting. Given our recent and current macroeconomic environment, this performance speaks to our disciplined diligence and underwriting process, execution of the Midera operating model, as well as the resilience of the further food processing end market. Speed matters, we focus on capturing synergies early and quick, which accelerates ROIC and derisks the investments we make. That's how we consistently convert strategic rationale into measurable shareholder value. So where does this leave us as a stand-alone Midera? Quite simple. We believe we are entering the strongest chapter yet of the story, the inflection point, both from an organic and an inorganic point of view. Mark Salman, Mark Bowie, our Group Presidents, illustrated the inorganic growth opportunity and now adding in the compelling inorganic M&A growth opportunity driven by a highly fragmented market, a deep pipeline of attractively sized culturally aligned targets that support targeted deal velocity and a strong balance sheet that gives us flexibility and patience. Post spin-off, the model becomes even more powerful because financially and moreover, human capital allocation becomes singularly focused. Organic reinvestment first, disciplined and accretive M&A second, with a net leverage framework below 3x. We don't need to stretch. We don't need to chase scale. We simply need to repeat what has worked for the last 15 years with a sharper focus. The objective is clear. Target double-digit plus ROIC by year 3, sustained margin expansion, EPS and cash flow accretion in year 1, each leading to compounding shareholder value. That is the opportunity ahead, and we believe we are uniquely positioned to capture it. In summary, M&A Midera, it's not about ambition, it's about execution. And with a stand-alone balance sheet, a focused and disciplined mandate, a proven playbook, we believe the inorganic growth opportunity is powerful lever for long-term value creation in front of us. Thank you for your time today. And while our colleagues at Middleby introduced you to the virtual Amy, I'm going to introduce you to the real life Amy.

Thanks, Matt. I'm excited to be joining Midera as a CFO as we enter what really is the next chapter of an already impressive growth strategy and growth story. What I want to do with my time today is share the financial case for Midera as a stand-alone company, what is already working, what will change as Midera becomes a stand-alone pure-play industrial automation company and how to think about our financial outlook through 2028 and the capital allocation priorities that support our growth. If you remember only 3 things today, I would like it to be this. We are already a high-quality compounder with 20 years of truth behind us. The spin improves focus and sharpens capital allocation priorities to support growth, and we have the balance sheet to play offense from day 1. At a headline level, Midera begins with 4 clear strategies and strengths. Market-leading brands with deep customer trust and solutions that solve real customer problems. We help customers improve throughput, labor efficiency and yield, and we help them bring new products to market. We stay close to them in ways that few peers can match. We have exposure to globally growing and resilient end markets, where CapEx is essential to our customer strategies. It's not discretionary. The Group President shared tangible examples of how we are helping our customers grow and meet their own customers' needs through total line solutions. We have a clear and credible path to margin expansion, driven by mid-single-digit top line organic growth, operating system execution and recent acquisitions maturing toward our expected returns. And last, a clean balance sheet and strong cash flow as we spend, giving us flexibility from day 1 while keeping us disciplined. As Matt noted, we have an active acquisition pipeline, a repeatable playbook and the balance sheet to act. Midera is spinning off from a position of strength, already a high-quality industrial technology business, and the separation simply brings more focus to both the performance story and the capital allocation story. With that context, let me start with the financial profile because it shows the durability of the engine we are building on. And what we are building on is a business that has already been performing. Looking at Midera Food Processing, based on historical segment reporting under Middleby, sales grew from roughly $440 million in 2019 to more than $850 million in 2025. That is a 12% CAGR, including M&A and over 5% organic growth. During that same period, segment adjusted EBITDA nearly doubled. This is a business with a strong track record of profitable growth. And that history matters because it underscores why we believe the model is resilient and repeatable. Our end markets invest against secular needs like automation, food security, food safety and population growth. Add to that steady replacement demand and the fact that nearly 40% of our sales are recurring aftermarket, and you get a demand profile that is less cyclical than most industrial verticals. Now I do want to take a minute to help investors understand how to evaluate the business. Quarter-to-quarter results can be lumpy. We sell large complex solutions that my colleagues just talked about and shipments can move between quarters based on customer readiness, installation schedules and project timing. In any given quarter, sales can shift simply because of project timing, not because demand has fundamentally changed. So the right lens to think about Midera's growth is either a 6-month or 12-month rolling performance, where the underlying trend is much clearer. We are going to measure the business that way internally, and we encourage investors to do the same. Beyond an impressive history, we also start as a public company with an impressive financial profile. In addition to historical Middle East segment reported results of double-digit sales and adjusted EBITDA CAGR from 2019 to 2025 that I just spoke to. We delivered estimated stand-alone adjusted EBITDA margin of 16.4% in 2025. That is industry-leading even in what was a tough year, and we have a clear path to expand from here. We are also benefiting from strong demand. We have averaged a book-to-bill above 1 for the last 8 quarters with order and sales pipeline activity that supports our 2026 guide and beyond. And finally, we start with a strong balance sheet. Net debt is estimated to be between $200 million and $225 million of spend, providing liquidity along with attractive levels of free cash flow to fund reinvestment, M&A and provide resiliency through any cycles. But this is just the starting point on this slide today. It's not the aspiration. And that is why we are confident in what we are forecasting going forward because, frankly, it looks a lot like what we have a history of already delivering. And I want to spend a few moments revisiting 2025. We experienced margin pressure last year that was identifiable, temporary and is already reversing. In 2025, 3 dynamics were happening at once. Sales growth was modest, and it was driven by acquisitions. So reported growth did not translate into margin last year. And adjusted EBITDA margin was under pressure versus 2024, driven by identifiable headwinds rather than a change in underlying demand, and I'll speak to that in a moment. At the same time, we saw backlog and orders accelerate into year-end, setting up a better absorption and mix environment across all 3 of our platforms, protein, bakery and snacks as we moved into 2026. As I said, the margin pressure we experienced last year was not structural. It was the result of timing and temporary cost headwinds we can offset and grow through. Specifically, margins were impacted by 3 things: acquisition dilution. Newly acquired businesses typically enter below our platform margin, and this had a dilutive impact of about 100 bps last year. Shortly after an acquisition, we launched detailed strategic plans with the leaders in the acquired business to lift the company's performance to our profitability expectations. And this is usually a plan over a 3-year time horizon. And as Matt demonstrated, we have a track record of significantly improving margins over time. And we expect these recent acquisitions to follow the same pattern. Second, inflation and tariffs have the largest impact. Given our long-cycle equipment backlog, often 6 to 18 months, cost headwinds can take time to reprice, and we expect them to persist until we work through the backlog, which we have expected to work through that backlog by the second half of this. And finally, reduced fixed cost absorption. During a period of customer hesitation last year, orders slowed temporarily, but they did not disappear. We made a deliberate choice to not take short-term actions that would compromise long-term growth because we had clear visibility into the sales pipeline even though it hadn't translated into orders yet. And you can see that ultimately, that happened in the fourth quarter with record backlog at the time that we closed the year. So now let's take a moment to look at how we started 2026. because the first quarter demonstrates the momentum we are carrying into Midera's spin. Based on Middleby's segment reporting last week, Food Processing sales came in at $224 million, up 34% from a year ago, with 25% organic growth. And this is not a one category story. We saw double-digit top line growth across protein, bakery and snacks. Segment adjusted EBITDA grew 38% to $41 million, with segment adjusted EBITDA margin expanding to 18.5% or 19.5% when you exclude the impact of acquisitions and FX. Importantly, we see a clear path to further margin expansion from here. The composition of our backlog is increasingly favorable from a mix standpoint. And our recent acquisitions are continuing to mature and contribute more meaningfully to profitability. These tailwinds give us real conviction that margins will expand as we move through the year. Orders in the quarter were $231 million, up over 25% from last year, and the number that underpins it all is the backlog. The backlog ended the quarter at a record $416 million, up 52% from where we were a year ago. That backlog is essentially sales that we have already won, and it gives us visibility into the rest of 2026 and frankly, into 2027. When we talk about confidence in our full year guidance and our multiyear forecast, this is why the order book is strong. The backlog is at a record and the margin trajectory is positive, and we expect it to continue. Now before I walk through the financial forecast, I wanted to connect it to what you have heard from my colleagues today because this is really the bridge between their presentations and the numbers that I'm about to share. Mark opened by walking you through the strength of our industry-leading platform with over 30 best-in-class brands, a large global installed base, diversified end markets and our innovation centers. And he made the case for why the industry tailwinds at our back, rising living standards, automation, changing consumer preferences and food security, among others, are durable and structural, not cyclical. Mark Bowie and the Group President, then laid out how we capture growth organically through total line solutions, market penetration and focused aftermarket growth. Matt walked through the M&A history and philosophy that we will believe will continue to compound value for our shareholders. And just as important, and I can promise you definitely Bowie's favorite. You heard how the Midera operating system drives our DNA, a results-driven, customer-centric, entrepreneurial-minded culture with the speed of innovation that is difficult for others to replicate. This is a proven formula and makes execution against this playbook believable and repeatable. This playbook is precisely why we have confidence in the financial framework I'm about to present. When you see our sales growth targets and adjusted EBITDA margin expansion, they are a direct output of these pillars working together. So how does sales growth build? We think about it as a stack, baseline market growth plus specific Midera growth drivers with meaningful M&A upside on top. As Mark discussed, based on industry reports and management estimates, we expect baseline industry growth of about 3% to 4% on average per year through 2028. That's what you would expect if we simply kept pace with the market, but that is not our goal. On top of that baseline, we had 2% to 3% above-market growth from our growth strategy. Total line solutions. Customers want partners that deliver throughput and uptime across full line, not point solutions. Our platforms are bringing new solutions to market that expand our share of wallet and deepen customer relations. Market penetration. We follow customers into new geographies with an asset-light approach, typically adding sales and service coverage as demand wars. We also localize innovation where our technology translates well into evolving consumer trends and regulatory needs and aftermarket growth, higher margin recurring sales and a natural pull-through from our installed base. We're scaling this through a proven commercial model and tighter execution across parts, service and upgrades. When you add those layers together, you get a forecast that is diversified by end market, by customer need, by geography and by sales type. This is diversity that builds resilience in our business model. Put these drivers together, and it supports 5% to 7% organic sales growth CAGR through 2028, built from structural demand and a clear above-market growth strategy. And on top of that 5% to 7% organic growth, there is M&A upside at an exciting level, which is supported by a repeatable playbook, clear return thresholds and increased stand-alone focus. It's important to note that this forecast is not dependent on hero assumptions. It's built for multiple growth engines that we can measure and we can manage. And it is aligned with the track record of performance that we have already delivered. But growth is only half the story. Let's look at how it converts to margins. In our business, margin expansion is typically driven by 3 things: absorption as volume improves, mix as aftermarket grows and productivity as the operating system scales across the footprint. That's why we're confident the low 20s estimated stand-alone adjusted EBITDA margin target is grounded in identifiable levers, not aspiration. By 2028, we're targeting sales growth above industry trends as we execute on our organic growth strategy and estimated stand-alone adjusted EBITDA margins in the range of 20% to 23%, reflecting the impact of sales growth, mix and operating system productivity plus maturing acquisitions. The path there is clear, and it's built from the same levers we've used historically. Volume and mix improved costs, fixed cost absorption and aftermarket growth improves both margins and cash conversion. Recently completed acquisitions mature toward our platform margin expectations through pricing, sourcing and commercial expansion. And the operating system drives efficiency through discipline with standard work, procurement leverage and operational productivity. And this is exactly the margin profile we want because it's supported by growth. We're not cutting our way to a number. It's backed by the operational discipline of the Midera operating system, and it's grounded in levers that we can control. Now let me spend a moment on capital allocation because this is one of the biggest advantages of being a stand-alone company, clarity of priorities and accountability for returns. Our capital allocation priorities are simple and disciplined, and I'll describe them to you in the same way we'll run them internally. First, organic reinvestment, protect first, then grow. CapEx will largely be focused on maintenance needs, automation and improved operational capability. Then after we invest in ourselves, we expect to execute on our disciplined M&A strategy. Matt talked in depth about the strict financial framework and philosophy that we have for M&A, but to recap a few key points. We are returns-driven, targeting double-digit ROIC by year 3. We expect acquisitions to be cash EPS accretive in year 1. And our primary focus on M&A will be building out gaps in our total line solutions or entry into new markets or categories. We will invest organically and inorganically with balance sheet discipline, which we define as managing within a net leverage framework below 3x, allowing us to preserve flexibility while maintaining a strong balance sheet. As a stand-alone company, every capital decision is made through a single lens, building the best food processing technology platform. This gives us clear priorities and clear accountability for returns. And this focus is a meaningful unlock and it's enabled by the balance sheet that we're starting with. And this balance sheet was designed for growth and flexibility. At spin, as I said, we expect net debt of $200 million to $225 million, which is expected to result in net leverage of approximately 1.25x, enabling ample firepower to continue our track record of disciplined M&A. We anticipate having a simple debt structure, a committed revolver with access of up to $1 billion in liquidity, providing flexibility at an attractive financing rate. We expect free cash flow conversion of 50% to 55% of adjusted EBITDA, supporting significant reinvestment in the business, along with disciplined M&A. And finally, our free cash flow forecast and our leverage capacity, we expect to give us an estimated $700 million plus of M&A firepower over the next 3 years. We intend to use it selectively with discipline and in service of the strategic priorities that we've laid out today. Let me bring it all together and talk about what it means in the numbers, near-term in 2026 and then in the trajectory through 2028. The way to think about 2026 is better volume, absorption and pricing as the backlog converts and we work through orders and ongoing acquisition integration that the margin pressure we saw in 2025 is beginning to reverse. For 2026, we are guiding to sales of $915 million to $945 million, reflecting backlog conversion and continued execution on our growth levers. Estimated stand-alone adjusted EBITDA of $154 million to $176 million and estimated stand-alone adjusted EBITDA margin expansion of over 100 basis points, which we view as a realistic first step on the path to the low 20s. As you look through to 2028, our framework remains consistent. 5% to 7% organic top line growth on average per year through 2028, driven by the 3 pillars of our growth strategy with M&A upside from there. 20% to 23% estimated stand-alone adjusted EBITDA margins on net organic sales growth as growth, mix, operational discipline and acquisition maturation compound, strong free cash flow generation of over 50% of adjusted EBITDA, supporting reinvestment and value-creating opportunities and leverage managed well with inside our framework, preserving our flexibility. These targets are designed to be achievable, credible and well supported. They are grounded in our track record and in our current visibility. So to close, let me end with where I started. Midera is a growing, high cash-generating industrial technology platform with a clean balance sheet, a proven track record and M&A playbook with a clear path to above 20% estimated stand-alone adjusted EBITDA margin. We are excited about the future, not because it's a new story, because it's not, but because it's more focused continuation of a model that's already working with clear reporting and more focused capital allocation. And with that, we're going to turn it over to the Q&A portion of the call. I invite my colleagues.

Just as a reminder, we do have microphones in the room. So if you do have questions, please raise your hand and allow for our mic runners to find you. And for the benefit of those in the room as well as those listening on the webcast, if you introduce yourself with your name and the firm you are from followed by your question that would be greatly appreciated.

Justin Ages, CJS Securities. With the focus on total line solutions, can you tell us a bit of how much -- what percentage of your sales are total line solutions and how that dynamic works between your sales reps going to customers and saying, would you like total line solutions or your customers saying, we've seen what you guys can do, and we're interested in the solution?

Let me try to address the second part. The first part, we don't share the specifics of sales between total line solution and replacement equipment. The total line solution go-to-market strategy is very simple. We have brands that sell products, replacement products. And when there is a big project there is a new capacity or replacement of the line. Our brands get together. There is a category manager that drives this whole initiative. And together, they engage with the customer and create the solution effectively so that they said and that there is one decision maker that basically drive that transaction.

From an inorganic point of view, where we're at today is not where we're going in the future. From an M&A point of view, we try to fill in white space within the total line solution, look for other new total line solutions in growth markets. So where we're at today is clearly a baseline to where we are going to be in the future.

I just wanted to ask in terms of the history of acquisitions in the food processing space, what is the typical multiple being on sales or EBITDA and has that environment shifted over time with interest rates changing?

That's a great question. Multiples over the history of the platform changed, obviously, from the -- between mid-2010 to COVID era and after. But if you kind of look at the platform construction as a whole with the roughly $850 million of capital deployed at roughly an average of 11% EBITDA, you can kind of back into the math.

Mig Dobre with Baird. On your margin targets, there's a little bit of tension, at least for me, between the Midera operating system generating 200 to 350 basis points of uplift in a short amount of time in three years versus the history of you being able to acquire businesses and expand margin post-acquisition. So what's not clear to me is what is it that you're doing now that you didn't do before? Because obviously, you have to do something right in order to integrate those acquisitions and be able to get more margin to begin with, but something is missing, right? And apparently this is what this operating system is supposed to bring in...

So maybe let me take the first shot at it and maybe you can add some more color. If you look at our history as a segment reporting within Middleby, every year since the year 2021, we've been adding 100 basis points to our EBITDA margin. And we got to those numbers, we got -- in 2024, we got to 25.6% EBITDA margin. So we've done it. We've been there before. So as we have a new -- we're separating and we're now -- we have to have the public company cost 100 basis point improvement every year from a lower position is something we've done for the past 4 years, 5 years.

I mean from an acquisition point of view, obviously, as a stand-alone company, there's going to be 100% focus both on the execution but moreover on the integration. We've built a team ready and scalable for growth and with the addition of Mark Bowie and the promotion of group presidents, we're putting muscle behind the exercise. So I mean...

Yes. I think that's it. Obviously, we want to build muscle. We want to pull on all the levers. We want to continue to execute on our new acquisition playbook and strategy to develop new goals. So we want to double and triple down on our operational efficiencies. We want to make sure that we're extracting that value out of mature organizations underneath our umbrella but also the new organizations that join us and really put that operation system as groundwork how we conduct business day in and day out. We want to couple on top of that a more aggressive approach around our supply chain to protect those margins and really double and triple down our efforts after the separation after the spinout and focus on the areas we have the biggest impact from a supply chain standpoint as well. You then lay on top of that to continuing to stay after our pricing, and you really have 3 levers you can pull to extract more value. I think we're being pretty conservative in how we're looking at it, but we want to make sure that we are very focused on pulling on each one of those 3 levers underneath our umbrella.

And let me -- I think I'll just add to the math there. So the 100 bps that comes from the M&A maturation, that's from the 4 acquisitions that we've acquired over the last 2 years. So just when you take their percent of sales as a percent of total, their individual margins grow much more than that, but the impact on that to consolidated margins is about 100 bps. And when you look at the implied or forecasted improvements in margins from the Midera operating system, that comes out to be a little over 100 bps a year, about 1% COGS cost reduction. We're well on our way as we've guided 2026 to deliver that, and we expect it to move a little faster as we get the Midera operating system embedded take advantage of the supply chain opportunities that are out there and some of the efficiency improvements we can drive. So that is kind of how the math works, if that helps.

If I may follow up then, we didn't talk much about pricing and price cost. Obviously, there's incremental cost that you can experience as a public company, but presumably, you have inflation of all sorts in the business that you have to deal with. So can you talk about your assumptions as you look at the next 3 years in this regard to price cost dynamic? And are there opportunities in your business, whether it's on the aftermarket side or anything else that we should be aware of where pricing itself can be a margin driver and a margin lift in the next 3 years?

I'll just answer on the total line solution, we price for value and bring a lot of value to our customers. So we can price our total line solution to protect our margin on the other levers that we have, obviously, on the aftermarket, we typically have pricing adjustments to make sure that we are protecting the margins as well. And then we have the operational improvement that will add to our profit margin and supply chain initiative and all that Mark talked about in operational excellence and efficiency.

I think, Mig, the reality of it is pricing is super sensitive during this time. I mean, depending on what day it is, what hour it is, the supply chain dynamics change based on what's happening out there either from tariffs or inflation or even currency risk. So staying very close on pricing and making sure that we are extracting as much value as we can and staying ahead of that curve is important. As Amy talked about in 2025, that backlog is big, and we want to make sure that we're shifting that exposure as much as we can to our customer on some of those near-term risks, but also staying after pricing to make sure that we are reducing that risk as much as we can internally as we execute on that backlog.

Mitch Moore with KeyBanc Capital Markets. Maybe just to add on Mig's question a bit. Some of the operational excellence initiatives Mark talked about the Midera operating system, how much of that is currently like culturally embedded in the business versus maybe needs to be developed a bit as Midera kind of evolves into an independent company?

Yes, Mitch, let me take that one. The reality of it is we have businesses across pretty full spectrum. We have businesses that are early in the Midera life cycle that are pretty immature. They have strong entrepreneurial management teams that are very customer-focused. That's part of our fit profile. We want to make sure that they have that embedded, but they don't have some of those more mature operational toolbox items that are in place from visual management and countermeasures and really getting strong strategic plan alignment and then driving that from the C-suite if you will, all the way down through the Gemba level where the work is actually being done. But then we have businesses like Scott's business out in Tennessee with very strong visual management, very strong countermeasure, a wonderful Gemba culture with strong safety guidelines that are embedded in it. So if you look at our businesses, you'll find examples all the way across. And frankly, we don't have any business that I've seen that I would say is mature along that journey. So I view all of that as potential upside and potential opportunities for us to expand margin going forward. Yes, I am looking forward to. As you can tell, I light up like a Christmas tree when I talk about it.

Brzezinski, PSQ Capital. I wanted to ask a question on the management incentive comp plan. Can you give us a sense what the KPIs are for CEO and CEO minus 1 level, and how they're weighed in the incentive comp plan?

I think to answer that question simply is those decisions have not been finalized as the Midera Board and the comp committee won't be formed until we spin on July 6. But what we expect is for the incentive plans to look similar to what Middleby's incentive comp plan. So for the short-term incentive comp, those metrics are based off of EBITDA margin, EBITDA and revenue. And then for the long-term equity plan, it's a mix of RSUs and PSUs with similar metrics and with ROIC added as a comp metric recently. And I would say to answer like that will be kind of all the way through at least the first kind of 3 reporting lines of the business that those incentives will be in place.

Thank you for those questions. Any additional questions from the group? Okay. I think that concludes our Q&A session. I'll hand it over here to your host Mark Salman for some closing remarks. Thank you.

Well, thank you. We are committed to making sure that we are going to generate a return on your time and on your investments. Our business, our brands and our unique ability to solve problems for our customers is truly unique in the industry. We have confidence in delivering mid-single-digit organic growth driven by 3 core engines: total line solutions, market penetration and aftermarket. All of this is reinforced by strong industry tailwinds that we discussed earlier. On profitability, we are equally confident of our ability to expand EBITDA margin through mix improvements, operational and scale, driving approximately 500 basis points of margin uplift by 2028. Beyond organic performance, we are very positioned -- very well positioned to compound growth through disciplined M&A. And that is a core competency of this organization. And finally, as Amy covered, we have a free cash -- clear free cash flow visibility and exceptionally strong balance sheet, giving us the flexibility to execute all of the above for the benefit of our shareholders. With that, thank you for taking the time to meet the Midera team. I would like to invite everyone to join us for a reception and refreshments in the gathering space through the door to your right.