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 08, 2023 at 07:00 AM EST Record Q3 Adjusted EBITDA of $224 million, an $11 million increase year over year Record LTM Adjusted EBITDA of $896 million, an $83 million over the prior year LTM Record operating cash flows of $219 million for the quarter and $532 million for the Q3 LTM Profitability grew to an organic adjusted EBITDA margin of 23.0% compared to 21.4% in the prior year Diluted Earnings per share of $2.01 and adjusted net earnings per share of $2.35 for the third quarter, an increase of 8% year over year Net leverage reduced to 2.75x Completed strategic acquisitions of Terry Water Solutions and Trade-Wind 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 2023. “We achieved solid results with growth in earnings, profits margins and cash flows. We are navigating the expected impact of inventory de-stocking at our Commercial Foodservice and Residential Kitchen segments, along with increasing headwinds from rising interest rate affecting near-term demand. Despite the challenging market conditions, we are successfully realizing the benefits from our long-term profitability goals. We continue to make significant progress executing on our long-term growth initiatives, focused on the launch of industry leading product innovations and establishment of differentiated go-to-market sales capabilities that we are confident will provide us with a growing competitive advantage,” said Tim FitzGerald, CEO of The Middleby Corporation. 2023 Third Quarter Financial Results Net sales decreased 1.2% in the third quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales decreased 4.4% in the third quarter over the comparative prior year period. Organic net sales (a non-GAAP measure) increases were reported for the Commercial Foodservice and Food Processing segments in the third quarter of 2023. A reconciliation of reported net sales by segment is as follows: Commercial Foodservice Residential Kitchen Food Processing Total Company Reported Net Sales Growth 2.3 % (18.6 )% 9.5 % (1.2 )% Acquisitions 1.3 % 0.4 % 6.0 % 1.8 % Foreign Exchange Rates 0.9 % 2.1 % 2.2 % 1.3 % Organic Net Sales Growth (1) (2) 0.2 % (21.0 )% 1.2 % (4.4 )% (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 Adjusted EBITDA (a non-GAAP measure) was $223.7 million in the third quarter compared to $212.3 million in the prior year. 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 28.4 % 10.8 % 25.8 % 22.8 % Acquisitions (0.2 )% 0.4 % (0.7 )% (0.1 )% Foreign Exchange Rates (0.1 )% 0.2 % — % (0.1 )% Organic Adjusted EBITDA (1) (2) 28.7 % 10.2 % 26.6 % 23.0 % (1) Organic Adjusted EBITDA defined as Adjusted EBITDA excluding impact of acquisitions and foreign exchange rates. (2) Totals may be impacted by rounding Foreign exchange losses were approximately $1.2 million in the third quarter, which negatively impacted adjusted earnings per share by $0.02. Operating cash flows during the third quarter amounted to $219.2 million in comparison to $84.0 million in the prior year period. The total leverage ratio per our credit agreements was 2.75x. The trailing twelve month bank agreement pro-forma EBITDA was $909.4 million. Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2023 fiscal third quarter amounted to $2.4 billion as compared to $2.6 billion at the end of fiscal 2022. Our borrowing availability at the end of the third quarter was approximately $2.5 billion. “We continue to further strengthen our three industry-leading foodservice platforms through organic growth initiatives and strategic acquisitions. We are excited to have completed this quarter the acquisitions of Trade-Wind and Terry Water Solutions, further extending our complementary product offerings, and providing synergistic growth opportunities for our Commercial Foodservice and Residential Kitchen platforms.” “Trade-Wind has experienced rapid growth as a technology leader in residential ventilation recognized for their spectacular designs. The Trade-Wind ventilation line-up perfectly complements our indoor and outdoor residential cooking brands, including Viking, Lynx, LaCornue and Aga and provides for an exciting combined cooking and ventilation offering in demand by our customers.” Mr. FitzGerald continued, “Terry products allows us to incorporate water treatment solutions to a broad array of products across our Commercial Foodservice equipment portfolio including ice machines, beverage dispense equipment, espresso machines and coffee makers, combi-ovens and steam cooking equipment. The combination of the Terry products across the Middleby family of products allows for an enhanced level of equipment performance with reduced scale build-up, lower maintenance costs, and a greater consistency and quality of food, ice and beverage. Utilizing a patented and environmentally friendly formulation of Citryne®, Terry products are food grade, biodegradable and treat water without the use of hazardous chemicals. Terry’s water filtration solutions last 20% longer than other competitive solutions, also providing an operating cost savings to our customers,” 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 8th. 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 for international access, 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, state-of-the-art Middleby Innovation Kitchens and Residential Showrooms showcase and demonstrate 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, 2023 3rd Qtr, 2022 3rd Qtr, 2023 3rd Qtr, 2022 Net sales $ 980,651 $ 992,871 $ 3,028,029 $ 3,001,148 Cost of sales 605,329 627,639 1,880,736 1,944,664 Gross profit 375,322 365,232 1,147,293 1,056,484 Selling, general and administrative expenses 196,433 201,200 615,361 596,757 Restructuring expenses 4,448 2,327 11,698 8,231 Income from operations 174,441 161,705 520,234 451,496 Interest expense and deferred financing amortization, net 31,080 24,067 92,071 62,563 Net periodic pension benefit (other than service costs & curtailment) (2,103 ) (9,944 ) (6,929 ) (32,244 ) Other expense, net 1,072 8,529 2,642 18,478 Earnings before income taxes 144,392 139,053 432,450 402,699 Provision for income taxes 35,742 34,684 107,861 99,327 Net earnings $ 108,650 $ 104,369 $ 324,589 $ 303,372 Net earnings per share: Basic $ 2.03 $ 1.94 $ 6.06 $ 5.60 Diluted $ 2.01 $ 1.92 $ 5.99 $ 5.50 Weighted average number of shares Basic 53,588 53,867 53,569 54,190 Diluted 54,157 54,384 54,192 55,134 THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in 000’s) (Unaudited) Sep 30, 2023 Dec 31, 2022 ASSETS Cash and cash equivalents $ 167,189 $ 162,001 Accounts receivable, net 633,169 631,134 Inventories, net 1,015,047 1,077,729 Prepaid expenses and other 131,287 125,640 Prepaid taxes 14,165 9,492 Total current assets 1,960,857 2,005,996 Property, plant and equipment, net 498,871 443,528 Goodwill 2,452,419 2,411,834 Other intangibles, net 1,775,546 1,794,232 Long-term deferred tax assets 8,877 6,738 Other assets 226,038 212,538 Total assets $ 6,922,608 $ 6,874,866 LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term debt $ 44,330 $ 45,583 Accounts payable 224,375 271,374 Accrued expenses 595,542 671,327 Total current liabilities 864,247 988,284 Long-term debt 2,535,896 2,676,741 Long-term deferred tax liability 214,021 220,204 Accrued pension benefits 5,420 14,948 Other non-current liabilities 207,809 176,942 Stockholders' equity 3,095,215 2,797,747 Total liabilities and stockholders' equity $ 6,922,608 $ 6,874,866 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 September 30, 2023 Net sales $ 634,009 $ 179,975 $ 166,667 $ 980,651 Segment Operating Income $ 158,582 $ 10,915 $ 37,472 $ 174,441 Operating Income % of net sales 25.0 % 6.1 % 22.5 % 17.8 % Depreciation 6,957 3,304 1,924 12,588 Amortization 13,959 2,280 2,677 18,916 Restructuring expenses 636 2,873 939 4,448 Acquisition related adjustments — 44 (51 ) (7 ) Charitable support — — — 118 Stock compensation — — — 13,175 Segment adjusted EBITDA (2) $ 180,134 $ 19,416 $ 42,961 $ 223,679 Adjusted EBITDA % of net sales 28.4 % 10.8 % 25.8 % 22.8 % Three Months Ended October 1, 2022 Net sales $ 619,557 $ 220,965 $ 152,349 $ 992,871 Segment Operating Income $ 142,999 $ 29,788 $ 27,661 $ 161,705 Operating Income % of net sales 23.1 % 13.5 % 18.2 % 16.3 % Depreciation 5,822 1,861 1,591 9,479 Amortization 14,124 1,289 4,470 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 $ 165,444 $ 34,832 $ 33,795 $ 212,344 Adjusted EBITDA % of net sales 26.7 % 15.8 % 22.2 % 21.4 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $18.8 million and $21.7 million for the three months ended September 30, 2023 and October 1, 2022, respectively. (2) Foreign exchange rates favorably impacted Segment Adjusted EBITDA by approximately $2.5 million for the three months ended September 30, 2023. 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 September 30, 2023 Net sales $ 1,893,607 $ 605,504 $ 528,918 $ 3,028,029 Segment Operating Income $ 452,113 $ 51,197 $ 111,483 $ 520,234 Operating Income % of net sales 23.9 % 8.5 % 21.1 % 17.2 % Depreciation 20,134 10,070 5,910 37,088 Amortization 42,905 6,768 6,946 56,619 Restructuring expenses 2,658 8,184 856 11,698 Acquisition related adjustments 797 44 — 841 Charitable support — — — 607 Stock compensation — — — 35,305 Segment adjusted EBITDA (2) $ 518,607 $ 76,263 $ 125,195 $ 662,392 Adjusted EBITDA % of net sales 27.4 % 12.6 % 23.7 % 21.9 % Nine Months Ended October 1, 2022 Net sales $ 1,765,849 $ 832,054 $ 403,245 $ 3,001,148 Segment Operating Income $ 390,218 $ 100,811 $ 66,164 $ 451,496 Operating Income % of net sales 22.1 % 12.1 % 16.4 % 15.0 % Depreciation 17,478 9,271 4,281 31,608 Amortization 41,169 20,448 8,319 69,936 Restructuring expenses 2,934 2,892 2,405 8,231 Acquisition related adjustments (1,256 ) 15,062 303 15,159 Charitable support — — — 798 Stock compensation — — — 42,641 Segment adjusted EBITDA $ 450,543 $ 148,484 $ 81,472 $ 619,869 Adjusted EBITDA % of net sales 25.5 % 17.8 % 20.2 % 20.7 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $57.7 million and $60.6 million for the nine months ended September 30, 2023 and October 1, 2022, respectively. (2) Foreign exchange rates negatively impacted Segment Adjusted EBITDA by approximately $0.4 million for the nine months ended September 30, 2023. THE MIDDLEBY CORPORATION NON-GAAP INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Three Months Ended 3rd Qtr, 2023 3rd Qtr, 2022 $ Diluted per share $ Diluted per share Net earnings $ 108,650 $ 2.01 $ 104,369 $ 1.92 Amortization(1) 20,693 0.38 21,661 0.40 Restructuring expenses 4,448 0.08 2,327 0.04 Acquisition related adjustments (7 ) — 3,189 0.06 Net periodic pension benefit (other than service costs & curtailment) (2,103 ) (0.04 ) (9,944 ) (0.18 ) Charitable support 118 — — — Income tax effect of pre-tax adjustments (5,741 ) (0.11 ) (4,291 ) (0.08 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings(2) — 0.03 — 0.02 Adjusted net earnings $ 126,058 $ 2.35 $ 117,311 $ 2.18 Diluted weighted average number of shares 54,157 54,384 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings(2) (550 ) (494 ) Adjusted diluted weighted average number of shares 53,607 53,890 Nine Months Ended 3rd Qtr, 2023 3rd Qtr, 2022 $ Diluted per share $ Diluted per share Net earnings $ 324,589 $ 5.99 $ 303,372 $ 5.50 Amortization(1) 61,970 1.14 75,309 1.37 Restructuring expenses 11,698 0.22 8,231 0.15 Acquisition related adjustments 841 0.02 15,159 0.27 Net periodic pension benefit (other than service costs & curtailment) (6,929 ) (0.13 ) (32,244 ) (0.58 ) Charitable support 607 0.01 798 0.01 Income tax effect of pre-tax adjustments (16,979 ) (0.31 ) (16,611 ) (0.30 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings(2) — 0.07 — 0.11 Adjusted net earnings $ 375,797 $ 7.01 $ 354,014 $ 6.53 Diluted weighted average number of shares 54,192 55,134 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings(2) (614 ) (932 ) Adjusted diluted weighted average number of shares 53,578 54,202 (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, 2023 3rd Qtr, 2022 3rd Qtr, 2023 3rd Qtr, 2022 Net Cash Flows Provided By (Used In): Operating activities $ 219,153 $ 83,991 $ 373,103 $ 173,449 Investing activities (53,958 ) (150,609 ) (139,224 ) (257,868 ) Financing activities (150,533 ) 54,856 (225,768 ) 72,594 Free Cash Flow �� Cash flow from operating activities $ 219,153 $ 83,991 $ 373,103 $ 173,449 Less: Capital expenditures (21,330 ) (18,781 ) (69,645 ) (50,914 ) Free cash flow $ 197,823 $ 65,210 $ 303,458 $ 122,535 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/20231108410534/en/Contacts John Joyner, VP of Investor Relations, jjoyner@middleby.com 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 08, 2023 at 07:00 AM EST Record Q3 Adjusted EBITDA of $224 million, an $11 million increase year over year Record LTM Adjusted EBITDA of $896 million, an $83 million over the prior year LTM Record operating cash flows of $219 million for the quarter and $532 million for the Q3 LTM Profitability grew to an organic adjusted EBITDA margin of 23.0% compared to 21.4% in the prior year Diluted Earnings per share of $2.01 and adjusted net earnings per share of $2.35 for the third quarter, an increase of 8% year over year Net leverage reduced to 2.75x Completed strategic acquisitions of Terry Water Solutions and Trade-Wind 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 2023. “We achieved solid results with growth in earnings, profits margins and cash flows. We are navigating the expected impact of inventory de-stocking at our Commercial Foodservice and Residential Kitchen segments, along with increasing headwinds from rising interest rate affecting near-term demand. Despite the challenging market conditions, we are successfully realizing the benefits from our long-term profitability goals. We continue to make significant progress executing on our long-term growth initiatives, focused on the launch of industry leading product innovations and establishment of differentiated go-to-market sales capabilities that we are confident will provide us with a growing competitive advantage,” said Tim FitzGerald, CEO of The Middleby Corporation. 2023 Third Quarter Financial Results Net sales decreased 1.2% in the third quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales decreased 4.4% in the third quarter over the comparative prior year period. Organic net sales (a non-GAAP measure) increases were reported for the Commercial Foodservice and Food Processing segments in the third quarter of 2023. A reconciliation of reported net sales by segment is as follows: Commercial Foodservice Residential Kitchen Food Processing Total Company Reported Net Sales Growth 2.3 % (18.6 )% 9.5 % (1.2 )% Acquisitions 1.3 % 0.4 % 6.0 % 1.8 % Foreign Exchange Rates 0.9 % 2.1 % 2.2 % 1.3 % Organic Net Sales Growth (1) (2) 0.2 % (21.0 )% 1.2 % (4.4 )% (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 Adjusted EBITDA (a non-GAAP measure) was $223.7 million in the third quarter compared to $212.3 million in the prior year. 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 28.4 % 10.8 % 25.8 % 22.8 % Acquisitions (0.2 )% 0.4 % (0.7 )% (0.1 )% Foreign Exchange Rates (0.1 )% 0.2 % — % (0.1 )% Organic Adjusted EBITDA (1) (2) 28.7 % 10.2 % 26.6 % 23.0 % (1) Organic Adjusted EBITDA defined as Adjusted EBITDA excluding impact of acquisitions and foreign exchange rates. (2) Totals may be impacted by rounding Foreign exchange losses were approximately $1.2 million in the third quarter, which negatively impacted adjusted earnings per share by $0.02. Operating cash flows during the third quarter amounted to $219.2 million in comparison to $84.0 million in the prior year period. The total leverage ratio per our credit agreements was 2.75x. The trailing twelve month bank agreement pro-forma EBITDA was $909.4 million. Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2023 fiscal third quarter amounted to $2.4 billion as compared to $2.6 billion at the end of fiscal 2022. Our borrowing availability at the end of the third quarter was approximately $2.5 billion. “We continue to further strengthen our three industry-leading foodservice platforms through organic growth initiatives and strategic acquisitions. We are excited to have completed this quarter the acquisitions of Trade-Wind and Terry Water Solutions, further extending our complementary product offerings, and providing synergistic growth opportunities for our Commercial Foodservice and Residential Kitchen platforms.” “Trade-Wind has experienced rapid growth as a technology leader in residential ventilation recognized for their spectacular designs. The Trade-Wind ventilation line-up perfectly complements our indoor and outdoor residential cooking brands, including Viking, Lynx, LaCornue and Aga and provides for an exciting combined cooking and ventilation offering in demand by our customers.” Mr. FitzGerald continued, “Terry products allows us to incorporate water treatment solutions to a broad array of products across our Commercial Foodservice equipment portfolio including ice machines, beverage dispense equipment, espresso machines and coffee makers, combi-ovens and steam cooking equipment. The combination of the Terry products across the Middleby family of products allows for an enhanced level of equipment performance with reduced scale build-up, lower maintenance costs, and a greater consistency and quality of food, ice and beverage. Utilizing a patented and environmentally friendly formulation of Citryne®, Terry products are food grade, biodegradable and treat water without the use of hazardous chemicals. Terry’s water filtration solutions last 20% longer than other competitive solutions, also providing an operating cost savings to our customers,” 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 8th. 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 for international access, 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, state-of-the-art Middleby Innovation Kitchens and Residential Showrooms showcase and demonstrate 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, 2023 3rd Qtr, 2022 3rd Qtr, 2023 3rd Qtr, 2022 Net sales $ 980,651 $ 992,871 $ 3,028,029 $ 3,001,148 Cost of sales 605,329 627,639 1,880,736 1,944,664 Gross profit 375,322 365,232 1,147,293 1,056,484 Selling, general and administrative expenses 196,433 201,200 615,361 596,757 Restructuring expenses 4,448 2,327 11,698 8,231 Income from operations 174,441 161,705 520,234 451,496 Interest expense and deferred financing amortization, net 31,080 24,067 92,071 62,563 Net periodic pension benefit (other than service costs & curtailment) (2,103 ) (9,944 ) (6,929 ) (32,244 ) Other expense, net 1,072 8,529 2,642 18,478 Earnings before income taxes 144,392 139,053 432,450 402,699 Provision for income taxes 35,742 34,684 107,861 99,327 Net earnings $ 108,650 $ 104,369 $ 324,589 $ 303,372 Net earnings per share: Basic $ 2.03 $ 1.94 $ 6.06 $ 5.60 Diluted $ 2.01 $ 1.92 $ 5.99 $ 5.50 Weighted average number of shares Basic 53,588 53,867 53,569 54,190 Diluted 54,157 54,384 54,192 55,134 THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in 000’s) (Unaudited) Sep 30, 2023 Dec 31, 2022 ASSETS Cash and cash equivalents $ 167,189 $ 162,001 Accounts receivable, net 633,169 631,134 Inventories, net 1,015,047 1,077,729 Prepaid expenses and other 131,287 125,640 Prepaid taxes 14,165 9,492 Total current assets 1,960,857 2,005,996 Property, plant and equipment, net 498,871 443,528 Goodwill 2,452,419 2,411,834 Other intangibles, net 1,775,546 1,794,232 Long-term deferred tax assets 8,877 6,738 Other assets 226,038 212,538 Total assets $ 6,922,608 $ 6,874,866 LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term debt $ 44,330 $ 45,583 Accounts payable 224,375 271,374 Accrued expenses 595,542 671,327 Total current liabilities 864,247 988,284 Long-term debt 2,535,896 2,676,741 Long-term deferred tax liability 214,021 220,204 Accrued pension benefits 5,420 14,948 Other non-current liabilities 207,809 176,942 Stockholders' equity 3,095,215 2,797,747 Total liabilities and stockholders' equity $ 6,922,608 $ 6,874,866 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 September 30, 2023 Net sales $ 634,009 $ 179,975 $ 166,667 $ 980,651 Segment Operating Income $ 158,582 $ 10,915 $ 37,472 $ 174,441 Operating Income % of net sales 25.0 % 6.1 % 22.5 % 17.8 % Depreciation 6,957 3,304 1,924 12,588 Amortization 13,959 2,280 2,677 18,916 Restructuring expenses 636 2,873 939 4,448 Acquisition related adjustments — 44 (51 ) (7 ) Charitable support — — — 118 Stock compensation — — — 13,175 Segment adjusted EBITDA (2) $ 180,134 $ 19,416 $ 42,961 $ 223,679 Adjusted EBITDA % of net sales 28.4 % 10.8 % 25.8 % 22.8 % Three Months Ended October 1, 2022 Net sales $ 619,557 $ 220,965 $ 152,349 $ 992,871 Segment Operating Income $ 142,999 $ 29,788 $ 27,661 $ 161,705 Operating Income % of net sales 23.1 % 13.5 % 18.2 % 16.3 % Depreciation 5,822 1,861 1,591 9,479 Amortization 14,124 1,289 4,470 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 $ 165,444 $ 34,832 $ 33,795 $ 212,344 Adjusted EBITDA % of net sales 26.7 % 15.8 % 22.2 % 21.4 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $18.8 million and $21.7 million for the three months ended September 30, 2023 and October 1, 2022, respectively. (2) Foreign exchange rates favorably impacted Segment Adjusted EBITDA by approximately $2.5 million for the three months ended September 30, 2023. 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 September 30, 2023 Net sales $ 1,893,607 $ 605,504 $ 528,918 $ 3,028,029 Segment Operating Income $ 452,113 $ 51,197 $ 111,483 $ 520,234 Operating Income % of net sales 23.9 % 8.5 % 21.1 % 17.2 % Depreciation 20,134 10,070 5,910 37,088 Amortization 42,905 6,768 6,946 56,619 Restructuring expenses 2,658 8,184 856 11,698 Acquisition related adjustments 797 44 — 841 Charitable support — — — 607 Stock compensation — — — 35,305 Segment adjusted EBITDA (2) $ 518,607 $ 76,263 $ 125,195 $ 662,392 Adjusted EBITDA % of net sales 27.4 % 12.6 % 23.7 % 21.9 % Nine Months Ended October 1, 2022 Net sales $ 1,765,849 $ 832,054 $ 403,245 $ 3,001,148 Segment Operating Income $ 390,218 $ 100,811 $ 66,164 $ 451,496 Operating Income % of net sales 22.1 % 12.1 % 16.4 % 15.0 % Depreciation 17,478 9,271 4,281 31,608 Amortization 41,169 20,448 8,319 69,936 Restructuring expenses 2,934 2,892 2,405 8,231 Acquisition related adjustments (1,256 ) 15,062 303 15,159 Charitable support — — — 798 Stock compensation — — — 42,641 Segment adjusted EBITDA $ 450,543 $ 148,484 $ 81,472 $ 619,869 Adjusted EBITDA % of net sales 25.5 % 17.8 % 20.2 % 20.7 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $57.7 million and $60.6 million for the nine months ended September 30, 2023 and October 1, 2022, respectively. (2) Foreign exchange rates negatively impacted Segment Adjusted EBITDA by approximately $0.4 million for the nine months ended September 30, 2023. THE MIDDLEBY CORPORATION NON-GAAP INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Three Months Ended 3rd Qtr, 2023 3rd Qtr, 2022 $ Diluted per share $ Diluted per share Net earnings $ 108,650 $ 2.01 $ 104,369 $ 1.92 Amortization(1) 20,693 0.38 21,661 0.40 Restructuring expenses 4,448 0.08 2,327 0.04 Acquisition related adjustments (7 ) — 3,189 0.06 Net periodic pension benefit (other than service costs & curtailment) (2,103 ) (0.04 ) (9,944 ) (0.18 ) Charitable support 118 — — — Income tax effect of pre-tax adjustments (5,741 ) (0.11 ) (4,291 ) (0.08 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings(2) — 0.03 — 0.02 Adjusted net earnings $ 126,058 $ 2.35 $ 117,311 $ 2.18 Diluted weighted average number of shares 54,157 54,384 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings(2) (550 ) (494 ) Adjusted diluted weighted average number of shares 53,607 53,890 Nine Months Ended 3rd Qtr, 2023 3rd Qtr, 2022 $ Diluted per share $ Diluted per share Net earnings $ 324,589 $ 5.99 $ 303,372 $ 5.50 Amortization(1) 61,970 1.14 75,309 1.37 Restructuring expenses 11,698 0.22 8,231 0.15 Acquisition related adjustments 841 0.02 15,159 0.27 Net periodic pension benefit (other than service costs & curtailment) (6,929 ) (0.13 ) (32,244 ) (0.58 ) Charitable support 607 0.01 798 0.01 Income tax effect of pre-tax adjustments (16,979 ) (0.31 ) (16,611 ) (0.30 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings(2) — 0.07 — 0.11 Adjusted net earnings $ 375,797 $ 7.01 $ 354,014 $ 6.53 Diluted weighted average number of shares 54,192 55,134 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings(2) (614 ) (932 ) Adjusted diluted weighted average number of shares 53,578 54,202 (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, 2023 3rd Qtr, 2022 3rd Qtr, 2023 3rd Qtr, 2022 Net Cash Flows Provided By (Used In): Operating activities $ 219,153 $ 83,991 $ 373,103 $ 173,449 Investing activities (53,958 ) (150,609 ) (139,224 ) (257,868 ) Financing activities (150,533 ) 54,856 (225,768 ) 72,594 Free Cash Flow �� Cash flow from operating activities $ 219,153 $ 83,991 $ 373,103 $ 173,449 Less: Capital expenditures (21,330 ) (18,781 ) (69,645 ) (50,914 ) Free cash flow $ 197,823 $ 65,210 $ 303,458 $ 122,535 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/20231108410534/en/Contacts John Joyner, VP of Investor Relations, jjoyner@middleby.com
Record Q3 Adjusted EBITDA of $224 million, an $11 million increase year over year Record LTM Adjusted EBITDA of $896 million, an $83 million over the prior year LTM Record operating cash flows of $219 million for the quarter and $532 million for the Q3 LTM Profitability grew to an organic adjusted EBITDA margin of 23.0% compared to 21.4% in the prior year Diluted Earnings per share of $2.01 and adjusted net earnings per share of $2.35 for the third quarter, an increase of 8% year over year Net leverage reduced to 2.75x Completed strategic acquisitions of Terry Water Solutions and Trade-Wind
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 2023. “We achieved solid results with growth in earnings, profits margins and cash flows. We are navigating the expected impact of inventory de-stocking at our Commercial Foodservice and Residential Kitchen segments, along with increasing headwinds from rising interest rate affecting near-term demand. Despite the challenging market conditions, we are successfully realizing the benefits from our long-term profitability goals. We continue to make significant progress executing on our long-term growth initiatives, focused on the launch of industry leading product innovations and establishment of differentiated go-to-market sales capabilities that we are confident will provide us with a growing competitive advantage,” said Tim FitzGerald, CEO of The Middleby Corporation. 2023 Third Quarter Financial Results Net sales decreased 1.2% in the third quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales decreased 4.4% in the third quarter over the comparative prior year period. Organic net sales (a non-GAAP measure) increases were reported for the Commercial Foodservice and Food Processing segments in the third quarter of 2023. A reconciliation of reported net sales by segment is as follows: Commercial Foodservice Residential Kitchen Food Processing Total Company Reported Net Sales Growth 2.3 % (18.6 )% 9.5 % (1.2 )% Acquisitions 1.3 % 0.4 % 6.0 % 1.8 % Foreign Exchange Rates 0.9 % 2.1 % 2.2 % 1.3 % Organic Net Sales Growth (1) (2) 0.2 % (21.0 )% 1.2 % (4.4 )% (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 Adjusted EBITDA (a non-GAAP measure) was $223.7 million in the third quarter compared to $212.3 million in the prior year. 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 28.4 % 10.8 % 25.8 % 22.8 % Acquisitions (0.2 )% 0.4 % (0.7 )% (0.1 )% Foreign Exchange Rates (0.1 )% 0.2 % — % (0.1 )% Organic Adjusted EBITDA (1) (2) 28.7 % 10.2 % 26.6 % 23.0 % (1) Organic Adjusted EBITDA defined as Adjusted EBITDA excluding impact of acquisitions and foreign exchange rates. (2) Totals may be impacted by rounding Foreign exchange losses were approximately $1.2 million in the third quarter, which negatively impacted adjusted earnings per share by $0.02. Operating cash flows during the third quarter amounted to $219.2 million in comparison to $84.0 million in the prior year period. The total leverage ratio per our credit agreements was 2.75x. The trailing twelve month bank agreement pro-forma EBITDA was $909.4 million. Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2023 fiscal third quarter amounted to $2.4 billion as compared to $2.6 billion at the end of fiscal 2022. Our borrowing availability at the end of the third quarter was approximately $2.5 billion. “We continue to further strengthen our three industry-leading foodservice platforms through organic growth initiatives and strategic acquisitions. We are excited to have completed this quarter the acquisitions of Trade-Wind and Terry Water Solutions, further extending our complementary product offerings, and providing synergistic growth opportunities for our Commercial Foodservice and Residential Kitchen platforms.” “Trade-Wind has experienced rapid growth as a technology leader in residential ventilation recognized for their spectacular designs. The Trade-Wind ventilation line-up perfectly complements our indoor and outdoor residential cooking brands, including Viking, Lynx, LaCornue and Aga and provides for an exciting combined cooking and ventilation offering in demand by our customers.” Mr. FitzGerald continued, “Terry products allows us to incorporate water treatment solutions to a broad array of products across our Commercial Foodservice equipment portfolio including ice machines, beverage dispense equipment, espresso machines and coffee makers, combi-ovens and steam cooking equipment. The combination of the Terry products across the Middleby family of products allows for an enhanced level of equipment performance with reduced scale build-up, lower maintenance costs, and a greater consistency and quality of food, ice and beverage. Utilizing a patented and environmentally friendly formulation of Citryne®, Terry products are food grade, biodegradable and treat water without the use of hazardous chemicals. Terry’s water filtration solutions last 20% longer than other competitive solutions, also providing an operating cost savings to our customers,” 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 8th. 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 for international access, 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, state-of-the-art Middleby Innovation Kitchens and Residential Showrooms showcase and demonstrate 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, 2023 3rd Qtr, 2022 3rd Qtr, 2023 3rd Qtr, 2022 Net sales $ 980,651 $ 992,871 $ 3,028,029 $ 3,001,148 Cost of sales 605,329 627,639 1,880,736 1,944,664 Gross profit 375,322 365,232 1,147,293 1,056,484 Selling, general and administrative expenses 196,433 201,200 615,361 596,757 Restructuring expenses 4,448 2,327 11,698 8,231 Income from operations 174,441 161,705 520,234 451,496 Interest expense and deferred financing amortization, net 31,080 24,067 92,071 62,563 Net periodic pension benefit (other than service costs & curtailment) (2,103 ) (9,944 ) (6,929 ) (32,244 ) Other expense, net 1,072 8,529 2,642 18,478 Earnings before income taxes 144,392 139,053 432,450 402,699 Provision for income taxes 35,742 34,684 107,861 99,327 Net earnings $ 108,650 $ 104,369 $ 324,589 $ 303,372 Net earnings per share: Basic $ 2.03 $ 1.94 $ 6.06 $ 5.60 Diluted $ 2.01 $ 1.92 $ 5.99 $ 5.50 Weighted average number of shares Basic 53,588 53,867 53,569 54,190 Diluted 54,157 54,384 54,192 55,134 THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in 000’s) (Unaudited) Sep 30, 2023 Dec 31, 2022 ASSETS Cash and cash equivalents $ 167,189 $ 162,001 Accounts receivable, net 633,169 631,134 Inventories, net 1,015,047 1,077,729 Prepaid expenses and other 131,287 125,640 Prepaid taxes 14,165 9,492 Total current assets 1,960,857 2,005,996 Property, plant and equipment, net 498,871 443,528 Goodwill 2,452,419 2,411,834 Other intangibles, net 1,775,546 1,794,232 Long-term deferred tax assets 8,877 6,738 Other assets 226,038 212,538 Total assets $ 6,922,608 $ 6,874,866 LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term debt $ 44,330 $ 45,583 Accounts payable 224,375 271,374 Accrued expenses 595,542 671,327 Total current liabilities 864,247 988,284 Long-term debt 2,535,896 2,676,741 Long-term deferred tax liability 214,021 220,204 Accrued pension benefits 5,420 14,948 Other non-current liabilities 207,809 176,942 Stockholders' equity 3,095,215 2,797,747 Total liabilities and stockholders' equity $ 6,922,608 $ 6,874,866 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 September 30, 2023 Net sales $ 634,009 $ 179,975 $ 166,667 $ 980,651 Segment Operating Income $ 158,582 $ 10,915 $ 37,472 $ 174,441 Operating Income % of net sales 25.0 % 6.1 % 22.5 % 17.8 % Depreciation 6,957 3,304 1,924 12,588 Amortization 13,959 2,280 2,677 18,916 Restructuring expenses 636 2,873 939 4,448 Acquisition related adjustments — 44 (51 ) (7 ) Charitable support — — — 118 Stock compensation — — — 13,175 Segment adjusted EBITDA (2) $ 180,134 $ 19,416 $ 42,961 $ 223,679 Adjusted EBITDA % of net sales 28.4 % 10.8 % 25.8 % 22.8 % Three Months Ended October 1, 2022 Net sales $ 619,557 $ 220,965 $ 152,349 $ 992,871 Segment Operating Income $ 142,999 $ 29,788 $ 27,661 $ 161,705 Operating Income % of net sales 23.1 % 13.5 % 18.2 % 16.3 % Depreciation 5,822 1,861 1,591 9,479 Amortization 14,124 1,289 4,470 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 $ 165,444 $ 34,832 $ 33,795 $ 212,344 Adjusted EBITDA % of net sales 26.7 % 15.8 % 22.2 % 21.4 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $18.8 million and $21.7 million for the three months ended September 30, 2023 and October 1, 2022, respectively. (2) Foreign exchange rates favorably impacted Segment Adjusted EBITDA by approximately $2.5 million for the three months ended September 30, 2023. 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 September 30, 2023 Net sales $ 1,893,607 $ 605,504 $ 528,918 $ 3,028,029 Segment Operating Income $ 452,113 $ 51,197 $ 111,483 $ 520,234 Operating Income % of net sales 23.9 % 8.5 % 21.1 % 17.2 % Depreciation 20,134 10,070 5,910 37,088 Amortization 42,905 6,768 6,946 56,619 Restructuring expenses 2,658 8,184 856 11,698 Acquisition related adjustments 797 44 — 841 Charitable support — — — 607 Stock compensation — — — 35,305 Segment adjusted EBITDA (2) $ 518,607 $ 76,263 $ 125,195 $ 662,392 Adjusted EBITDA % of net sales 27.4 % 12.6 % 23.7 % 21.9 % Nine Months Ended October 1, 2022 Net sales $ 1,765,849 $ 832,054 $ 403,245 $ 3,001,148 Segment Operating Income $ 390,218 $ 100,811 $ 66,164 $ 451,496 Operating Income % of net sales 22.1 % 12.1 % 16.4 % 15.0 % Depreciation 17,478 9,271 4,281 31,608 Amortization 41,169 20,448 8,319 69,936 Restructuring expenses 2,934 2,892 2,405 8,231 Acquisition related adjustments (1,256 ) 15,062 303 15,159 Charitable support — — — 798 Stock compensation — — — 42,641 Segment adjusted EBITDA $ 450,543 $ 148,484 $ 81,472 $ 619,869 Adjusted EBITDA % of net sales 25.5 % 17.8 % 20.2 % 20.7 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $57.7 million and $60.6 million for the nine months ended September 30, 2023 and October 1, 2022, respectively. (2) Foreign exchange rates negatively impacted Segment Adjusted EBITDA by approximately $0.4 million for the nine months ended September 30, 2023. THE MIDDLEBY CORPORATION NON-GAAP INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Three Months Ended 3rd Qtr, 2023 3rd Qtr, 2022 $ Diluted per share $ Diluted per share Net earnings $ 108,650 $ 2.01 $ 104,369 $ 1.92 Amortization(1) 20,693 0.38 21,661 0.40 Restructuring expenses 4,448 0.08 2,327 0.04 Acquisition related adjustments (7 ) — 3,189 0.06 Net periodic pension benefit (other than service costs & curtailment) (2,103 ) (0.04 ) (9,944 ) (0.18 ) Charitable support 118 — — — Income tax effect of pre-tax adjustments (5,741 ) (0.11 ) (4,291 ) (0.08 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings(2) — 0.03 — 0.02 Adjusted net earnings $ 126,058 $ 2.35 $ 117,311 $ 2.18 Diluted weighted average number of shares 54,157 54,384 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings(2) (550 ) (494 ) Adjusted diluted weighted average number of shares 53,607 53,890 Nine Months Ended 3rd Qtr, 2023 3rd Qtr, 2022 $ Diluted per share $ Diluted per share Net earnings $ 324,589 $ 5.99 $ 303,372 $ 5.50 Amortization(1) 61,970 1.14 75,309 1.37 Restructuring expenses 11,698 0.22 8,231 0.15 Acquisition related adjustments 841 0.02 15,159 0.27 Net periodic pension benefit (other than service costs & curtailment) (6,929 ) (0.13 ) (32,244 ) (0.58 ) Charitable support 607 0.01 798 0.01 Income tax effect of pre-tax adjustments (16,979 ) (0.31 ) (16,611 ) (0.30 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings(2) — 0.07 — 0.11 Adjusted net earnings $ 375,797 $ 7.01 $ 354,014 $ 6.53 Diluted weighted average number of shares 54,192 55,134 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings(2) (614 ) (932 ) Adjusted diluted weighted average number of shares 53,578 54,202 (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, 2023 3rd Qtr, 2022 3rd Qtr, 2023 3rd Qtr, 2022 Net Cash Flows Provided By (Used In): Operating activities $ 219,153 $ 83,991 $ 373,103 $ 173,449 Investing activities (53,958 ) (150,609 ) (139,224 ) (257,868 ) Financing activities (150,533 ) 54,856 (225,768 ) 72,594 Free Cash Flow �� Cash flow from operating activities $ 219,153 $ 83,991 $ 373,103 $ 173,449 Less: Capital expenditures (21,330 ) (18,781 ) (69,645 ) (50,914 ) Free cash flow $ 197,823 $ 65,210 $ 303,458 $ 122,535 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/20231108410534/en/