Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries The Middleby Corporation Reports Third Quarter Results By: The Middleby Corporation via Business Wire November 09, 2022 at 07:00 AM EST Revenue of $993 million, a 21.5% increase year over year Diluted Earnings per share of $1.92 and adjusted net earnings per share of $2.18, an increase of 13.5% year over year Adjusted EBITDA of $212 million, a 23.3% increase year over year Profitability grew to an organic adjusted EBITDA margin of 22.6% Completed the acquisition of CP Packaging, expanding Middleby’s offerings in packaging innovation Completed the acquisition of Colussi Ermes, enhancing Middleby’s automated washing & food safety solutions The Middleby Corporation (NASDAQ: MIDD), a leading worldwide manufacturer of equipment for the commercial foodservice, food processing, and residential kitchen industries, today reported net earnings for the third quarter of 2022. “We continue to execute on our strategic and operating initiatives, while realizing growth in sales and profitability. We reported record third quarter sales and EBITDA, with margins ahead of pre-covid levels despite significant continued inflationary effects impacting the quarter,” said Tim FitzGerald, CEO of The Middleby Corporation. 2022 Third Quarter Financial Results Net sales increased 21.5% in the third quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales increased 14.2% in the third quarter over the comparative prior year period, reflecting higher shipments as we realize benefits of investments to increase our production throughput. Organic net sales (a non-GAAP measure) increases were reported for all three segments due to improvements in market conditions and consumer demand in the third quarter of 2022. A reconciliation of reported net sales by segment is as follows: Commercial Foodservice Residential Kitchen Food Processing Total Company Reported Net Sales Growth 21.9 % 14.3 % 31.6 % 21.5 % Acquisitions 7.4 % 17.7 % 14.7 % 10.9 % Foreign Exchange Rates (2.5)% (5.7)% (4.8)% (3.6)% Organic Net Sales Growth (1) (2) 17.0 % 2.3 % 21.7 % 14.2 % (1) Organic net sales growth defined as total sales growth excluding impact of acquisitions and foreign exchange rates (2) Totals may be impacted by rounding Foreign exchange losses were approximately $8.6 million in the third quarter, which negatively impacted adjusted earnings per share by $0.12. For the nine months period, foreign exchange losses were approximately $18.2 million, which negatively impacted adjusted earnings per share by $0.25. Adjusted EBITDA (a non-GAAP measure) was $212.3 million, in the third quarter of 2022 due to the impact of higher sales volumes and profitability initiatives. A reconciliation of organic adjusted EBITDA (a non-GAAP measure) by segment is as follows: Commercial Foodservice Residential Kitchen Food Processing Total Company Adjusted EBITDA 26.7 % 15.8 % 22.2 % 21.4 % Acquisitions 0.1 % (4.9)% (1.5)% (1.1)% Foreign Exchange Rates — % (0.1)% (0.3)% (0.1)% Organic Adjusted EBITDA (1) (2) 26.5 % 20.6 % 23.9 % 22.6 % (1) Organic Adjusted EBITDA defined as Adjusted EBITDA excluding impact of acquisitions and foreign exchange rates. (2) Totals may be impacted by rounding Operating cash flows during the third quarter amounted to $84.0 million in comparison to $173.7 million in the prior year period. The total leverage ratio per our credit agreements was 3.1x. The trailing twelve month bank agreement pro-forma EBITDA was $871.7 million. Cash balances at the end of the quarter were $144.9 million. Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2022 fiscal third quarter amounted to $2.7 billion as compared to $2.3 billion at the end of fiscal 2021. Debt increased $130 million related to recent business acquisitions. Additionally, our borrowing availability at quarter end was approximately $2.1 billion. “The demand outlook for our products at both our commercial foodservice and food processing segments remains strong. We are engaged with customers on our latest innovations offering solutions to address labor, energy, food costs and speed. We have made significant investments in technology and automation throughout the pandemic positioning us better than ever to support the challenges facing our customers today.” “The residential housing market has become significantly more challenged with the impact of interest rate hikes and inflationary effects that has slowed consumer spend on residential kitchen equipment. While there is significant uncertainty as we move into the next year, our order backlog remains ahead of pre-covid levels. We are confident in our ability to maintain industry-leading profitability levels even in challenging market conditions. We expect investments made over the past several years in our award-winning showrooms, industry-leading culinary teams, and our newly developed designer services programs will increase market penetration of our exciting portfolio of industry leading brands and products,” concluded Mr. FitzGerald. Conference Call The company has scheduled a conference call to discuss the third quarter results at 11 a.m. Eastern/10 a.m. Central Time on November 9th. The conference call is accessible through the Investor Relations section of the company website at www.middleby.com. If website access is not available, attendees can join the conference by dialing (833) 630-1956 or (412) 317-1837 and ask to join the Middleby conference call. The conference call will be available for replay from the company’s website. Statements in this press release or otherwise attributable to the company regarding the company's business which are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company cautions investors that such statements are estimates of future performance and are highly dependent upon a variety of important factors that could cause actual results to differ materially from such statements. Such factors include variability in financing costs; quarterly variations in operating results; dependence on key customers; international exposure; foreign exchange and political risks affecting international sales; changing market conditions; the impact of competitive products and pricing; the timely development and market acceptance of the company's products; the availability and cost of raw materials; and other risks detailed herein and from time-to-time in the company's SEC filings. Any forward-looking statement speaks only as of the date hereof, and the company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. The Middleby Corporation is a global leader in the foodservice industry. The company develops and manufactures a broad line of solutions used in commercial foodservice, food processing, and residential kitchens. Supporting the company’s pursuit of the most sophisticated innovation, the state-of-the-art Middleby Innovation Kitchens showcases and demonstrates the most advanced Middleby solutions. In 2022 Middleby was named a World’s Best Employer by Forbes and is a proud philanthropic partner to organizations addressing food insecurity. THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in 000’s, Except Per Share Information) (Unaudited) Three Months Ended Nine Months Ended 3rd Qtr, 2022 3rd Qtr, 2021 3rd Qtr, 2022 3rd Qtr, 2021 Net sales $ 992,871 $ 817,545 $ 3,001,148 $ 2,384,376 Cost of sales 627,639 517,918 1,944,664 1,505,149 Gross profit 365,232 299,627 1,056,484 879,227 Selling, general and administrative expenses 201,200 175,354 596,757 496,022 Restructuring expenses 2,327 791 8,231 2,596 Merger termination fee — (110,000 ) — (110,000 ) Gain on sale of plant — — — (763 ) Income from operations 161,705 233,482 451,496 491,372 Interest expense and deferred financing amortization, net 24,067 13,192 62,563 43,481 Net periodic pension benefit (other than service costs & curtailment) (9,944 ) (11,363 ) (32,244 ) (34,268 ) Other expense (income), net 8,529 794 18,478 (1,366 ) Earnings before income taxes 139,053 230,859 402,699 483,525 Provision for income taxes 34,684 54,893 99,327 97,711 Net earnings $ 104,369 $ 175,966 $ 303,372 $ 385,814 Net earnings per share: Basic $ 1.94 $ 3.19 $ 5.60 $ 6.99 Diluted $ 1.92 $ 3.09 $ 5.50 $ 6.83 Weighted average number of shares Basic 53,867 55,232 54,190 55,225 Diluted 54,384 56,939 55,134 56,526 THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in 000’s) (Unaudited) Oct 1, 2022 Jan 1, 2022 ASSETS Cash and cash equivalents $ 144,918 $ 180,362 Accounts receivable, net 593,514 577,142 Inventories, net 1,062,634 837,418 Prepaid expenses and other 121,271 92,269 Prepaid taxes 28,201 19,894 Total current assets 1,950,538 1,707,085 Property, plant and equipment, net 423,947 380,980 Goodwill 2,287,420 2,243,469 Other intangibles, net 1,781,801 1,875,377 Long-term deferred tax assets 22,340 33,194 Other assets 205,815 143,493 Total assets $ 6,671,861 $ 6,383,598 LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term debt $ 44,664 $ 27,293 Accounts payable 261,169 304,740 Accrued expenses 631,945 582,855 Total current liabilities 937,778 914,888 Long-term debt 2,693,325 2,387,001 Long-term deferred tax liability 220,400 186,935 Accrued pension benefits 154,256 219,680 Other non-current liabilities 167,559 180,818 Stockholders' equity 2,498,543 2,494,276 Total liabilities and stockholders' equity $ 6,671,861 $ 6,383,598 THE MIDDLEBY CORPORATION NON-GAAP SEGMENT INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Commercial Foodservice Residential Kitchen Food Processing Total Company (1) Three Months Ended October 1, 2022 Net sales $ 623,662 $ 220,965 $ 148,244 $ 992,871 Segment Operating Income $ 143,678 $ 29,788 $ 26,982 $ 161,705 Operating Income % of net sales 23.0 % 13.5 % 18.2 % 16.3 % Depreciation 5,855 1,861 1,558 9,479 Amortization 14,283 1,289 4,311 19,883 Restructuring expenses 663 1,894 (230 ) 2,327 Acquisition related adjustments 1,836 — 303 3,189 Stock compensation — — — 15,761 Segment adjusted EBITDA $ 166,315 $ 34,832 $ 32,924 $ 212,344 Adjusted EBITDA % of net sales 26.7 % 15.8 % 22.2 % 21.4 % Three Months Ended October 2, 2021 Net sales $ 511,480 $ 193,395 $ 112,670 $ 817,545 Segment Operating Income $ 105,529 $ 31,322 $ 21,425 $ 233,482 Operating Income % of net sales 20.6 % 16.2 % 19.0 % 28.6 % Depreciation 5,793 3,608 1,353 10,876 Amortization 12,822 3,589 1,773 18,184 Restructuring expenses 473 278 40 791 Acquisition related adjustments 66 1,676 — 1,742 Acquisition deal costs — — — (103,106 ) Stock compensation — — — 10,197 Segment adjusted EBITDA $ 124,683 $ 40,473 $ 24,591 $ 172,166 Adjusted EBITDA % of net sales 24.4 % 20.9 % 21.8 % 21.1 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $21.7 million and $17.6 million for the three months ended October 1, 2022 and October 2, 2021, respectively. THE MIDDLEBY CORPORATION NON-GAAP SEGMENT INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Commercial Foodservice Residential Kitchen Food Processing Total Company (1) Nine Months Ended October 1, 2022 Net sales $ 1,776,994 $ 832,054 $ 392,100 $ 3,001,148 Segment Operating Income $ 390,740 $ 100,811 $ 65,642 $ 451,496 Operating Income % of net sales 22.0 % 12.1 % 16.7 % 15.0 % Depreciation 17,577 9,271 4,182 31,608 Amortization 41,644 20,448 7,844 69,936 Restructuring expenses 2,934 2,892 2,405 8,231 Acquisition related adjustments (1,256 ) 15,062 303 15,159 Charitable support to Ukraine — — — 798 Stock compensation — — — 42,641 Segment adjusted EBITDA $ 451,639 $ 148,484 $ 80,376 $ 619,869 Adjusted EBITDA % of net sales 25.4 % 17.8 % 20.5 % 20.7 % Nine Months Ended October 2, 2021 Net sales $ 1,501,413 $ 527,791 $ 355,172 $ 2,384,376 Segment Operating Income $ 311,789 $ 95,088 $ 68,048 $ 491,372 Operating Income % of net sales 20.8 % 18.0 % 19.2 % 20.6 % Depreciation 17,579 9,120 4,005 31,180 Amortization 42,272 7,145 5,450 54,867 Restructuring expenses 1,386 834 376 2,596 Facility consolidation related expenses 993 — — 993 Acquisition related adjustments 803 1,676 — 2,479 Stock compensation — — — 27,135 Gain on sale of plant (678 ) (85 ) (763 ) Acquisition deal costs — — — (90,285 ) Segment adjusted EBITDA $ 374,144 $ 113,778 $ 77,879 $ 519,574 Adjusted EBITDA % of net sales 24.9 % 21.6 % 21.9 % 21.8 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $60.6 million and $46.2 million for the nine months ended October 1, 2022 and October 2, 2021, respectively. THE MIDDLEBY CORPORATION NON-GAAP INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Three Months Ended 3rd Qtr, 2022 3rd Qtr, 2021 $ Diluted per share $ Diluted per share Net earnings $ 104,369 $ 1.92 $ 175,966 $ 3.09 Amortization (1) 21,661 0.40 19,754 0.35 Restructuring expenses 2,327 0.04 791 0.01 Acquisition related costs 3,189 0.06 1,742 0.03 Net periodic pension benefit (other than service costs & curtailment) (9,944 ) (0.18 ) (11,363 ) (0.20 ) Acquisition deal costs — — (103,106 ) (1.81 ) Income tax effect of pre-tax adjustments (4,291 ) (0.08 ) 22,584 0.40 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — 0.02 — 0.05 Adjusted net earnings $ 117,311 $ 2.18 $ 106,368 $ 1.92 Diluted weighted average number of shares 54,384 56,939 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) (494 ) (1,679 ) Adjusted diluted weighted average number of shares 53,890 55,260 Nine Months Ended 3rd Qtr, 2022 3rd Qtr, 2021 $ Diluted per share $ Diluted per share Net earnings $ 303,372 $ 5.50 $ 385,814 $ 6.83 Amortization (1) 75,309 1.37 59,492 1.05 Restructuring expenses 8,231 0.15 2,596 0.05 Acquisition related costs 15,159 0.27 2,479 0.04 Acquisition deal costs — — (90,285 ) (1.60 ) Facility consolidation related expenses — — 993 0.02 Net periodic pension benefit (other than service costs & curtailment) (32,244 ) (0.58 ) (34,268 ) (0.61 ) Gain on sale of plant — — (763 ) (0.01 ) Charitable support to Ukraine 798 0.01 — — Discrete tax adjustments — — (18,900 ) (0.33 ) Income tax effect of pre-tax adjustments (16,611 ) (0.30 ) 14,640 0.26 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — 0.11 — 0.13 Adjusted net earnings $ 354,014 $ 6.53 $ 321,798 $ 5.83 Diluted weighted average number of shares 55,134 56,526 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) (932 ) (1,284 ) Adjusted diluted weighted average number of shares 54,202 55,242 (1) Includes amortization of deferred financing costs and convertible notes issuance costs. (2) Adjusted diluted weighted average number of shares was calculated based on excluding the dilutive effect of shares to be issued upon conversion of the notes to satisfy the amount in excess of the principal since the company's capped call offsets the dilutive impact of the shares underlying the convertible notes. The calculation of adjusted diluted earnings per share excludes the principal portion of the convertible notes as this will always be settled in cash. Three Months Ended Nine Months Ended 3rd Qtr, 2022 3rd Qtr, 2021 3rd Qtr, 2022 3rd Qtr, 2021 Net Cash Flows Provided By (Used In): Operating activities $ 83,991 $ 173,659 $ 173,449 $ 346,040 Investing activities (150,609 ) (388,457 ) (257,868 ) (412,679 ) Financing activities 54,856 73,092 72,594 54,361 Free Cash Flow Cash flow from operating activities $ 83,991 $ 173,659 $ 173,449 $ 346,040 Less: Capital expenditures, net of sale proceeds (18,781 ) (10,307 ) (50,914 ) (23,670 ) Free cash flow $ 65,210 $ 163,352 $ 122,535 $ 322,370 NON-GAAP FINANCIAL MEASURES The company supplements its consolidated financial statements presented on a GAAP basis with this non-GAAP financial information to provide investors with greater insight, increase transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP, and the financial results prepared in accordance with GAAP and reconciliations from these results should be carefully evaluated. In addition, the non-GAAP financial measures included in this press release do not have standard meanings and may vary from similarly titled non-GAAP financial measures used by other companies. The company believes that organic net sales growth, non-GAAP adjusted segment EBITDA, adjusted net earnings and adjusted diluted per share measures are useful as supplements to its GAAP results of operations to evaluate certain aspects of its operations and financial performance, and its management team primarily focuses on non-GAAP items in evaluating performance for business planning purposes. The company also believes that these measures assist it with comparing its performance between various reporting periods on a consistent basis, as these measures remove from operating results the impact of items that, in its opinion, do not reflect its core operating performance including, for example, intangibles amortization expense, impairment charges, restructuring expenses, and other charges which management considers to be outside core operating results. The company believes that free cash flow is an important measure of operating performance because it provides management and investors a measure of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, repaying debt and repurchasing our common stock. The company believes that its presentation of these non-GAAP financial measures is useful because it provides investors and securities analysts with the same information that Middleby uses internally for purposes of assessing its core operating performance. View source version on businesswire.com: https://www.businesswire.com/news/home/20221109005410/en/Contacts Darcy Bretz, Investor and Public Relations, (847) 429-7756 Bryan Mittelman, Chief Financial Officer, (847) 429-7715 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
The Middleby Corporation Reports Third Quarter Results By: The Middleby Corporation via Business Wire November 09, 2022 at 07:00 AM EST Revenue of $993 million, a 21.5% increase year over year Diluted Earnings per share of $1.92 and adjusted net earnings per share of $2.18, an increase of 13.5% year over year Adjusted EBITDA of $212 million, a 23.3% increase year over year Profitability grew to an organic adjusted EBITDA margin of 22.6% Completed the acquisition of CP Packaging, expanding Middleby’s offerings in packaging innovation Completed the acquisition of Colussi Ermes, enhancing Middleby’s automated washing & food safety solutions The Middleby Corporation (NASDAQ: MIDD), a leading worldwide manufacturer of equipment for the commercial foodservice, food processing, and residential kitchen industries, today reported net earnings for the third quarter of 2022. “We continue to execute on our strategic and operating initiatives, while realizing growth in sales and profitability. We reported record third quarter sales and EBITDA, with margins ahead of pre-covid levels despite significant continued inflationary effects impacting the quarter,” said Tim FitzGerald, CEO of The Middleby Corporation. 2022 Third Quarter Financial Results Net sales increased 21.5% in the third quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales increased 14.2% in the third quarter over the comparative prior year period, reflecting higher shipments as we realize benefits of investments to increase our production throughput. Organic net sales (a non-GAAP measure) increases were reported for all three segments due to improvements in market conditions and consumer demand in the third quarter of 2022. A reconciliation of reported net sales by segment is as follows: Commercial Foodservice Residential Kitchen Food Processing Total Company Reported Net Sales Growth 21.9 % 14.3 % 31.6 % 21.5 % Acquisitions 7.4 % 17.7 % 14.7 % 10.9 % Foreign Exchange Rates (2.5)% (5.7)% (4.8)% (3.6)% Organic Net Sales Growth (1) (2) 17.0 % 2.3 % 21.7 % 14.2 % (1) Organic net sales growth defined as total sales growth excluding impact of acquisitions and foreign exchange rates (2) Totals may be impacted by rounding Foreign exchange losses were approximately $8.6 million in the third quarter, which negatively impacted adjusted earnings per share by $0.12. For the nine months period, foreign exchange losses were approximately $18.2 million, which negatively impacted adjusted earnings per share by $0.25. Adjusted EBITDA (a non-GAAP measure) was $212.3 million, in the third quarter of 2022 due to the impact of higher sales volumes and profitability initiatives. A reconciliation of organic adjusted EBITDA (a non-GAAP measure) by segment is as follows: Commercial Foodservice Residential Kitchen Food Processing Total Company Adjusted EBITDA 26.7 % 15.8 % 22.2 % 21.4 % Acquisitions 0.1 % (4.9)% (1.5)% (1.1)% Foreign Exchange Rates — % (0.1)% (0.3)% (0.1)% Organic Adjusted EBITDA (1) (2) 26.5 % 20.6 % 23.9 % 22.6 % (1) Organic Adjusted EBITDA defined as Adjusted EBITDA excluding impact of acquisitions and foreign exchange rates. (2) Totals may be impacted by rounding Operating cash flows during the third quarter amounted to $84.0 million in comparison to $173.7 million in the prior year period. The total leverage ratio per our credit agreements was 3.1x. The trailing twelve month bank agreement pro-forma EBITDA was $871.7 million. Cash balances at the end of the quarter were $144.9 million. Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2022 fiscal third quarter amounted to $2.7 billion as compared to $2.3 billion at the end of fiscal 2021. Debt increased $130 million related to recent business acquisitions. Additionally, our borrowing availability at quarter end was approximately $2.1 billion. “The demand outlook for our products at both our commercial foodservice and food processing segments remains strong. We are engaged with customers on our latest innovations offering solutions to address labor, energy, food costs and speed. We have made significant investments in technology and automation throughout the pandemic positioning us better than ever to support the challenges facing our customers today.” “The residential housing market has become significantly more challenged with the impact of interest rate hikes and inflationary effects that has slowed consumer spend on residential kitchen equipment. While there is significant uncertainty as we move into the next year, our order backlog remains ahead of pre-covid levels. We are confident in our ability to maintain industry-leading profitability levels even in challenging market conditions. We expect investments made over the past several years in our award-winning showrooms, industry-leading culinary teams, and our newly developed designer services programs will increase market penetration of our exciting portfolio of industry leading brands and products,” concluded Mr. FitzGerald. Conference Call The company has scheduled a conference call to discuss the third quarter results at 11 a.m. Eastern/10 a.m. Central Time on November 9th. The conference call is accessible through the Investor Relations section of the company website at www.middleby.com. If website access is not available, attendees can join the conference by dialing (833) 630-1956 or (412) 317-1837 and ask to join the Middleby conference call. The conference call will be available for replay from the company’s website. Statements in this press release or otherwise attributable to the company regarding the company's business which are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company cautions investors that such statements are estimates of future performance and are highly dependent upon a variety of important factors that could cause actual results to differ materially from such statements. Such factors include variability in financing costs; quarterly variations in operating results; dependence on key customers; international exposure; foreign exchange and political risks affecting international sales; changing market conditions; the impact of competitive products and pricing; the timely development and market acceptance of the company's products; the availability and cost of raw materials; and other risks detailed herein and from time-to-time in the company's SEC filings. Any forward-looking statement speaks only as of the date hereof, and the company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. The Middleby Corporation is a global leader in the foodservice industry. The company develops and manufactures a broad line of solutions used in commercial foodservice, food processing, and residential kitchens. Supporting the company’s pursuit of the most sophisticated innovation, the state-of-the-art Middleby Innovation Kitchens showcases and demonstrates the most advanced Middleby solutions. In 2022 Middleby was named a World’s Best Employer by Forbes and is a proud philanthropic partner to organizations addressing food insecurity. THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in 000’s, Except Per Share Information) (Unaudited) Three Months Ended Nine Months Ended 3rd Qtr, 2022 3rd Qtr, 2021 3rd Qtr, 2022 3rd Qtr, 2021 Net sales $ 992,871 $ 817,545 $ 3,001,148 $ 2,384,376 Cost of sales 627,639 517,918 1,944,664 1,505,149 Gross profit 365,232 299,627 1,056,484 879,227 Selling, general and administrative expenses 201,200 175,354 596,757 496,022 Restructuring expenses 2,327 791 8,231 2,596 Merger termination fee — (110,000 ) — (110,000 ) Gain on sale of plant — — — (763 ) Income from operations 161,705 233,482 451,496 491,372 Interest expense and deferred financing amortization, net 24,067 13,192 62,563 43,481 Net periodic pension benefit (other than service costs & curtailment) (9,944 ) (11,363 ) (32,244 ) (34,268 ) Other expense (income), net 8,529 794 18,478 (1,366 ) Earnings before income taxes 139,053 230,859 402,699 483,525 Provision for income taxes 34,684 54,893 99,327 97,711 Net earnings $ 104,369 $ 175,966 $ 303,372 $ 385,814 Net earnings per share: Basic $ 1.94 $ 3.19 $ 5.60 $ 6.99 Diluted $ 1.92 $ 3.09 $ 5.50 $ 6.83 Weighted average number of shares Basic 53,867 55,232 54,190 55,225 Diluted 54,384 56,939 55,134 56,526 THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in 000’s) (Unaudited) Oct 1, 2022 Jan 1, 2022 ASSETS Cash and cash equivalents $ 144,918 $ 180,362 Accounts receivable, net 593,514 577,142 Inventories, net 1,062,634 837,418 Prepaid expenses and other 121,271 92,269 Prepaid taxes 28,201 19,894 Total current assets 1,950,538 1,707,085 Property, plant and equipment, net 423,947 380,980 Goodwill 2,287,420 2,243,469 Other intangibles, net 1,781,801 1,875,377 Long-term deferred tax assets 22,340 33,194 Other assets 205,815 143,493 Total assets $ 6,671,861 $ 6,383,598 LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term debt $ 44,664 $ 27,293 Accounts payable 261,169 304,740 Accrued expenses 631,945 582,855 Total current liabilities 937,778 914,888 Long-term debt 2,693,325 2,387,001 Long-term deferred tax liability 220,400 186,935 Accrued pension benefits 154,256 219,680 Other non-current liabilities 167,559 180,818 Stockholders' equity 2,498,543 2,494,276 Total liabilities and stockholders' equity $ 6,671,861 $ 6,383,598 THE MIDDLEBY CORPORATION NON-GAAP SEGMENT INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Commercial Foodservice Residential Kitchen Food Processing Total Company (1) Three Months Ended October 1, 2022 Net sales $ 623,662 $ 220,965 $ 148,244 $ 992,871 Segment Operating Income $ 143,678 $ 29,788 $ 26,982 $ 161,705 Operating Income % of net sales 23.0 % 13.5 % 18.2 % 16.3 % Depreciation 5,855 1,861 1,558 9,479 Amortization 14,283 1,289 4,311 19,883 Restructuring expenses 663 1,894 (230 ) 2,327 Acquisition related adjustments 1,836 — 303 3,189 Stock compensation — — — 15,761 Segment adjusted EBITDA $ 166,315 $ 34,832 $ 32,924 $ 212,344 Adjusted EBITDA % of net sales 26.7 % 15.8 % 22.2 % 21.4 % Three Months Ended October 2, 2021 Net sales $ 511,480 $ 193,395 $ 112,670 $ 817,545 Segment Operating Income $ 105,529 $ 31,322 $ 21,425 $ 233,482 Operating Income % of net sales 20.6 % 16.2 % 19.0 % 28.6 % Depreciation 5,793 3,608 1,353 10,876 Amortization 12,822 3,589 1,773 18,184 Restructuring expenses 473 278 40 791 Acquisition related adjustments 66 1,676 — 1,742 Acquisition deal costs — — — (103,106 ) Stock compensation — — — 10,197 Segment adjusted EBITDA $ 124,683 $ 40,473 $ 24,591 $ 172,166 Adjusted EBITDA % of net sales 24.4 % 20.9 % 21.8 % 21.1 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $21.7 million and $17.6 million for the three months ended October 1, 2022 and October 2, 2021, respectively. THE MIDDLEBY CORPORATION NON-GAAP SEGMENT INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Commercial Foodservice Residential Kitchen Food Processing Total Company (1) Nine Months Ended October 1, 2022 Net sales $ 1,776,994 $ 832,054 $ 392,100 $ 3,001,148 Segment Operating Income $ 390,740 $ 100,811 $ 65,642 $ 451,496 Operating Income % of net sales 22.0 % 12.1 % 16.7 % 15.0 % Depreciation 17,577 9,271 4,182 31,608 Amortization 41,644 20,448 7,844 69,936 Restructuring expenses 2,934 2,892 2,405 8,231 Acquisition related adjustments (1,256 ) 15,062 303 15,159 Charitable support to Ukraine — — — 798 Stock compensation — — — 42,641 Segment adjusted EBITDA $ 451,639 $ 148,484 $ 80,376 $ 619,869 Adjusted EBITDA % of net sales 25.4 % 17.8 % 20.5 % 20.7 % Nine Months Ended October 2, 2021 Net sales $ 1,501,413 $ 527,791 $ 355,172 $ 2,384,376 Segment Operating Income $ 311,789 $ 95,088 $ 68,048 $ 491,372 Operating Income % of net sales 20.8 % 18.0 % 19.2 % 20.6 % Depreciation 17,579 9,120 4,005 31,180 Amortization 42,272 7,145 5,450 54,867 Restructuring expenses 1,386 834 376 2,596 Facility consolidation related expenses 993 — — 993 Acquisition related adjustments 803 1,676 — 2,479 Stock compensation — — — 27,135 Gain on sale of plant (678 ) (85 ) (763 ) Acquisition deal costs — — — (90,285 ) Segment adjusted EBITDA $ 374,144 $ 113,778 $ 77,879 $ 519,574 Adjusted EBITDA % of net sales 24.9 % 21.6 % 21.9 % 21.8 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $60.6 million and $46.2 million for the nine months ended October 1, 2022 and October 2, 2021, respectively. THE MIDDLEBY CORPORATION NON-GAAP INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Three Months Ended 3rd Qtr, 2022 3rd Qtr, 2021 $ Diluted per share $ Diluted per share Net earnings $ 104,369 $ 1.92 $ 175,966 $ 3.09 Amortization (1) 21,661 0.40 19,754 0.35 Restructuring expenses 2,327 0.04 791 0.01 Acquisition related costs 3,189 0.06 1,742 0.03 Net periodic pension benefit (other than service costs & curtailment) (9,944 ) (0.18 ) (11,363 ) (0.20 ) Acquisition deal costs — — (103,106 ) (1.81 ) Income tax effect of pre-tax adjustments (4,291 ) (0.08 ) 22,584 0.40 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — 0.02 — 0.05 Adjusted net earnings $ 117,311 $ 2.18 $ 106,368 $ 1.92 Diluted weighted average number of shares 54,384 56,939 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) (494 ) (1,679 ) Adjusted diluted weighted average number of shares 53,890 55,260 Nine Months Ended 3rd Qtr, 2022 3rd Qtr, 2021 $ Diluted per share $ Diluted per share Net earnings $ 303,372 $ 5.50 $ 385,814 $ 6.83 Amortization (1) 75,309 1.37 59,492 1.05 Restructuring expenses 8,231 0.15 2,596 0.05 Acquisition related costs 15,159 0.27 2,479 0.04 Acquisition deal costs — — (90,285 ) (1.60 ) Facility consolidation related expenses — — 993 0.02 Net periodic pension benefit (other than service costs & curtailment) (32,244 ) (0.58 ) (34,268 ) (0.61 ) Gain on sale of plant — — (763 ) (0.01 ) Charitable support to Ukraine 798 0.01 — — Discrete tax adjustments — — (18,900 ) (0.33 ) Income tax effect of pre-tax adjustments (16,611 ) (0.30 ) 14,640 0.26 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — 0.11 — 0.13 Adjusted net earnings $ 354,014 $ 6.53 $ 321,798 $ 5.83 Diluted weighted average number of shares 55,134 56,526 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) (932 ) (1,284 ) Adjusted diluted weighted average number of shares 54,202 55,242 (1) Includes amortization of deferred financing costs and convertible notes issuance costs. (2) Adjusted diluted weighted average number of shares was calculated based on excluding the dilutive effect of shares to be issued upon conversion of the notes to satisfy the amount in excess of the principal since the company's capped call offsets the dilutive impact of the shares underlying the convertible notes. The calculation of adjusted diluted earnings per share excludes the principal portion of the convertible notes as this will always be settled in cash. Three Months Ended Nine Months Ended 3rd Qtr, 2022 3rd Qtr, 2021 3rd Qtr, 2022 3rd Qtr, 2021 Net Cash Flows Provided By (Used In): Operating activities $ 83,991 $ 173,659 $ 173,449 $ 346,040 Investing activities (150,609 ) (388,457 ) (257,868 ) (412,679 ) Financing activities 54,856 73,092 72,594 54,361 Free Cash Flow Cash flow from operating activities $ 83,991 $ 173,659 $ 173,449 $ 346,040 Less: Capital expenditures, net of sale proceeds (18,781 ) (10,307 ) (50,914 ) (23,670 ) Free cash flow $ 65,210 $ 163,352 $ 122,535 $ 322,370 NON-GAAP FINANCIAL MEASURES The company supplements its consolidated financial statements presented on a GAAP basis with this non-GAAP financial information to provide investors with greater insight, increase transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP, and the financial results prepared in accordance with GAAP and reconciliations from these results should be carefully evaluated. In addition, the non-GAAP financial measures included in this press release do not have standard meanings and may vary from similarly titled non-GAAP financial measures used by other companies. The company believes that organic net sales growth, non-GAAP adjusted segment EBITDA, adjusted net earnings and adjusted diluted per share measures are useful as supplements to its GAAP results of operations to evaluate certain aspects of its operations and financial performance, and its management team primarily focuses on non-GAAP items in evaluating performance for business planning purposes. The company also believes that these measures assist it with comparing its performance between various reporting periods on a consistent basis, as these measures remove from operating results the impact of items that, in its opinion, do not reflect its core operating performance including, for example, intangibles amortization expense, impairment charges, restructuring expenses, and other charges which management considers to be outside core operating results. The company believes that free cash flow is an important measure of operating performance because it provides management and investors a measure of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, repaying debt and repurchasing our common stock. The company believes that its presentation of these non-GAAP financial measures is useful because it provides investors and securities analysts with the same information that Middleby uses internally for purposes of assessing its core operating performance. View source version on businesswire.com: https://www.businesswire.com/news/home/20221109005410/en/Contacts Darcy Bretz, Investor and Public Relations, (847) 429-7756 Bryan Mittelman, Chief Financial Officer, (847) 429-7715
Revenue of $993 million, a 21.5% increase year over year Diluted Earnings per share of $1.92 and adjusted net earnings per share of $2.18, an increase of 13.5% year over year Adjusted EBITDA of $212 million, a 23.3% increase year over year Profitability grew to an organic adjusted EBITDA margin of 22.6% Completed the acquisition of CP Packaging, expanding Middleby’s offerings in packaging innovation Completed the acquisition of Colussi Ermes, enhancing Middleby’s automated washing & food safety solutions
The Middleby Corporation (NASDAQ: MIDD), a leading worldwide manufacturer of equipment for the commercial foodservice, food processing, and residential kitchen industries, today reported net earnings for the third quarter of 2022. “We continue to execute on our strategic and operating initiatives, while realizing growth in sales and profitability. We reported record third quarter sales and EBITDA, with margins ahead of pre-covid levels despite significant continued inflationary effects impacting the quarter,” said Tim FitzGerald, CEO of The Middleby Corporation. 2022 Third Quarter Financial Results Net sales increased 21.5% in the third quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales increased 14.2% in the third quarter over the comparative prior year period, reflecting higher shipments as we realize benefits of investments to increase our production throughput. Organic net sales (a non-GAAP measure) increases were reported for all three segments due to improvements in market conditions and consumer demand in the third quarter of 2022. A reconciliation of reported net sales by segment is as follows: Commercial Foodservice Residential Kitchen Food Processing Total Company Reported Net Sales Growth 21.9 % 14.3 % 31.6 % 21.5 % Acquisitions 7.4 % 17.7 % 14.7 % 10.9 % Foreign Exchange Rates (2.5)% (5.7)% (4.8)% (3.6)% Organic Net Sales Growth (1) (2) 17.0 % 2.3 % 21.7 % 14.2 % (1) Organic net sales growth defined as total sales growth excluding impact of acquisitions and foreign exchange rates (2) Totals may be impacted by rounding Foreign exchange losses were approximately $8.6 million in the third quarter, which negatively impacted adjusted earnings per share by $0.12. For the nine months period, foreign exchange losses were approximately $18.2 million, which negatively impacted adjusted earnings per share by $0.25. Adjusted EBITDA (a non-GAAP measure) was $212.3 million, in the third quarter of 2022 due to the impact of higher sales volumes and profitability initiatives. A reconciliation of organic adjusted EBITDA (a non-GAAP measure) by segment is as follows: Commercial Foodservice Residential Kitchen Food Processing Total Company Adjusted EBITDA 26.7 % 15.8 % 22.2 % 21.4 % Acquisitions 0.1 % (4.9)% (1.5)% (1.1)% Foreign Exchange Rates — % (0.1)% (0.3)% (0.1)% Organic Adjusted EBITDA (1) (2) 26.5 % 20.6 % 23.9 % 22.6 % (1) Organic Adjusted EBITDA defined as Adjusted EBITDA excluding impact of acquisitions and foreign exchange rates. (2) Totals may be impacted by rounding Operating cash flows during the third quarter amounted to $84.0 million in comparison to $173.7 million in the prior year period. The total leverage ratio per our credit agreements was 3.1x. The trailing twelve month bank agreement pro-forma EBITDA was $871.7 million. Cash balances at the end of the quarter were $144.9 million. Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2022 fiscal third quarter amounted to $2.7 billion as compared to $2.3 billion at the end of fiscal 2021. Debt increased $130 million related to recent business acquisitions. Additionally, our borrowing availability at quarter end was approximately $2.1 billion. “The demand outlook for our products at both our commercial foodservice and food processing segments remains strong. We are engaged with customers on our latest innovations offering solutions to address labor, energy, food costs and speed. We have made significant investments in technology and automation throughout the pandemic positioning us better than ever to support the challenges facing our customers today.” “The residential housing market has become significantly more challenged with the impact of interest rate hikes and inflationary effects that has slowed consumer spend on residential kitchen equipment. While there is significant uncertainty as we move into the next year, our order backlog remains ahead of pre-covid levels. We are confident in our ability to maintain industry-leading profitability levels even in challenging market conditions. We expect investments made over the past several years in our award-winning showrooms, industry-leading culinary teams, and our newly developed designer services programs will increase market penetration of our exciting portfolio of industry leading brands and products,” concluded Mr. FitzGerald. Conference Call The company has scheduled a conference call to discuss the third quarter results at 11 a.m. Eastern/10 a.m. Central Time on November 9th. The conference call is accessible through the Investor Relations section of the company website at www.middleby.com. If website access is not available, attendees can join the conference by dialing (833) 630-1956 or (412) 317-1837 and ask to join the Middleby conference call. The conference call will be available for replay from the company’s website. Statements in this press release or otherwise attributable to the company regarding the company's business which are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company cautions investors that such statements are estimates of future performance and are highly dependent upon a variety of important factors that could cause actual results to differ materially from such statements. Such factors include variability in financing costs; quarterly variations in operating results; dependence on key customers; international exposure; foreign exchange and political risks affecting international sales; changing market conditions; the impact of competitive products and pricing; the timely development and market acceptance of the company's products; the availability and cost of raw materials; and other risks detailed herein and from time-to-time in the company's SEC filings. Any forward-looking statement speaks only as of the date hereof, and the company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. The Middleby Corporation is a global leader in the foodservice industry. The company develops and manufactures a broad line of solutions used in commercial foodservice, food processing, and residential kitchens. Supporting the company’s pursuit of the most sophisticated innovation, the state-of-the-art Middleby Innovation Kitchens showcases and demonstrates the most advanced Middleby solutions. In 2022 Middleby was named a World’s Best Employer by Forbes and is a proud philanthropic partner to organizations addressing food insecurity. THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in 000’s, Except Per Share Information) (Unaudited) Three Months Ended Nine Months Ended 3rd Qtr, 2022 3rd Qtr, 2021 3rd Qtr, 2022 3rd Qtr, 2021 Net sales $ 992,871 $ 817,545 $ 3,001,148 $ 2,384,376 Cost of sales 627,639 517,918 1,944,664 1,505,149 Gross profit 365,232 299,627 1,056,484 879,227 Selling, general and administrative expenses 201,200 175,354 596,757 496,022 Restructuring expenses 2,327 791 8,231 2,596 Merger termination fee — (110,000 ) — (110,000 ) Gain on sale of plant — — — (763 ) Income from operations 161,705 233,482 451,496 491,372 Interest expense and deferred financing amortization, net 24,067 13,192 62,563 43,481 Net periodic pension benefit (other than service costs & curtailment) (9,944 ) (11,363 ) (32,244 ) (34,268 ) Other expense (income), net 8,529 794 18,478 (1,366 ) Earnings before income taxes 139,053 230,859 402,699 483,525 Provision for income taxes 34,684 54,893 99,327 97,711 Net earnings $ 104,369 $ 175,966 $ 303,372 $ 385,814 Net earnings per share: Basic $ 1.94 $ 3.19 $ 5.60 $ 6.99 Diluted $ 1.92 $ 3.09 $ 5.50 $ 6.83 Weighted average number of shares Basic 53,867 55,232 54,190 55,225 Diluted 54,384 56,939 55,134 56,526 THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in 000’s) (Unaudited) Oct 1, 2022 Jan 1, 2022 ASSETS Cash and cash equivalents $ 144,918 $ 180,362 Accounts receivable, net 593,514 577,142 Inventories, net 1,062,634 837,418 Prepaid expenses and other 121,271 92,269 Prepaid taxes 28,201 19,894 Total current assets 1,950,538 1,707,085 Property, plant and equipment, net 423,947 380,980 Goodwill 2,287,420 2,243,469 Other intangibles, net 1,781,801 1,875,377 Long-term deferred tax assets 22,340 33,194 Other assets 205,815 143,493 Total assets $ 6,671,861 $ 6,383,598 LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term debt $ 44,664 $ 27,293 Accounts payable 261,169 304,740 Accrued expenses 631,945 582,855 Total current liabilities 937,778 914,888 Long-term debt 2,693,325 2,387,001 Long-term deferred tax liability 220,400 186,935 Accrued pension benefits 154,256 219,680 Other non-current liabilities 167,559 180,818 Stockholders' equity 2,498,543 2,494,276 Total liabilities and stockholders' equity $ 6,671,861 $ 6,383,598 THE MIDDLEBY CORPORATION NON-GAAP SEGMENT INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Commercial Foodservice Residential Kitchen Food Processing Total Company (1) Three Months Ended October 1, 2022 Net sales $ 623,662 $ 220,965 $ 148,244 $ 992,871 Segment Operating Income $ 143,678 $ 29,788 $ 26,982 $ 161,705 Operating Income % of net sales 23.0 % 13.5 % 18.2 % 16.3 % Depreciation 5,855 1,861 1,558 9,479 Amortization 14,283 1,289 4,311 19,883 Restructuring expenses 663 1,894 (230 ) 2,327 Acquisition related adjustments 1,836 — 303 3,189 Stock compensation — — — 15,761 Segment adjusted EBITDA $ 166,315 $ 34,832 $ 32,924 $ 212,344 Adjusted EBITDA % of net sales 26.7 % 15.8 % 22.2 % 21.4 % Three Months Ended October 2, 2021 Net sales $ 511,480 $ 193,395 $ 112,670 $ 817,545 Segment Operating Income $ 105,529 $ 31,322 $ 21,425 $ 233,482 Operating Income % of net sales 20.6 % 16.2 % 19.0 % 28.6 % Depreciation 5,793 3,608 1,353 10,876 Amortization 12,822 3,589 1,773 18,184 Restructuring expenses 473 278 40 791 Acquisition related adjustments 66 1,676 — 1,742 Acquisition deal costs — — — (103,106 ) Stock compensation — — — 10,197 Segment adjusted EBITDA $ 124,683 $ 40,473 $ 24,591 $ 172,166 Adjusted EBITDA % of net sales 24.4 % 20.9 % 21.8 % 21.1 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $21.7 million and $17.6 million for the three months ended October 1, 2022 and October 2, 2021, respectively. THE MIDDLEBY CORPORATION NON-GAAP SEGMENT INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Commercial Foodservice Residential Kitchen Food Processing Total Company (1) Nine Months Ended October 1, 2022 Net sales $ 1,776,994 $ 832,054 $ 392,100 $ 3,001,148 Segment Operating Income $ 390,740 $ 100,811 $ 65,642 $ 451,496 Operating Income % of net sales 22.0 % 12.1 % 16.7 % 15.0 % Depreciation 17,577 9,271 4,182 31,608 Amortization 41,644 20,448 7,844 69,936 Restructuring expenses 2,934 2,892 2,405 8,231 Acquisition related adjustments (1,256 ) 15,062 303 15,159 Charitable support to Ukraine — — — 798 Stock compensation — — — 42,641 Segment adjusted EBITDA $ 451,639 $ 148,484 $ 80,376 $ 619,869 Adjusted EBITDA % of net sales 25.4 % 17.8 % 20.5 % 20.7 % Nine Months Ended October 2, 2021 Net sales $ 1,501,413 $ 527,791 $ 355,172 $ 2,384,376 Segment Operating Income $ 311,789 $ 95,088 $ 68,048 $ 491,372 Operating Income % of net sales 20.8 % 18.0 % 19.2 % 20.6 % Depreciation 17,579 9,120 4,005 31,180 Amortization 42,272 7,145 5,450 54,867 Restructuring expenses 1,386 834 376 2,596 Facility consolidation related expenses 993 — — 993 Acquisition related adjustments 803 1,676 — 2,479 Stock compensation — — — 27,135 Gain on sale of plant (678 ) (85 ) (763 ) Acquisition deal costs — — — (90,285 ) Segment adjusted EBITDA $ 374,144 $ 113,778 $ 77,879 $ 519,574 Adjusted EBITDA % of net sales 24.9 % 21.6 % 21.9 % 21.8 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $60.6 million and $46.2 million for the nine months ended October 1, 2022 and October 2, 2021, respectively. THE MIDDLEBY CORPORATION NON-GAAP INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Three Months Ended 3rd Qtr, 2022 3rd Qtr, 2021 $ Diluted per share $ Diluted per share Net earnings $ 104,369 $ 1.92 $ 175,966 $ 3.09 Amortization (1) 21,661 0.40 19,754 0.35 Restructuring expenses 2,327 0.04 791 0.01 Acquisition related costs 3,189 0.06 1,742 0.03 Net periodic pension benefit (other than service costs & curtailment) (9,944 ) (0.18 ) (11,363 ) (0.20 ) Acquisition deal costs — — (103,106 ) (1.81 ) Income tax effect of pre-tax adjustments (4,291 ) (0.08 ) 22,584 0.40 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — 0.02 — 0.05 Adjusted net earnings $ 117,311 $ 2.18 $ 106,368 $ 1.92 Diluted weighted average number of shares 54,384 56,939 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) (494 ) (1,679 ) Adjusted diluted weighted average number of shares 53,890 55,260 Nine Months Ended 3rd Qtr, 2022 3rd Qtr, 2021 $ Diluted per share $ Diluted per share Net earnings $ 303,372 $ 5.50 $ 385,814 $ 6.83 Amortization (1) 75,309 1.37 59,492 1.05 Restructuring expenses 8,231 0.15 2,596 0.05 Acquisition related costs 15,159 0.27 2,479 0.04 Acquisition deal costs — — (90,285 ) (1.60 ) Facility consolidation related expenses — — 993 0.02 Net periodic pension benefit (other than service costs & curtailment) (32,244 ) (0.58 ) (34,268 ) (0.61 ) Gain on sale of plant — — (763 ) (0.01 ) Charitable support to Ukraine 798 0.01 — — Discrete tax adjustments — — (18,900 ) (0.33 ) Income tax effect of pre-tax adjustments (16,611 ) (0.30 ) 14,640 0.26 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — 0.11 — 0.13 Adjusted net earnings $ 354,014 $ 6.53 $ 321,798 $ 5.83 Diluted weighted average number of shares 55,134 56,526 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) (932 ) (1,284 ) Adjusted diluted weighted average number of shares 54,202 55,242 (1) Includes amortization of deferred financing costs and convertible notes issuance costs. (2) Adjusted diluted weighted average number of shares was calculated based on excluding the dilutive effect of shares to be issued upon conversion of the notes to satisfy the amount in excess of the principal since the company's capped call offsets the dilutive impact of the shares underlying the convertible notes. The calculation of adjusted diluted earnings per share excludes the principal portion of the convertible notes as this will always be settled in cash. Three Months Ended Nine Months Ended 3rd Qtr, 2022 3rd Qtr, 2021 3rd Qtr, 2022 3rd Qtr, 2021 Net Cash Flows Provided By (Used In): Operating activities $ 83,991 $ 173,659 $ 173,449 $ 346,040 Investing activities (150,609 ) (388,457 ) (257,868 ) (412,679 ) Financing activities 54,856 73,092 72,594 54,361 Free Cash Flow Cash flow from operating activities $ 83,991 $ 173,659 $ 173,449 $ 346,040 Less: Capital expenditures, net of sale proceeds (18,781 ) (10,307 ) (50,914 ) (23,670 ) Free cash flow $ 65,210 $ 163,352 $ 122,535 $ 322,370 NON-GAAP FINANCIAL MEASURES The company supplements its consolidated financial statements presented on a GAAP basis with this non-GAAP financial information to provide investors with greater insight, increase transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP, and the financial results prepared in accordance with GAAP and reconciliations from these results should be carefully evaluated. In addition, the non-GAAP financial measures included in this press release do not have standard meanings and may vary from similarly titled non-GAAP financial measures used by other companies. The company believes that organic net sales growth, non-GAAP adjusted segment EBITDA, adjusted net earnings and adjusted diluted per share measures are useful as supplements to its GAAP results of operations to evaluate certain aspects of its operations and financial performance, and its management team primarily focuses on non-GAAP items in evaluating performance for business planning purposes. The company also believes that these measures assist it with comparing its performance between various reporting periods on a consistent basis, as these measures remove from operating results the impact of items that, in its opinion, do not reflect its core operating performance including, for example, intangibles amortization expense, impairment charges, restructuring expenses, and other charges which management considers to be outside core operating results. The company believes that free cash flow is an important measure of operating performance because it provides management and investors a measure of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, repaying debt and repurchasing our common stock. The company believes that its presentation of these non-GAAP financial measures is useful because it provides investors and securities analysts with the same information that Middleby uses internally for purposes of assessing its core operating performance. View source version on businesswire.com: https://www.businesswire.com/news/home/20221109005410/en/
Darcy Bretz, Investor and Public Relations, (847) 429-7756 Bryan Mittelman, Chief Financial Officer, (847) 429-7715