MFP

Corporate Context & Strategic Positioning

• This is Madeira's first earnings call as an independent public company, after completing separation from Middleby Corporation on July 6, 2026, and beginning trading on NASDAQ under ticker MFP.
• Madeira is a pure-play leader in high-complexity, high-value further processed food processing technology, with over 30 leading brands across core categories, operating 29 manufacturing facilities and selling across 6 continents.
• Management emphasizes that independence unlocks greater shareholder value via unshared strategic and capital focus: all capital allocation, engineering resources and acquisition decisions are now focused exclusively on growing Madeira's food processing technology platform, rather than competing with other business priorities at a larger parent company.
• The company operates in a fragmented $70 billion total addressable market, with a stated strategy of driving growth via organic share gains and disciplined inorganic consolidation.

Four Core Growth Pillars

• Total Line Solutions: Shift from selling single machines to designing, integrating and supporting complete end-to-end production lines, shifting customer conversations from price to performance and ROI. The service level agreement attachment rate for new total line solutions exceeds 90%. Total line solution orders are outgrowing the rest of the business, with offerings now available across 20+ product lines. Q2 saw the first major full execution of this strategy with the Frigo Mechanica charcuterie line collaboration across four Madeira brands.
• Market Penetration: Driven by customer-centric innovation and geographic expansion. Over the past three years, new products have generated $340 million in revenue, equal to more than 20% of total equipment sales. The current pipeline holds 70+ innovations in development, 12 of which management classifies as game-changing. Four regional innovation centers allow customers to test full solutions before committing capital; the newest center in Italy (opened October 2025) has already generated over $33 million in orders through Q2 2026. International sales grew 31% year-over-year in Q2, with particular strength in Europe.
• Aftermarket Growth: The 40% revenue recurring aftermarket segment is a long-term growth driver, supported by a large installed base. Management is investing to expand the global team of over 300 service technicians across 20 offices, prioritizing fast, reliable emergency support to build customer loyalty and drive future new equipment orders.
• Acquisitions: The company has acquired over 30 companies since 2005, deploying roughly $850 million in capital. It currently tracks a pipeline of 100+ targets, with 35+ active opportunities, targeting 3-5 completed deals per year on average. All deals are underwritten to target double-digit ROIC by year three, and the company maintains a long-term target net leverage ratio below 3.0x trailing adjusted EBITDA. Post-spin, net leverage at separation was 1.3x, leaving significant capacity for acquisition activity.

Operational & Margin Expansion Initiatives

• The Madeira operating system (a lean manufacturing framework integrating quality systems, automation, AI, and supply chain optimization) underpins long-term margin expansion. Early wins include automation of common production processes, such as pairing skilled welders with welding robots to dramatically increase output.
• The largest near-term margin opportunity comes from material cost and supply chain management: consolidated purchasing power, reduced logistics costs, low-cost country sourcing, and intentional make-or-buy strategies. Management states the company is still in the early stages of this efficiency journey, with meaningful margin expansion still ahead.

Q2 2026 Core Financial Performance

• Q2 net sales grew 13% year-over-year to $245.4 million, with 1% organic growth and 11% inorganic growth from acquisitions. Year-to-date (H1 2026) net sales grew 22% to $470 million, with 12% organic year-over-year growth.
• Q2 estimated standalone adjusted EBITDA was $41.8 million (above the guided range of $37 million to $41 million), growing 11% year-over-year, with a margin of 17% (down 40 bps year-over-year due to snack shipment delays and inflation). H1 2026 estimated standalone adjusted EBITDA grew 26% to $75 million, with a 16% margin (up 40 bps year-over-year).
• Q2 orders grew 16% year-over-year to $275 million, with 11% organic order growth. End-of-quarter backlog hit a record $446 million, up 51% year-over-year, providing visibility to over 80% of projected H2 2026 equipment sales. Book-to-bill was 1.12x, up from 1.02x in Q1 2026.
• End-of-quarter balance sheet: $51 million cash, $259 million total debt, $208 million net debt, 1.3x net leverage, and $823 million total liquidity. The board approved a $50 million three-year share repurchase program to offset dilution from equity grants.

• Management upgraded full-year 2026 guidance, increasing the midpoint of both net sales and estimated standalone adjusted EBITDA by $20 million and $3 million respectively, versus prior guidance.
• Full-year 2026 guidance: net sales of $935 million to $965 million, and estimated standalone adjusted EBITDA of $160 million to $176 million. All EBITDA guidance is net of $32 million in estimated annual standalone public company costs.
• At the guidance midpoint, estimated standalone adjusted EBITDA margin is projected to expand ~130 basis points versus 2025, driven by healthier backlog mix, strong aftermarket growth, and operating efficiency improvements.
• Management expects the typical seasonal trend: a soft Q3 due to reduced operating hours in European facilities over summer, followed by a stronger Q4 (the typical peak for both sales and EBITDA as customers rush to complete capital projects before year-end). H2 2026 sales are projected to split 46% in Q3 and 54% in Q4.
• Sequential margin expansion is projected for the second half: 50 basis points of sequential improvement from Q2 to Q3, with further expansion in Q4 driven by healthier backlog mix, improved pricing, fixed cost absorption from higher sales, and early benefits from the Madeira operating system.
• Guidance is intentionally disciplined as a newly public standalone company: management raised the floor of guidance after strong Q2 results but kept the upper end of H2 guidance conservative, preferring to outperform versus aggressive projections.

Madeira Food Processing reports three core product segments plus a separate aftermarket segment:

1. Protein: Segment saw broad-based strength, with premium growth in charcuterie and bacon, and steady value-driven demand in poultry and dairy. Poultry has grown from ~6% of net sales a few years ago to over 10% of net sales today, making it the fastest growing protein category. The large Q2 2026 charcuterie total line solution win with newly acquired Frigo Mechanica drove 11% inorganic net sales growth for the quarter.
2. Bakery: Artisan and long fermentation formats (e.g. sourdough) are the fastest growing solutions, alongside demand for smaller, better-for-you portions. The segment saw particularly strong demand growth in Europe in Q2.
3. Snack: Mexican-inspired and protein-forward formats outpace broader category growth, making the tortilla and chip platform a strategic priority. Q2 2026 results were negatively impacted by delayed equipment shipments due to late deliveries from a third-party vendor, which weighed on quarterly performance.
4. Aftermarket Parts & Service: This segment generated 38% of Q2 2026 net sales (40% on a trailing 12-month basis), grew organically in Q2, and delivered strong margin contribution. It currently serves an installed base of over 100,000 units and systems globally.

• Large individual equipment shipments can be delayed or pulled forward for reasons including third-party vendor delays, customer schedule changes, and timing of revenue recognition, which can create quarterly volatility that makes single-period performance misleading.
• Cost inflation (including transportation costs) and ongoing tariff impacts have created margin headwinds in the first half of 2026. While management expects most prior-year tariff pressure to be behind the company in H2, the timing of potential tariff refunds is unpredictable, and some refunds will need to be passed through to customers.
• Acquisition timing is inherently unpredictable, even with a strong pipeline of active targets, which can create variability in annual inorganic contribution.
• Customers are being more selective with capital spending in the current macro environment, only moving forward with projects that deliver clear, near-term ROI, which creates mix pressures for suppliers that do not focus on high-value solutions.

Q: What is the current scale and growth trajectory of total line solution sales, and what segments are the main focus for future acquisitions? / A: Management did not provide exact quarterly figures for total line solution sales, but confirmed it is the company's fastest growing business segment, with double-digit growth across all three core categories (protein, bakery, snack). For acquisitions, the company has active opportunities across all three core segments, and will stick to its target of completing 3 to 5 acquisitions per 12-month period, with timing dependent on when deals come to fruition.

Q: What is the impact of recent tariff changes on the business going forward, and why is the H2 2026 organic growth guidance conservative despite a strong backlog? / A: Management notes that recent tariff changes (sunsetting of prior 22 tariffs and implementation of new 301 tariffs) are expected to have a largely flat net impact on the business, and most prior tariff headwinds have already been passed through to customers. While the company may receive future tariff refunds, timing is unpredictable and some refunds will need to be passed to customers. The conservative guidance reflects discipline as a newly public company: management banked the strong Q2 outperformance from the pulled-forward Frigo Mechanica revenue recognition and raised the guidance floor, but kept H2 projections conservative to allow results to play out.

Q: Why are price increases only highlighted for the aftermarket segment, not for equipment sales, and what is driving strong Q2 order growth? / A: Equipment sales are project-based with custom bid pricing, so inflation expectations are built directly into each custom bid at the time of ordering, rather than requiring separate list price increases. Aftermarket is a list-price business, so explicit mid-year price increases are required to offset inflation, which is why it is called out separately. The main drivers of strong order growth are growing adoption of total line solutions (customers increasingly prefer Madeira to integrate full lines rather than doing it themselves) and very strong order growth in the Europe, Middle East, and Africa region.

Q: Beyond total line solution adoption, what steps is Madeira taking to drive aftermarket growth? / A: Madeira's decentralized entrepreneurial model allows the company to provide faster, more localized responsive service than many competitors, which is critical for customers that need emergency support when production lines go down (including after-hours calls). This model builds customer loyalty in a market where many customers lack in-house technical expertise to maintain equipment. As new acquisitions are integrated, Madeira expands their aftermarket service offerings to capture more recurring revenue from their installed bases, turning acquired customer bases into long-term annuity streams.