Core Viewpoint - Madison Small Cap Fund underperformed its benchmark, the Russell 2000 Index, with a return of -0.4% compared to the benchmark's 2.2% in the fourth quarter of 2025, primarily due to negative sector allocation impacts, particularly in healthcare [1] Group 1: Fund Performance - The fund's Class I shares returned -0.4% in Q4 2025, lagging behind the Russell 2000 Index which returned 2.2% [1] - Sector allocation was a significant factor in the fund's underperformance, with healthcare identified as the weakest sector [1] Group 2: Primo Brands Corporation - Primo Brands Corporation (NYSE:PRMB) is highlighted as a key holding, with a market capitalization of $7.591 billion [2] - The stock closed at $20.76 per share on March 13, 2026, having delivered a 10.66% return in the past month but lost 35.69% over the past twelve months [2] - The company is recognized for its water delivery business, which is considered a quality business model, serving consumers and small businesses through a subscription or direct exchange [3] Group 3: Company Challenges and Management Response - Primo Brands faced significant challenges in 2025, including logistical issues and a tornado that damaged a critical bottling plant, leading to missed deliveries and subscription cancellations [3] - Despite these setbacks, new management has been proactive in addressing the issues, indicating that the mistakes were not fatal [3] - The stock price has significantly declined, erasing two years' worth of gains, reflecting the impact of operational challenges on market valuation [3]

Core Viewpoint - The rising costs of energy and potential increases in food prices due to high oil prices and fertilizer costs are significant concerns for consumer staples companies, which may face pressure on margins and sales volumes [1][2][3][4]. Consumer Impact - Immediate consumer impact in the U.S. is primarily from rising energy costs, such as home energy bills and gas prices, rather than food prices [3][4]. - If high costs persist, consumer staples companies may struggle to pass on price increases, leading to reduced sales volumes [5][6]. Vulnerable Companies - Packaged food stocks are identified as particularly vulnerable due to existing volume pressures and limited pricing flexibility [6]. - Companies like Spectrum, New Brands, Trager, Ken View, and Smucker may face margin pressure from logistics costs and exposure to the Middle East [10][11]. Resilient Companies - Primo Brands, which focuses on domestic production and has a turnaround strategy, is seen as more protected from supply chain issues [7]. - Church and Dwight is also viewed positively due to its strong value portfolio and potential for M&A activity [8]. Market Performance - The consumer staples sector has underperformed prior to recent events, with concerns over pricing and volume lagging [12]. - The recent sell-off in the sector is viewed as a correction from previously inflated stock prices, with fundamentals not improving significantly [13]. Investment Strategy - The current environment is characterized as a stock picker's market, where individual company performance will vary significantly within the consumer staples sector [14].

Core Insights - The performance in Q4 showed an improved recovery pace in the direct delivery business and continued market share gains in the retail sector [1] - The revenue decline projected for 2025 is attributed to integration-related disruptions in the customer direct channel and the strategic exit from the office coffee services business [1] Group 1: Recovery and Growth - The recovery in the 'Customer Direct' segment is driven by stabilizing the supply chain, improving warehouse management, and reducing customer churn to pre-merger levels [1] - The brands Saratoga and Mountain Valley are experiencing significant growth, with a 44% increase in 2025, serving as high-margin growth engines [1] Group 2: Strategic Focus and Management - The company is modernizing revenue management to optimize price-pack-channel architecture, specifically targeting immediate consumption and cold drink opportunities at retail [1] - The merger's industrial logic remains intact, with a focus on fostering a 'One Primo' culture to drive synergy capture beyond simple cost-cutting [1]

Company Overview - Primo Brands Corporation (NYSE:PRMB) is a leading North American branded beverage company formed in November 2024 through the merger of Primo Water Corporation and BlueTriton Brands, operating with dual headquarters in Tampa, Florida, and Stamford, Connecticut [4]. Financial Performance - In the third quarter of 2025, Primo Brands reported premium net sales growth of over 44% year over year, driven by strong performance from the Mountain Valley and Saratoga brands, indicating the company's ability to scale its premium portfolio and meet consumer demand for branded beverages [3]. Analyst Insights - BMO Capital analyst Andrew Strelzik lowered the price target for Primo Brands from $39 to $35 while maintaining an Outperform rating, reflecting adjustments in Q4 and 2026 expectations due to ongoing business stabilization investments and a slower-than-expected recovery in the customer direct segment [2]. - Despite the near-term adjustments, BMO remains positive about the company's trajectory in the customer direct business, noting that recovery is progressing more gradually than initially anticipated [2]. Governance Changes - In mid-January 2026, Primo Brands announced a board transition with the appointment of former CJ Foods CEO Minsok Pak as a director, which was not related to any operational or strategic disagreements, and is expected to enhance board oversight due to Pak's industry experience [3].

Summary of Primo Brands Fireside Chat - January 07, 2026 Company Overview - **Company**: Primo Brands (NYSE: PRMB) - **New Leadership**: Eric Foss (CEO), David Hass (CFO), Tracy Mangini (VP of Investor Relations) [2][3] Core Industry Insights - **Industry**: Beverage industry, specifically focusing on healthy hydration and bottled water - **Market Position**: Primo Brands is the third largest player in the liquid refreshment beverage (LRB) category by volume, with a strong portfolio in bottled water and healthy hydration [10][22] Key Points and Arguments 1. **Integration Challenges**: The integration of BlueTriton Brands and Legacy Primo is complex, requiring alignment on culture, successful integration processes, and synergy capture [8][9] 2. **Market Growth**: The bottled water category is the largest beverage category in the U.S. by volume and is experiencing significant growth, with municipal water bills rising by approximately 5% over the last five years [22] 3. **Brand Portfolio**: Primo has a diverse brand portfolio, including several billion-dollar brands and strong regional players, positioning it well to serve various consumer needs [24][25] 4. **Operational Improvements**: Significant progress has been made in supply chain management, with product produced to schedule improving from the low 80% range to over 99% [28][29] 5. **Customer Service Enhancements**: Initiatives like "Respond and Recover" have been implemented to improve customer service response times and reduce customer calls [31][32] 6. **Customer Acquisition Strategy**: The company is focused on improving service levels, recruiting new customers, and implementing a new warehouse management system to enhance supply chain execution [35][36] 7. **Retail Distribution Gains**: In 2025, Primo achieved approximately 10% growth in retail distribution points, with a focus on executional excellence and brand visibility [46] 8. **Premium Brand Growth**: Brands like Saratoga and Mountain Valley are experiencing over 40% growth, supported by strong marketing campaigns and increasing household penetration [48][50] 9. **Future Growth Strategy**: The growth algorithm for 2026 includes restoring customer service, driving retail execution, prioritizing premium brands, and implementing strategic pricing initiatives [52][53] Additional Important Insights - **Financial Model**: The company has a strong financial model focused on growth, margin expansion, and cash flow generation [11][57] - **M&A Strategy**: Future M&A opportunities will be considered after stabilizing the customer direct business, with a focus on adding scale and improving competitive positioning [62][63] - **Key Performance Indicators (KPIs)**: Metrics to focus on include market share, customer satisfaction, revenue, volume, margin expansion, and operational efficiency [55][56] Conclusion - **Outlook**: The long-term investment thesis for Primo Brands remains intact, with a commitment to restoring service levels and driving growth in the healthy hydration category [65]

Group 1: Primo Brands Corporation Overview - Primo Brands Corporation (NYSE:PRMB) is recognized as a consumer defensive stock with a 'Buy' rating from 80% of analysts covering the stock, indicating strong market confidence [1] - The target price for PRMB ranges from $18 to $42, with a median price target of $27 suggesting an upside potential of approximately 68% [1] - Analyst Nik Modi from RBC Capital reaffirmed a 'Buy' rating with a price target of $30, indicating an upside potential of about 82% from the current price level [2] Group 2: Company Strategy and Financial Health - The company is focused on reducing its debt to a medium-term net leverage target of 2.0 to 2.5 times, down from 3.37 times at the end of the third quarter, reflecting a commitment to financial stability [4] - Management anticipates improved operating conditions entering 2026, driven by a favorable tariff environment [4] Group 3: Market Position and Brand Portfolio - Primo Brands Corporation is a Connecticut-based branded beverage company operating under various names, including Primo Water, Mountain Valley, and Deer Park [5]

Core Viewpoint - Saxena White P.A. has initiated a securities class action lawsuit against Primo Brands Corporation and its executives, alleging misleading statements and omissions related to the company's secondary public offering and merger integration issues [1][2][5]. Group 1: Class Action Details - The class action claims violations of the Securities Exchange Act and the Securities Act, representing individuals who purchased Primo Brands stock during specified periods and suffered damages [1][2]. - The lawsuit expands upon a related action filed in Connecticut, alleging previously unpled claims regarding materially false and misleading statements in the secondary public offering materials [2]. Group 2: Company Background - Primo Brands is a beverage distribution company with a portfolio that includes brands like Poland Spring and Pure Life, formed through a merger with BlueTriton [4]. - The merger was announced on June 17, 2024, and was positioned as a strategic move to create a leading healthy hydration company in North America [4]. Group 3: Allegations of Misleading Information - The class action alleges that Primo Brands misled investors about the merger's integration progress, failing to disclose operational disruptions and execution challenges that negatively impacted business performance [5][6]. - Specific claims include that the direct delivery business faced serious operational issues, which hindered the company's ability to serve customers effectively [5]. Group 4: Financial Performance and Stock Impact - On August 7, 2025, Primo Brands reported disappointing financial results, with revenue of $1.730 billion and adjusted diluted EPS of $0.36, leading to a stock price drop of approximately 9% [6]. - The stock further declined by over 21% on November 6, 2025, after the company announced additional guidance reductions and a change in CEO, reflecting ongoing operational challenges [7]. - Since the secondary public offering, the stock value has decreased by approximately 44%, from $29.50 to $16.54 per share [7].

Core Insights - Primo Brands Corporation (NYSE:PRMB) is identified as a stock with significant upside potential, favored by billionaire Daniel Sundheim [1] - Recent price target revisions by analysts reflect mixed sentiment, with Mizuho lowering its target from $40 to $35 while maintaining an Outperform rating [1][2] - Jefferies initiated coverage with a Hold rating and a $23 price target, highlighting concerns about integration complexity affecting near-term visibility [2] - BofA Securities reduced its price target from $32 to $26 but reaffirmed a Buy rating, indicating confidence in Primo's core business despite lowered Q3 revenue and earnings projections [3] Company Overview - Primo Brands Corporation is a North American beverage company specializing in healthy hydration, distributing a wide range of bottled water brands through retail and home delivery channels [4] - The company owns notable brands such as Poland Spring, Pure Life, Mountain Valley, and Saratoga, offering products that include spring, sparkling, and purified water [4]

Company Overview - Primo Brands is a branded beverage company and holds the position of the third largest in nonalcoholic beverage volume share in the U.S. [3] - The company boasts a portfolio of 7 brands that are over 100 years old, including notable names like Poland Spring, Saratoga, and Mountain Valley, with origins dating back to the 1820s and 1870s [3] Business Model - Approximately 45% of Primo Brands' business is in direct delivery, primarily focusing on a 5-gallon format [3] - The company offers products in both PET and glass formats, with Mountain Valley being marketed as a premium brand available in glass [3]