JBT MAREL Corp: Form 10-Q for the period ended Mar 31, 2026

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, our Annual Report on Form 10-K and other materials filed or to be filed by us with the Securities and Exchange Commission, as well as information in oral statements or other written statements made or to be made by us, contain statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are forward-looking statements. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “foresees” or the negative version of those words or other comparable words and phrases. Any forward-looking statements contained in this Form 10-Q are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. These forward-looking statements include, among others, statements relating to our business and our results of operations, our strategic plans, our restructuring plans and expected cost savings from those plans and our liquidity. The factors that could cause our actual results to differ materially from expectations include, but are not limited to, the following factors:

• fluctuations in our financial results;
• termination or loss of major customer contracts and risks associated with fixed-price contracts, particularly during periods of high inflation;
• catastrophic loss at any of our facilities and business continuity of our information systems;
• loss of key management and other personnel;
• our ability to remediate the material weaknesses relating to the Marel financial statements;
• deterioration of economic conditions, including impacts from supply chain delays and reduced material or component availability;
• unanticipated delays or acceleration in our sales cycles;
• inflationary pressures, including increases in energy, raw material, freight, and labor costs;
• changes in food consumption patterns;
• weather conditions and natural disasters;
• impacts of pandemic illnesses, food borne illnesses and diseases to various agricultural products;
• work stoppages;
• customer sourcing initiatives;
• competition and innovation in our industries;
• disruptions in the political, regulatory, economic and social conditions of the countries in which we conduct business;
• changes to tariffs, trade regulations, quotas, or duties;
• potential liability arising out of the installation or use of our systems;
• the impact of climate change and environmental protection initiatives;
• our ability to comply with U.S. and international laws governing our operations and industries;
• increases in tax liabilities;
• risks related to acquisitions, such as our ability to integrate the acquisitions we have consummated, including the integration of the legacy businesses of JBT and Marel;
• our ability to develop and introduce new or enhanced products and services and keep pace with technological developments;
• difficulty in developing, preserving and protecting our intellectual property or defending claims of infringement;
• cybersecurity risks such as network intrusion or ransomware schemes;
• our convertible note hedge and warrant transactions;
• the maintenance of two stock exchange listings;
• fluctuations in currency exchange rates and interest rates;
• our level of indebtedness;
• availability of and access to financial and other resources; and
• the factors described under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K and in this and any future Quarterly Report on Form 10-Q.

If one or more of those or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Consequently, actual events and results may vary significantly from those included in or contemplated or implied by our forward-looking statements. The forward-looking statements included in this Form 10-Q are made only as of the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statement made by us or on our behalf, whether as a result of new information, future developments, subsequent events or changes in circumstances or otherwise.

In this section, the Company utilizes non-GAAP measures to provide a more meaningful comparison of its ongoing operating results, consistent with how management evaluates performance. For further information regarding the Company's non-GAAP measures including reconciliations to the most directly comparable GAAP measures, see below "Reconciliation of Non-GAAP Measures."

The Company calculates amounts and percentages using rounded figures as presented in this section. In prior periods, amounts and percentages were calculated using unrounded values. As a result, certain amounts and percentages may differ slightly from previously presented information.

Executive Overview

JBT Marel Corporation is a leading global food and beverage technology solutions provider to high-value segments of the food and beverage industry. Fueled by our purpose, to transform the future of food, we help our customers maximize production output and performance through our diverse food application knowledge and integrated solutions offerings.

We specialize in designing, manufacturing, and servicing cutting-edge technology, systems, and software for a broad range of food and beverage end markets. We aim to create better outcomes for our diverse customers by optimizing food yield and efficiency, improving food safety and quality, and enhancing uptime and proactive maintenance, all while reducing waste and resource use across the global food supply chain.

In early 2026, we introduced our NextGen strategy that focuses on delivering comprehensive solutions to customers through our leading technology, life cycle support, and food application expertise. Our NextGen strategy includes four key pillars to deliver continued organic growth and margin expansion.

• Customer First Service Organization. Leveraging our global footprint and large installed base to strengthen customer partnerships through a more prescriptive service model. Our enhanced regional service capabilities and data driven approach allow us to improve on-time parts delivery, reduce unplanned downtime events, and optimize our customers’ operations.
• Integrated Value Proposition. Broadening and deepening our product leadership through targeted innovation. Our priorities include strengthening our full-line capabilities, allowing technology to seamlessly flow together as a cohesive system. We also are addressing customer pain points by creating differentiated solutions that increase yield and throughput while reducing waste, labor requirements, and energy usage.
• Capture Full Market Potential. Elevating commercial execution through our customer focused go-to-market strategy that drives cross-selling, accelerates growth in emerging markets, and enhances customer retention.
• Operational Distinctiveness. Harnessing our enterprise-wide relentless continuous improvement culture to reduce operational complexity, unlock efficiency gains, and enable margin improvement.

Our approach to Environmental, Social and Governance (ESG) initiatives is embedded in our overall company strategy and is advanced through five key pillars, related to:

• Our customers, to whom we offer diverse solutions, operational scale and application, service, and digital expertise focused on enabling customers to reach their sustainability goals;
• Our products and service solutions that offer efficient energy and water usage, extend product shelf life and equipment lifespans, contribute to food traceability and safety, and help minimize food loss;
• Our people and communities, for and with whom we are creating a values-driven workplace, ensuring all employees have the tools they need to succeed and experience a sense of belonging;
• Our operations, where we are integrating practices to reduce our greenhouse gas (GHG) emissions, curb energy use, minimize waste generation, and optimize water use; and
• Our supply partners, with whom we are engaging to better understand their environmental impact and identify collaborative opportunities to more effectively achieve common sustainability goals.

Strategic Acquisition of Marel hf.

On January 2, 2025, the Company closed the acquisition of Marel, a multi-national food processing company based in Gardabaer, Iceland that manufactures equipment and provides other services for food processing in the poultry, meat, fish, and pet food industries. The purpose of the Marel Transaction was to create a leading and diversified global food and beverage technology solutions provider by bringing together two renowned companies with long histories, complementary product portfolios, highly respected brands, and cutting-edge technology to enable global customers to more efficiently access industry leading technology worldwide. Refer to Note 2. Acquisitions of the Notes to the Consolidated Financial Statements for additional information on the Marel Transaction.

The disclosures in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Quarterly Report on Form 10-Q speak to the combined company subsequent to the Marel Transaction unless otherwise noted.

Business Conditions and Outlook

For the first quarter 2026, we delivered year-over-year growth in revenue, margins, and earnings per share. Our bottom-line performance was driven primarily by lower non-recurring and transaction related costs as well as margin enhancement efforts and lower interest expense. Orders remained strong, reflecting continued commercial momentum from global poultry customers and healthy demand from meat and fruit and vegetable end markets.

For the full year 2026, we continue to expect year-over-year growth in revenue, margins, and earnings per share. At the same time, we are closely monitoring how rising inflation may impact the price-cost dynamics for both JBT Marel and our customers.

CONSOLIDATED RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(In millions, except %)

(1) Refer to the 'Reconciliation of Non-GAAP Measures' section below for additional information on Adjusted EBITDA.

Revenue

Total revenue for the three months ended March 31, 2026 increased $82 million or 9.6% compared to the same period in 2025. Organic revenue contributed $30 million and foreign currency translation was favorable by $52 million compared to the prior year. The increase in organic revenue was primarily the result of increases in volume for recurring and non-recurring revenue.

Gross Profit and Gross Profit Margin

Gross profit margin increased 90 bps to 35.1% compared to 34.2% in 2025. The increase was primarily attributable to an increase in revenue and benefits from synergies, partially offset by higher tariff costs compared to the prior year.

Selling, general and administrative expense

Selling, general and administrative expense decreased $64 million compared to the same period in the prior year. Selling, general and administrative expense as a percentage of revenue decreased 1,020 bps to 27.9% compared to 38.1% in the same period last year. This decrease is primarily driven by benefits from our JBT Marel 2025 Integration restructuring plan and lower M&A costs compared to the prior year.

Pension expense, other than service cost

Pension expense, other than service cost decreased $147 million compared to the same period in the prior year. This decrease was primarily due to the settlement charge of $147 million recognized in the first quarter of 2025 upon the termination of the U.S. qualified defined benefit pension plan.

Interest expense, net

Interest expense, net decreased $31 million compared to the prior‑year period, primarily due to the release of capitalized debt issuance costs associated with the termination of the Company’s bridge credit agreement in the first quarter of 2025 and the benefit from the Company’s net investment hedges executed in the second and third quarters of 2025.

Income tax provision (benefit)

The effective tax rate on net income for the three months ended March 31, 2026 was 25.5%. The tax rate for the three months ended March 31, 2026 was unfavorably impacted by discrete items totaling $1 million. The discrete items are primarily driven by an expense from a change in management’s indefinite reinvestment assertion related to foreign earnings and a benefit related to stock compensation.

The effective tax rate on the Company’s net loss for the three months ended March 31, 2025 was 21.1%. The tax benefit for the period was reduced by discrete items totaling $2 million, primarily driven by non-deductible acquisition costs.

Net income (loss) and Adjusted EBITDA

Net income for the three months ended March 31, 2026 was $45 million compared to a net loss of $173 million for the same period in 2025, representing an increase of $218 million. This increase was primarily the result of lower non-recurring costs and lower interest expense compared to the prior year.

Adjusted EBITDA was $142 million for the three months ended March 31, 2026 compared to $112 million during the same period in 2025, representing an increase of $30 million. The increase in Adjusted EBITDA was driven by increased volume and gross profit from synergies.

Net income (loss) margin increased to 4.8% compared to (20.3)% for the same period in 2025. This increase was primarily the result of lower non-recurring costs and lower interest expense compared to the same period in 2025. Adjusted EBITDA margin increased 210 bps to 15.2% compared to 13.1% for the same period in 2025. This increase was driven by a higher gross profit margin and lower selling, general and administrative expense due to volume leverage on fixed costs compared to the prior year.

OPERATING RESULTS OF BUSINESS SEGMENTS

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(In millions, except %)

(1) Refer to Note 14. Business Segment Information of the Notes to Condensed Consolidated Financial Statements for additional information on segment Adjusted EBITDA.

Protein Solutions

Protein Solutions segment revenue increased by $82 million or 21.7% during the three months ended March 31, 2026 compared to the same period in 2025, of which favorable currency translation accounted for $31 million. Organic revenue growth was driven by higher recurring revenue and a recovery in nonrecurring project activity related to poultry customer end markets compared to the prior‑year period.

Protein Solutions segment Adjusted EBITDA was $100 million or 21.7% of segment revenue, for the three months ended March 31, 2026, compared to $63 million or 16.5% for the same period in 2025. The increase of $37 million or 58.7% was primarily driven by higher gross margin and benefits from synergies, partially offset by higher tariff costs compared to the prior-year period.

Prepared Food and Beverage Solutions

Prepared Food and Beverage Solutions segment revenue was flat for the three months ended March 31, 2026 compared to the same period in 2025, including a $21 million benefit from favorable foreign currency translation. The decline in organic revenue was primarily driven by lower volume across certain segment end markets during the period.

Prepared Food and Beverage Solutions segment Adjusted EBITDA was $70 million, or 14.7% of segment revenue, for the three months ended March 31, 2026, compared to $78 million, or 16.4% for the same period in 2025. The decrease of $8 million or 10.3%, was primarily driven by lower overall performance, higher tariff costs and lower volume across certain segment end markets during the period.

Reconciliation of Non-GAAP Measures

We present non-GAAP financial measures in this quarterly report on Form 10-Q. These non-GAAP financial measures adjust for certain amounts that are otherwise included or excluded from a measure calculated under U.S. GAAP. By adjusting for these items, we believe we provide greater transparency into our operating results and trends, and a more meaningful comparison of our ongoing operating results, consistent with how management evaluates performance. Management uses these non-GAAP financial measures in financial and operational evaluation, planning and forecasting. We also believe that these non-GAAP measures are useful to investors as a way to evaluate and compare our operating performance against peers in the Company's industry. The adjustments generally fall within the following categories: restructuring related costs, M&A related costs, pension-related costs, and other major items affecting comparability of our ongoing operating results.

The non-GAAP financial measures presented in this report may differ from similarly-titled measures used by other companies. The non-GAAP financial measures are not intended to be used as a substitute for, nor should they be considered in isolation of, financial measures prepared in accordance with U.S. GAAP.

Additional details for each Non-GAAP financial measure follow:

• Adjusted EBITDA and Adjusted EBITDA margin: We define Adjusted EBITDA as earnings adjusted for income taxes, interest expense (income), net, other financing income, pension expense other than service cost, restructuring related costs, M&A related costs and depreciation and amortization, including acquisition related depreciation and amortization. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue.
• Adjusted income and Adjusted diluted earnings per share: We adjust earnings for restructuring related costs, M&A related costs, which include integration costs, amortization of inventory step-up from business combinations, impacts of foreign currency derivatives and trades to hedge variability of exchange rates on the cash consideration paid for business combination, advisory and transaction costs for both potential and completed M&A transactions and strategy, acquisition related amortization and depreciation, amortization of debt issuance costs related to financing for M&A transactions, non-cash pension plan related settlement costs and the related tax impact.
• Free cash flow: We define free cash flow as cash provided by operating activities, less capital expenditures, plus proceeds from sale of fixed assets and pension contributions.

The tables below reconcile each non-GAAP financial measure to the most comparable GAAP financial measure.

The following table presents a reconciliation of the Company's reported income (loss) to Adjusted EBITDA.

(In millions)

(1) Other financing income represents transaction gains from fair value hedges on our foreign currency denominated debt, and are considered non-operating as they relate to our cost of borrowing on this debt.

(2) Pension expense, other than service cost, is excluded as it represents all non service-related pension expense, which consists of non-cash interest cost, expected return on plan assets, amortization of actuarial gains and losses, and settlement charges.

(3) Restructuring and related costs, net incurred as a direct result of the restructuring program primarily consists of severance and related costs and are excluded as they are not part of the ongoing operations of our underlying business.

(4) M&A related costs for the three months ended March 31, 2026, include advisory, strategy and integration related costs for completed M&A transactions. M&A related costs are excluded as they are generally short-term in nature and turn over quickly or are not part of the ongoing operations of our underlying business.

(5) Depreciation and amortization, including the acquisition related amortization and depreciation expense, is excluded to determine Adjusted EBITDA.

The table below provides a reconciliation of income (loss) as reported to adjusted income and adjusted diluted earnings per share.

(In millions, except per share data)

(1) Impact on tax provision was calculated using the enacted rate for the relevant jurisdiction for the quarters ended March 31, 2026 and 2025, respectively.

The table below provides a reconciliation of cash provided by operating activities to free cash flow:

(in millions)

Restructuring

In the first quarter of 2025, the Company implemented a restructuring plan (the “JBT Marel 2025 Integration Restructuring Plan”) to achieve a portion of its synergy targets as a result of the Marel acquisition to optimize the overall cost structure for the combined Company on a global basis. The initiatives under this includes streamlining operations and adjusting our general and administrative infrastructure to meet the strategic needs of the Company. The total estimated cost in connection with this plan is in the range of $55 million to $60 million. The Company recognized cumulative restructuring charges of $29 million through March 31, 2026 and expects to recognize the remaining costs by the end of 2026.

The following table details the cumulative amount of annualized savings and incremental savings for the JBT Marel 2025 Integration restructuring plan:

(In millions)

Cumulative cost savings for the JBT Marel 2025 Integration restructuring plan are expected to be between $65 million and $75 million.

For additional financial information about restructuring, refer to Note 15. Restructuring of the Notes to the Condensed Consolidated Financial Statements.

Liquidity and Capital Resources

Overview of Sources and Uses of Cash

Our primary sources of liquidity include our cash flows generated from operations and availability under our revolving credit facility.

For the three months ended March 31, 2026, we had total operating cash flows of $119 million. Our liquidity as of March 31, 2026, or cash plus borrowing ability under our existing revolving credit facility, was $2.1 billion.

In the second quarter of 2026, the Company's 0.25% Convertible Senior Notes, which were originally issued in the second quarter of 2021, are scheduled to mature. The Company expects to satisfy the outstanding principal amount of $403 million through cash repayment at maturity, utilizing cash on hand or available under our revolving credit facility. Based on our current capital allocation objectives, we anticipate capital expenditures to be between $105 million and $120 million during 2026. Our level of capital expenditures varies from time to time as a result of actual and anticipated business conditions. During 2026, we also expect to incur integration costs and other synergy-related costs in the range of $45 million to $55 million related to the acquisition of Marel in the first quarter of 2025.

Additionally, the cash flows generated by our operations are expected to be sufficient to satisfy our principal cash requirements that include our working capital needs, new product development, restructuring expenses, capital expenditures, income taxes, debt interest and repayments, dividends, and other financing arrangements.

As of March 31, 2026, we had $211 million of cash and cash equivalents, $103 million of which was held by our foreign subsidiaries. Although certain funds are considered permanently invested in our foreign subsidiaries, we are not presently aware of any restriction on the repatriation of these funds. We maintain significant operations outside of the U.S., and many of our uses of cash for working capital and capital expenditures arise in these foreign jurisdictions. If these funds were needed to fund our operations or satisfy obligations in the U.S., they could be repatriated and their repatriation into the U.S. could cause us to incur additional U.S. income tax and foreign withholding taxes. The foreign withholding taxes on these repatriations to the U.S. would potentially be partially offset by U.S. foreign tax credits.

As noted above, certain funds held outside of the U.S. are considered permanently invested in our non-U.S. subsidiaries. At times, these foreign subsidiaries have cash balances that exceed their immediate working capital or other cash needs. In these circumstances, the foreign subsidiaries may loan funds to the U.S. parent company on a temporary basis; the U.S. parent company has in the past and may in the future use the proceeds of these temporary intercompany loans to reduce outstanding borrowings under our committed credit facilities. By using available non-U.S. cash to repay our debt on a short-term basis, we can optimize our leverage ratio, which has the effect of lowering our interest costs.

Cash Flows

Cash flows for the three months ended March 31, 2026 and 2025 were as follows:

(In millions)

Cash provided by operating activities during the three months ended March 31, 2026 was $119 million, representing a $85 million increase compared to the same period in 2025. The increase was driven by higher net income, increased customer advance collections, and lower accounts payable payments, partially offset by higher inventory purchases and receivable growth.

Cash required by investing activities was $19 million during the three months ended March 31, 2026, compared to cash required of $1,766 million during the same period in 2025. The decrease in cash outflows during the period reflects the absence of acquisition-related payments, as the acquisition of Marel occurred in the first quarter of 2025.

Cash required by financing activities was $54 million during the three months ended March 31, 2026, compared to cash provided of $621 million during the same period in 2025. The year-over-year decrease in net cash provided by financing activities was due to the absence of the prior-year financing activities utilized to fund the acquisition of Marel in the first quarter of 2025.

Financing Arrangements

As of March 31, 2026, we had $1.8 billion of availability under the revolving credit facility.

Our Second A&R Credit Agreement includes restrictive covenants that, if not met, could lead to a renegotiation of our credit lines, a requirement to repay our borrowings and/or a significant increase in our cost of financing. Restrictive covenants include a minimum interest coverage ratio, a maximum leverage ratio, as well as certain events of default. As of March 31, 2026, we were in compliance with all covenants in the Second A&R Credit Agreement. We expect to remain in compliance with all covenants.

On January 2, 2025, we executed takeout financing consisting of an amended and restated 5-year, $1.8 billion revolving credit facility and a 7-year, $900 million senior secured term loan B.

Concurrently with the issuances of the 2026 Notes and the 2030 Notes, we entered into convertible note hedge transactions and warrant transactions.

For additional information about our borrowings, refer to Note 6. Debt of the Notes to the Condensed Consolidated Financial Statements.

As of March 31, 2026, a portion of our total gross outstanding debt of $1,869 million effectively remained fixed rate debt, with the 2026 Notes and the 2030 Notes subject to a fixed rate of 0.25% and 0.375%, respectively. Our revolving credit facility and Term Loan B are subject to floating, or market rates, in addition to a premium charged for their respective credit spreads. Approximately $892 million or 48% of the total debt balance as of March 31, 2026 was variable rate debt and subject to floating rates.

On January 3, 2025, we entered into five cross-currency swaps expiring in January 2032 related to the portion of the U.S. dollar denominated Term Loan B debt drawn down by JBT Marel's European entity. These cross currency swap agreements have a combined notional amount of $693 million and synthetically swapped an average SOFR interest rate of 3.69% with an average EURIBOR rate of 1.93% for the three months ended March 31, 2026, to hedge the impact of variability in exchange rates on the U.S. dollar dominated debt and related interest payments, excluding credit spread, by our euro-functional entity.

CRITICAL ACCOUNTING ESTIMATES

There were no material changes in our judgments and assumptions associated with the development of our critical accounting estimates during the period ended March 31, 2026. Refer to our Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of our critical accounting estimates.

There have been no material changes in reported market risks from the information reported in our Annual Report on Form 10-K for the year ended December 31, 2025.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, management of the Company carried out an evaluation, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).

As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended 2025, prior to the acquisition of Marel hf. (“Marel”), Marel management identified material weaknesses in its internal control over financial reporting, which are described below. The acquired business was previously excluded from the Company’s internal control over financial reporting assessment under SEC staff guidance but is included in the Company’s assessment for the current fiscal year.

Conclusion on Effectiveness

In accordance with SEC guidance, the Company recognizes the substantial overlap between a company’s disclosure controls and procedures and its internal control over financial reporting. Due to the material weaknesses in internal control over financial reporting described below, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2026. Notwithstanding this conclusion, in the opinion of management, including the Company’s Chief Executive Officer and Chief Financial Officer, the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition as reported in conformity with U.S. GAAP.

Previously Identified Material Weaknesses in Internal Control Over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Prior to the acquisition, the management of Marel, which was not previously required to comply with the internal controls requirement of the Sarbanes-Oxley Act or U.S. GAAP, identified the following material weaknesses in its internal control over financial reporting, which remained unremediated as of March 31, 2026:

• Information Technology: The Company’s acquired entity, Marel, did not design and maintain effective information technology general controls for information systems that are relevant to financial reporting. Specifically, the acquired entity did not design and maintain: (i) program change management controls to ensure that information technology program and data changes are identified, tested, authorized, and implemented appropriately; (ii) user access controls to ensure appropriate segregation of duties and to adequately restrict user and privileged access to appropriate personnel; (iii) computer operations controls to ensure that processing and transfer of data, and data backups and recovery are monitored; and (iv) program development controls to ensure that new software development is tested, authorized and implemented appropriately.

These IT deficiencies did not result in a material misstatement to the consolidated financial statements, however, the deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected.

• Journal entries: The Company’s acquired entity, Marel, did not design and maintain effective controls over the recording and review of journal entries for validity, accuracy, and completeness. Specifically, certain key accounting personnel have the ability to prepare and post journal entries without an appropriately designed independent review. This material weakness did not result in a material misstatement to the consolidated financial statements.

While the above material weaknesses have not resulted in a material misstatement to the consolidated financial statements, such material weaknesses resulted in misstatements that were not material to our consolidated financial statements as of and for the three months ended March 31, 2025. The above material weaknesses could result in misstatements of Marel’s financial statement accounts or disclosures to the annual or interim consolidated financial statements that would not be prevented or detected.

Remediation Plan and Progress

The Company is committed to remediating the material weaknesses and has taken, or is in the process of taking, the following remediation measures:

• Applied a risk‑based approach to prioritize the design of controls related to information technology and journal entry processing controls.
• Configuration of controls related to user access and change management within information technology environments impacting financial reporting, with ongoing evaluation of control design, implementation and operating effectiveness.
• Configured system‑based, role‑based access controls over journal entry processing, with ongoing evaluation of control design, implementation and operating effectiveness.
• Continuing to perform manual control activities designed to mitigate risks associated with the identified control deficiencies while remediation efforts are ongoing.
• Continued engagement of external advisors to support remediation efforts, including project management and guidance on control design and documentation.
• Conducting targeted training efforts and hired personnel with relevant internal control experience to support remediation and ongoing control performance.

As management continues to evaluate the Company’s internal control over financial reporting, the Company may take additional measures to address control deficiencies or may modify certain remediation measures described above.

The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls operate effectively.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in the evaluation for the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

There have been no material changes in reported risk factors from the information reported in Item 1A. “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.