Financial Data and Key Metrics Changes - In Q2, the company reported revenues of over $580 million with a strong EBITDA margin of 27% [12] - Adjusted EBITDA for Q2 was $200 million, and adjusted EPS was $2.35 [14] - Free cash flow for Q2 was $101 million, with a leverage ratio of 2.3 times [17] Business Line Data and Key Metrics Changes - Commercial Foodservice revenues were below prior year levels but showed sequential growth, driven by demand for leading technologies [12] - Residential segment revenues grew sequentially to over $181 million, with an EBITDA margin exceeding 10% [13] - Food Processing revenues exceeded $216 million in Q2, with an EBITDA margin over 21% [13] Market Data and Key Metrics Changes - The company experienced growth in the indoor appliance markets in the US and UK, while facing challenges in the outdoor segment due to tariff pressures [13][9] - The snack category within Food Processing is growing rapidly, indicating a large market opportunity ahead [10] Company Strategy and Development Direction - The company has made strategic investments over the past three years to enhance innovation, go-to-market capabilities, and operational excellence [3] - Focus on expanding into new market adjacencies, particularly in ice and beverage categories, which are seen as transformational growth opportunities [5][6] - The company plans to continue share repurchases while maintaining financial flexibility for strategic growth investments [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory despite current economic challenges, emphasizing a strong foundation for long-term growth [3] - The outlook for Q3 anticipates a slight step back in revenues compared to Q2, with expectations for Q4 to be the strongest of the year [20] - Management noted that the commercial foodservice segment is under pressure but remains optimistic about future recovery [92] Other Important Information - The company expects to complete a food processing spinoff in 2026, which is anticipated to operate efficiently and independently [23] - The company has a robust pipeline for M&A activities, particularly in the food processing segment [61] Q&A Session Summary Question: Can you provide more details on the EBITDA guidance by segment? - Management indicated that margins will likely decrease slightly in Q3 due to revenue stepping down, but will improve in Q4 as revenues increase [31] Question: What is the current run rate for grill revenues and how are tariffs impacting this segment? - Grill revenues are in the $100 to $150 million range, but tariffs have caused channel partners to reduce inventory levels significantly [33][36] Question: What is the outlook for large QSR customers in the second half? - Management noted that traffic through QSRs has been down, leading to delays in new store openings and impacting replacement orders [44] Question: How is the tariff impact distributed across segments? - Approximately 60-65% of the tariff impact is felt in the commercial segment, with residential at 20-25% and food processing at 10-15% [55] Question: What are the expectations for sustainable growth in the commercial foodservice segment? - Management believes that the chains will eventually recover, and the company is well-positioned to benefit from this recovery [95] Question: How are new products introduced at NAFEM performing? - New products are gaining traction in the market, with expectations for significant revenue growth in 2026 and beyond [102]