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]

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]