Welcome to JBT Merrill's Earnings Conference call for the first quarter 2026. My name is Ben and I will be your conference operator today. As a reminder, today's call is being recorded. At this time, all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, press star 1. If you would like to withdraw your question, press star 1 again. I will now turn the call over to J.B.T. Morrow's Senior Director of Investor Relations, Marlee Spangler, to begin today's conference.

Thank you, Ben. Good morning, everyone, and thank you for joining our first quarter 2026 conference call. With me on the call is our Chief Executive Officer, Brian Deck, President Arne Sigurdsson, and Chief Financial Officer, Matt Meister. In today's call, we will use forward-looking statements that are subject to the safe harbor language in yesterday's press release and 8K filing. JVTMRL's periodic SEC filings also contain information regarding risk factors that may have an impact on our results. These documents are available on our IR website. Also, our discussion today includes references to certain non-GAAP measures. A reconciliation of these measures to the most comparable GAAP measures can be found on our IR website. With that, I'll turn the call over to Brian.

Thanks, Marley, and good morning, all. We got off to a solid start in 2026. We demonstrated our commercial momentum with a second consecutive quarter of orders exceeding $1 billion, including continued robust global demand from our poultry customers. We captured meaningful year-over-year margin expansion, enabled by further synergy savings and strong execution. Additionally, cash flow was extremely strong, allowing us to make further and significant progress in reducing our financial leverage. As a result, we remain confident in delivering our original earnings guidance for the year. Before we talk more about the first quarter, I'd like to thank everyone who was able to participate in our Investor Day in late March. It was an important milestone for JBT Morrell as we unveiled our next-gen strategy and detailed our 2028 financial targets. And, as we discussed, we are very pleased with our progress integrating JBT and Morrell, which underscores the commercial, operational, and financial benefits of the combination and provides confidence in the journey ahead. I'll now turn the call over to Arnie to provide details about our next-gen strategy, then Matt will follow up with a financial recap of our first quarter performance.

Thank you, Brian. At our Investor Day in March, we detailed our plans for profitable growth and continued margin expansion through 2028. Our food and beverage customers are shifting to an outcome-based model that increases the demand for integrated solutions across the value chain and requires full lifecycle support, high uptime, and data and processing insights to run at the highest performance level. JBG Model is uniquely positioned to deliver these comprehensive solutions, and our NextGen Strategy will strengthen our competitive position even further. The key pillars of the NextGen Strategy are first, advancing our customer-centric service model by building on our large global install base to deliver a better customer experience through prescriptive maintenance, improved parts delivery performance, and more regional accountability. Second, it is enhancing our product offering, full-line solutions, and digital capabilities with targeted innovation through our food application expertise. Third, it is capturing commercial opportunities through cross-selling and growth in emerging markets and delivering end-to-end solutions that optimize customer performance. Then, of course, our culture of continuous improvement will further enhance the efficiency of JBT model, allowing us to invest in the business and be more competitive. And finally, at the right time, we plan to pursue strategic and disciplined M&A to build an even more comprehensive offering and strengthen our value proposition of integrated line solutions. Putting this all together, we expect our revenue to grow at a three-year organic compound annual rate of 5 to 7 percent, and we are targeting an adjusted EBITDA margin of 20 percent in 2028, supported by our margin enhancement initiatives and volume growth. We're confident that our strategy positions us to deliver profitable growth and value creation for both customers and shareholders, and we look forward to updating you on our progress. Now, let me turn the call over to Matt to discuss our performance in the quarter.

Thanks, Arnie. As Brian mentioned, we're off to a good start in 2026. Our first quarter consolidated revenue was $936 million, an increase of approximately 10% year-over-year. Organic revenue growth was 4%, with foreign exchange contributing additional 6%. Consolidated adjusted EBITDA of $142 million improved 27%, and adjusted EBITDA margin of 15.2% improved by 210 basis points. From a segment perspective, Protein Solutions revenue of $460 million grew 22% year-over-year, which included an approximate 8% benefit from foreign exchange. Organic growth is primarily due to higher poultry volume as we executed on strong backlog built in 2025. Protein solution segment adjusted EBITDA margin improved by more than 500 basis points year over year to 21.7 percent. This significant improvement was driven by large by volume leverage in poultry and the results from synergies and continuous improvement initiatives in our meat and fish businesses paired food and beverage solution segment revenue of 476 million dollars was flat year over year which included an approximate four percent benefit from foreign exchange as we've discussed on previous calls we experienced softness in the cpg and market during 2025 which contributed to the lower volume adjusted EBITDA margin for the segment declined 170 basis points year over year to 14.7 percent which included the expected impact of higher tariff costs the volume decline and under performance in our warehouse automation business for the quarter we generated free cash flow of 100 million dollars driven by our earnings performance and an increase in customer advanced payments from our strong order intake this resulted in free cash flow conversion to adjusted EBITDA of 70 percent. We continue to make great progress deleveraging our balance sheet, with our leverage ratio at 2.6 times at the end of the first quarter, and we remain on track to reduce leverage to approximately two times by year end. Given our first quarter performance and strong orders, we are maintaining our full year 2026 guidance. At the midpoint, that reflects revenue growth of 6%, adjusted EBITDA margin expansion of 145 basis points, and an adjusted earnings per share improvement of 29%. The second quarter, we anticipate revenue of $975 million to $1 billion and adjusted EBITDA margins of 17% to 17.5%. Now, regarding the impact of tariff changes on our guidance, we are forecasting that the benefit from the elimination of IEPA tariffs will be essentially offset by incremental Sections 122 and 232 tariff increases. Additionally, we have not factored in any IEPA tariff payment refunds. Therefore, our full-year guidance remains unchanged and continues to reflect a 25 to 50 basis point headwind from tariffs after all mitigation actions. With that, let me turn the call back to Brian.

Thanks, Matt. Speaking of the outlook for JBT Morrell, let me comment on our commercial momentum. As I mentioned at the top of the call, orders exceeded $1 billion in the first quarter, a year-over-year increase of 17%. That gain reflects continued robust demand from our poultry customers globally, driven by unabated demand from end customers. And beyond poultry, the benefits of our diversified model are also playing out with broad-based order strength, as we experience double-digit year-over-year growth from both our protein solutions and prepared food and beverage segments. Specifically, we saw a pickup in investment in prepared foods, as well as the meat and fruit and vegetable end markets. geographically investment was strong in most regions with a sequential increase in demand from europe north america and latin america additionally we continue to capture synergistic orders as our go-to-market strategy promotes cross-selling of legacy jbt and morale solutions as it relates to the conflict in the middle east we are not experiencing any noteworthy impact on our order book and pipeline. As a reminder, the Middle East region has historically accounted for less than 5% of total JBT Moreau revenue, but even today we continue to progress on opportunities in the region. Moreover, we have not seen an impact to broader customer investment trends in Europe as the demand to meet the needs for protein output, automation, and efficient operation continues. However, the conflict is resulting in a more challenging logistics, fertilizer, and energy inflationary environment, which heightens our attention to any implication for these cost dynamics for both JBT Morrell and our customers. So far, it seems our customers remain confident in their ability to pass these costs along or otherwise manage through them. With all this said, our teams are executing well despite the dynamic macro environment. which speaks well to our prospects for the remainder of 2026 and beyond. Thank you to our talented people across the globe for making it possible.

Now, let's open the call to questions.

Operator?

We will now begin the question and answer session. Your line will remain open for follow-ups. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your headset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Ross Sparrenbleck with William Blair. Ross, your line is open. Please go ahead.

Hi, this is Sam Karlovant for Ross. Thanks for taking my questions. Really great to see the strong orders in the quarter. I mean, you kind of touched on this, but we've been hearing some concerns that input cost inflation may have been impacting your customers' willingness to order. Can you really walk through how this current inflationary trend compares to 2022?

Sure. Happy to do so. So two things I would say. First, specific to our poultry customers, they are in a much stronger position today versus a few years ago. with excellent customer demand, balanced supply, good price cost spreads, and strong balance sheets. More specifically, corn and soybean are in abundant supply and remain in that low-cost position here in 2026 versus high prices in 2022, which, if you recall, were exasperated by the Russia-Ukraine conflict. and wholesale prices for poultry today are while office highs are still at a level where producers are making really nice money and and in part you you saw the tyson report yesterday a nice quarter and again balance sheets remain strong and there's a still a continued bias towards investment in all the things that we've we've talked about i'd also say uh from jb specific to jbt morale standpoint as a combined company, we really now have the benefit of a more diversified product portfolio within Poultry because now we have primary, secondary, all the way to end of line and including a much deeper further processing portfolio. And we're seeing a lot of investment on further processing coming along. But also, remember, we've got much broader end market exposure outside of proteins, a better mix of recurring revenue, a broader geographic and a broader geographic exposure. Additionally, if you recall, back in 2022, 2023, morel, meat and fish, they weren't really contributing much to the situation from an earnings perspective. And now, while we've got a lot of room to go on those businesses, they're both contributing nicely. So we're simply more diversified financially as well. uh really what i'm saying is the combined benefits of the scale and diversification of both the product and the market side we've severely de-risked the company compared to where we were in the past and that was a big part of the industrial logic of the two businesses coming together so so while i'm not saying that we're immune to cyclical forces i'm just saying we're a better business today and more diversified uh than we were uh back then got it that's super helpful.

And kind of sticking on the same theme, has your ability to internally pass through your own inflationary costs meaningfully changed since 2022 following the Morrell acquisition?

I would say generally we're more competitive than we've ever been by virtue of just our continuous improvement efforts. And we have strong market positions. So yes, I think we do have a good ability to pass things along. We're obviously very conscious of where we sit in the marketplace from a competitive pricing situation. So that always comes into play, but certainly we feel we're in a good spot generally.

And maybe just to add a little bit, because like, if you look at kind of maybe more specifically to the end markets that model was focused on back in 2022 there was basically a perfect storm there was like a headwind in most of our markets if you look at the pork business obviously the war with the sanction on russia and kind of the ukraine market closing down that was a north of 10 of the meat business at the time but what was also happening which was an extra headwind uh was that um china really cut down on their imports of pork because they were built, kind of China was building up the herd after the African swine fever. So there was an oversupply of pork in Europe and North America, kind of independent of what was going on from a cost standpoint. The beef cycle was turning at that point, kind of to a more negative environment. And then on the fish side, you were seeing quotas being cut for the first time for a few years on the whitefish side. And Norway introduced a 40% tax on salmon farming, which is close to 50% of the salmon farming in the world. So there was also just like a very specific dynamics if you were looking kind of more specifically at the model business back in the day. But like Brian said, we're a different company and much stronger from a scale, from a diversification standpoint uh not only from an end market standpoint but also across kind of the value chains in in those end markets got it that is great color i will leave it there and pass it on thank you your next question comes from the line of justin ages with cjs securities justin your line is open please go ahead hi morning all i was hoping we could get a little more color on some of the headwinds and prepared food and beverage solutions.

You know, what's causing these persistent headwinds in warehouse automation?

Well, I think in warehouse automation specifically, that business had a bigger impact from the tariff changes on its customers than the rest of our business did. So they've been really impacted by demand because of the impacts on its market. And they've also had a few discrete projects that they've been working through over the last two quarters. We think that's largely behind us now. And the business is taking some actions to try to address the lower volume and improve margins going forward. And we should expect those actions to start to impact late here in Q2 and then going on to Q3 and Q4.

Thanks for that, Matt. And then switching to poultry, you know, good to see strong, robust demand. Is it possible to get a little more color on where that is geographically? Is it broad-based in all your regions? Is it specifically in one region, leaving an opportunity to grow more in another region? Just looking for any color there.

So the demand is fairly broad-based. Europe is strong. North America is, I would say, even a little earlier in the cycle than the European cycle, and we expect continued demand there, especially with some of the opportunities with line speeds and whatnot. So I would say they're actually earlier in the cycle than Europe. And South America is very strong for us right now. We may have a record year this year down there. I would say Asia is a little earlier or a little not as quite strong, but good opportunities, especially in the Australia, New Zealand area.

Very helpful. Thanks for taking the question.

Sure.

If you would like to ask a question, please press star one. Your next question comes from the line of Meg Dobra with R.W. Baird. Meg, your line is open. Please go ahead.

Yeah, thanks, sir. And good morning, everyone. Brian, just maybe tacking on to those last comments that you had on poultry, I'm sort of curious as to what your visibility is here at this point, right? I mean, we, you know, just in speaking with investors, I think this is kind of like the primary concern that we've had a pretty decent poultry cycle here going for more than a year. And the question is kind of on sustainability. Maybe you can talk a little bit about that and what you're hearing from customers. I mean, what is driving this investment? And can you put a finer point on what's happening with the line speed in terms of how that manifests itself in incremental business for you guys in terms of orders either for 2026 or maybe even beyond 2026?

Sure. From a demand profile, there's a couple things happening, and this is global. There is a true insatiable demand for poultry right now just in terms of all the benefits that go along with the protein aspect to it, the flexibility in flavor profiles, religious, I'll say no restrictions there. as well as the continued progression of people going from grain-based diets to meat-based diets. So those secular tailwinds continue to benefit, and I think that will go on for a long time. And now that I'll say that the industry got the supply-demand balance fixed after their struggles 2023 through early 2024, we're just in a I'll say more normal cycle in that regard and I would further say that the most recent I'll say demand real strength has been on that primary and secondary side which is really supporting automation but also just the pure volume needs for for the industry As we go further into the cycle, what we're now seeing is the need and desire for some of the downstream further processing. You heard that a little bit from Tyson yesterday, where we do expect some real strength there here later in the cycle as they look to do value added to their portfolio. because they make more money in that regard. So I do think we're going to see some strength in that side over the next several quarters. Sorry, what was the second part of the question?

Line splits.

Oh, line speeds and line splits. Yes, so we're still waiting for the USDA to make final determination, which we expect here in the next few months. Since the open comment period has now since closed, we met with the USDA giving our opinion on the matter and put forth our comments, and our position on this is that our technology and the line speeds, they're built for the higher line speeds, which we currently use in Europe and elsewhere, and really the line speeds in North America are a constraint on productivity and it actually increases food costs. But what would manifest if we see some success on the line speed rules is we immediately go from 140 birds per minute to 175, and that would precipitate investment all around. You don't just turn a switch and make it go faster. The entire system has to be harmonized in order to get the productivity that you need in order to execute on that. So the shackle lines themselves, but everything around that, the deboning, everything associated with that. We think that's an opportunity. And even without, I would say, the waivers, we are still seeing demand for line splits, which effectively allows the increased speeds under the current rules of 140 birds per minute, where you split the line where the USDA inspection occurs to slow it down for a period, and then you join those lines back up. So we actually had a deployment in Q1 in that regard. So that was nice to see one of our customers deploying that. So we do think independent of what the USDA decides, we think there's some opportunity to invest, which allow our customers to get that productivity regardless. Okay.

Is it fair to think about this light and speed issue as just kind of fundamentally altering the poultry investment cycle in North America? Or, you know, is this something that perhaps doesn't really have that much of an impact for the overall business I'm talking about here?

This is one of the reasons why I mentioned we're earlier in the cycle in North America compared to Europe, because Europe has been at these higher speeds. I think this is a multi-year investment opportunity because of the 300 or so processing lines out there, only handfuls are running at higher speeds. So we do think this is a longer cyclical tailwind specific to North America.

It is kind of, how you think about it, is kind of a transformation because all the infrastructure around kind of the farming side, ensuring supply, and the current facilities are not necessarily set up in the right way to deal with the technology that you need and the speed and so on. So it will be a kind of a gradual kind of shift in the market, we believe. So it is not like, like Brian said, it's not like you buy one piece of equipment and you swap it out. It's really, you need to think about it much more broadly. So it has, it will take time to progress over the whole industry.

That's very helpful. And maybe one final follow-up on prepared food and beverage segment. It sounds like demand is getting a little bit better. You know, you talked about some challenges in 25, but demand gets a little bit better. How should we think about organic growth here in terms of what's embedded in guidance? Maybe you can comment on Q2 specifically and then the rest of the year as well. And, you know, how do we also see margin progress? we started clearly slower in Q1, you know, do we revert to some year-over-year margin expansion at any point in time in fiscal 26? Thank you.

Sure. I'll speak, and then Matt talks specifically about some of the trends here. But we are seeing some, I'll say, recovery in some of those end markets that were a little bit more challenged in 2025. So some of the CPG, QSR, we're starting to see an improved pipeline, and that manifested in stronger orders in Q1, which is nice to see.

Yeah, just to add on that, I think we saw close to double-digit order improvement in prepared food and beverage in Q1, so that's the positive momentum that we're seeing in the segment overall. From an organic growth rate, it will be sort of in that, I call it sort of mid-single digits, It's probably a little less than the average that we're looking at for the total business at 6% if that's our midpoint. It'll be higher in protein, a little bit lower on the prepared food and beverage side, probably closer to 3% to 4%. Especially given the slow start, right?

Correct, in prepared food and beverage.

So I would see it, but it's going to progressively improve because we have built some backlog here in Q1 and we're starting to see some positive momentum in their primary markets.

And the margins?

Yeah, from a margin perspective, again, Q1 was certainly a bit lower than we expected. Certainly, we had some expectation with AGV business and warehouse automation being down, but that volume decline did have an impact on margins. But with the improved volume significantly in Q2 and Q3 and Q4, we should see sequential improvement going forward from Q1 all the way through the year. so i would expect continue to see significant progress in q2 and then sequential progress from there three and four to be clear do you expect to be up margin wise here i understand the sequential comment at what point in time do we get margins up year over year yeah margins will be up year over year in prepared food and beverage that is our that is our forecast for the for that segment yes right appreciate it thank you there are no further questions at this time i will now

hand the call over to mr brian deck for closing remarks thank you all for joining us this morning as always our i our team will be available if you have any additional questions this concludes today's call you may now