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 Fourth Quarter Results By: The Middleby Corporation via Business Wire February 20, 2024 at 07:00 AM EST Record Q4 Adjusted EBITDA of $235 million, a 1% increase year over year Record YTD Adjusted EBITDA of $900 million, a 6% increase year over year Record operating cash flows of $256 million for the quarter and $629 million for the year Profitability grew to an organic adjusted EBITDA margin of 23.6% compared to 22.6% in the prior year Diluted Earnings per share of $1.42 and adjusted net earnings per share of $2.65 for the fourth quarter, an increase of 3% year over year Net leverage reduced to less than 2.5x 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 fourth quarter of 2023. "We are proud of the accomplishments our team achieved in 2023, concluding with a strong fourth quarter finish in a challenging year. In 2023, we posted another year of record EBITDA, while also making great strides toward our long-term profitability goals. We generated record cash flows for the year, while making meaningful strategic investments in our operations, sales and marketing capabilities, and our industry leading product innovations. We enter 2024 with a strong financial position and each of our three industry-leading foodservice businesses are poised for long-term profitable growth," said Tim FitzGerald, CEO of The Middleby Corporation. 2023 Fourth Quarter Financial Results Net sales decreased 2.2% in the fourth quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales decreased 4.7% in the fourth quarter over the comparative prior year period. Organic net sales (a non-GAAP measure) decreases were reported for all segments in the fourth 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 (0.2 )% (12.5 )% 2.7 % (2.2 )% Acquisitions 1.4 % 0.3 % 2.3 % 1.3 % Foreign Exchange Rates 0.8 % 1.8 % 1.7 % 1.2 % Organic Net Sales Growth (1) (2) (2.3 )% (14.6 )% (1.3 )% (4.7 )% (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 Operating income during the fourth quarter included $78.1 million of impairment charges associated with tradenames primarily within the Residential Kitchen Equipment Group. Adjusted EBITDA (a non-GAAP measure) was $235.2 million in the fourth quarter compared to $233.5 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 28.6 % 10.4 % 27.6 % 23.3 % Acquisitions (0.4 )% 0.2 % (0.1 )% (0.2 )% Foreign Exchange Rates — % 0.2 % 0.1 % — % Organic Adjusted EBITDA (1) (2) 29.1 % 10.1 % 27.6 % 23.6 % (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 $4.0 million in the fourth quarter, which negatively impacted adjusted earnings per share by $0.06. Operating cash flows during the fourth quarter amounted to $255.7 million in comparison to $159.1 million in the prior year period. Operating cash flows for the twelve months period ended December 30, 2023 amounted to $628.8 million in comparison to $332.6 million in the prior year period. The total leverage ratio per our credit agreements was less than 2.5x. The trailing twelve month bank agreement pro-forma EBITDA was $921.8 million. Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2023 fiscal fourth quarter amounted to $2.2 billion as compared to $2.6 billion at the end of fiscal 2022. Our borrowing availability at the end of the fourth quarter was approximately $2.8 billion. "We continue to further strengthen our three industry-leading foodservice platforms through organic growth initiatives and strategic acquisitions. We are excited to have most recently completed the acquisition of GBT GmbH Bakery Technology (“GBT”). Based in Lūnen Germany, GBT has a broad portfolio of highly-engineered industrial bakery product offerings that further extends our existing portfolio of solutions, providing for synergistic growth opportunities within our Food Processing Group." "We are also very excited for Middleby Residential to be participating at the upcoming Kitchen & Bath Industry Show on February 27-29 in Las Vegas. Our entire portfolio of leading indoor and outdoor brands will be on display. We will be launching a record number of new products featuring new colors and designs, the latest in cooking technology, and the next generation of connected equipment," concluded Mr. FitzGerald. Conference Call The company has scheduled a conference call to discuss the fourth quarter results at 11 a.m. Eastern/10 a.m. Central Time on February 20th. 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 Twelve Months Ended 4th Qtr, 2023 4th Qtr, 2022 4th Qtr, 2023 4th Qtr, 2022 Net sales $ 1,008,576 $ 1,031,705 $ 4,036,605 $ 4,032,853 Cost of sales 621,807 641,635 2,502,543 2,586,299 Gross profit 386,769 390,070 1,534,062 1,446,554 Selling, general and administrative expenses 191,585 200,477 806,946 797,234 Restructuring expenses 2,436 1,485 14,134 9,716 Impairments 78,114 — 78,114 — Income from operations 114,634 188,108 634,868 639,604 Interest expense and deferred financing amortization, net 28,277 26,414 120,348 88,977 Net periodic pension benefit (other than service costs & curtailment) (2,142 ) (10,437 ) (9,071 ) (42,681 ) Other expense, net 1,571 10,415 4,213 28,893 Earnings before income taxes 86,928 161,716 519,378 564,415 Provision for income taxes 10,635 28,519 118,496 127,846 Net earnings $ 76,293 $ 133,197 $ 400,882 $ 436,569 Net earnings per share: Basic $ 1.42 $ 2.48 $ 7.48 $ 8.07 Diluted $ 1.42 $ 2.45 $ 7.41 $ 7.95 Weighted average number of shares Basic 53,601 53,809 53,577 54,095 Diluted 53,768 54,388 54,086 54,947 THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in 000’s) (Unaudited) Dec 30, 2023 Dec 31, 2022 ASSETS Cash and cash equivalents $ 247,496 $ 162,001 Accounts receivable, net 644,576 631,134 Inventories, net 935,867 1,077,729 Prepaid expenses and other 112,690 125,640 Prepaid taxes 25,230 9,492 Total current assets 1,965,859 2,005,996 Property, plant and equipment, net 510,898 443,528 Goodwill 2,486,310 2,411,834 Other intangibles, net 1,693,076 1,794,232 Long-term deferred tax assets 7,945 6,738 Pension benefits assets 38,535 — Other assets 204,069 212,538 Total assets $ 6,906,692 $ 6,874,866 LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term debt $ 44,822 $ 45,583 Accounts payable 227,080 271,374 Accrued expenses 579,192 671,327 Total current liabilities 851,094 988,284 Long-term debt 2,380,373 2,676,741 Long-term deferred tax liability 216,143 220,204 Accrued pension benefits 12,128 14,948 Other non-current liabilities 197,065 176,942 Stockholders' equity 3,249,889 2,797,747 Total liabilities and stockholders' equity $ 6,906,692 $ 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 December 30, 2023 Net sales $ 627,864 $ 189,012 $ 191,700 $ 1,008,576 Segment Operating Income $ 164,111 $ (63,647 ) $ 46,986 $ 114,634 Operating Income % of net sales 26.1 % (33.7 )% 24.5 % 11.4 % Depreciation 7,189 3,567 2,039 13,328 Amortization 13,823 2,284 2,325 18,432 Restructuring expenses 515 1,218 703 2,436 Acquisition related adjustments (8,345 ) 31 812 (7,502 ) Charitable support to Ukraine — — — 8 Stock compensation — — — 15,742 Impairments 1,986 76,128 — 78,114 Segment adjusted EBITDA (2) $ 179,279 $ 19,581 $ 52,865 $ 235,192 Adjusted EBITDA % of net sales 28.6 % 10.4 % 27.6 % 23.3 % Three Months Ended December 31, 2022 Net sales $ 628,914 $ 216,068 $ 186,723 $ 1,031,705 Segment Operating Income $ 158,318 $ 27,137 $ 41,295 $ 188,108 Operating Income % of net sales 25.2 % 12.6 % 22.1 % 18.2 % Depreciation 6,821 4,325 1,764 13,011 Amortization 13,704 (3,072 ) 5,714 16,346 Restructuring expenses (515 ) 2,215 (215 ) 1,485 Acquisition related adjustments (1,814 ) — 112 (1,307 ) Charitable support to Ukraine — — — 169 Stock compensation — — — 15,727 Segment adjusted EBITDA $ 176,514 $ 30,605 $ 48,670 $ 233,539 Adjusted EBITDA % of net sales 28.1 % 14.2 % 26.1 % 22.6 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $16.5 million and $22.3 million for the three months ended December 30, 2023 and December 31, 2022, respectively. (2) Foreign exchange rates favorably impacted Segment Adjusted EBITDA by approximately $2.6 million for the three months ended December 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) Twelve Months Ended December 30, 2023 Net sales $ 2,521,471 $ 794,516 $ 720,618 $ 4,036,605 Segment Operating Income $ 616,224 $ (12,450 ) $ 158,469 $ 634,868 Operating Income % of net sales 24.4 % (1.6 )% 22.0 % 15.7 % Depreciation 27,323 13,637 7,949 50,416 Amortization 56,728 9,052 9,271 75,051 Restructuring expenses 3,173 9,402 1,559 14,134 Acquisition related adjustments (6,014 ) 76 2,087 (3,851 ) Charitable support to Ukraine — — — 615 Stock compensation — — — 51,047 Impairments 1,986 76,128 — 78,114 Segment adjusted EBITDA (2) $ 699,420 $ 95,845 $ 179,335 $ 900,394 Adjusted EBITDA % of net sales 27.7 % 12.1 % 24.9 % 22.3 % Twelve Months Ended December 31, 2022 Net sales $ 2,394,762 $ 1,048,122 $ 589,969 $ 4,032,853 Segment Operating Income $ 548,536 $ 127,948 $ 107,459 $ 639,604 Operating Income % of net sales 22.9 % 12.2 % 18.2 % 15.9 % Depreciation 24,299 13,596 6,045 44,619 Amortization 54,872 17,376 14,034 86,282 Restructuring expenses 2,419 5,107 2,190 9,716 Acquisition related adjustments (3,070 ) 15,062 415 13,852 Charitable support to Ukraine — — — 967 Stock compensation — — — 58,368 Segment adjusted EBITDA $ 627,056 $ 179,089 $ 130,143 $ 853,408 Adjusted EBITDA % of net sales 26.2 % 17.1 % 22.1 % 21.2 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $74.2 million and $82.9 million for the twelve months ended December 30, 2023 and December 31, 2022, respectively. (2) Foreign exchange rates favorably impacted Segment Adjusted EBITDA by approximately $2.2 million for the twelve months ended December 30, 2023. THE MIDDLEBY CORPORATION NON-GAAP INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Three Months Ended 4th Qtr, 2023 4th Qtr, 2022 $ Diluted per share $ Diluted per share Net earnings $ 76,293 $ 1.42 $ 133,197 $ 2.45 Amortization (1) 20,218 0.38 18,132 0.33 Restructuring expenses 2,436 0.05 1,485 0.03 Acquisition related adjustments (7,502 ) (0.14 ) (1,307 ) (0.02 ) Net periodic pension benefit (other than service costs & curtailment) (2,142 ) (0.04 ) (10,437 ) (0.19 ) Charitable support to Ukraine 8 — 169 — Impairments 78,114 1.45 — — Income tax effect of pre-tax adjustments (24,665 ) (0.46 ) (2,075 ) (0.04 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — (0.01 ) — 0.01 Adjusted net earnings $ 142,760 $ 2.65 $ 139,164 $ 2.57 Diluted weighted average number of shares 53,768 54,388 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) 73 (320 ) Adjusted diluted weighted average number of shares 53,841 54,068 Twelve Months Ended 4th Qtr, 2023 4th Qtr, 2022 $ Diluted per share $ Diluted per share Net earnings $ 400,882 $ 7.41 $ 436,569 $ 7.95 Amortization (1) 82,188 1.52 93,441 1.70 Restructuring expenses 14,134 0.26 9,716 0.18 Acquisition related adjustments (3,851 ) (0.07 ) 13,852 0.25 Net periodic pension benefit (other than service costs & curtailment) (9,071 ) (0.17 ) (42,681 ) (0.78 ) Charitable support to Ukraine 615 0.01 967 0.02 Impairments 78,114 1.44 — — Income tax effect of pre-tax adjustments (42,414 ) (0.78 ) (18,824 ) (0.34 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — 0.08 — 0.12 Adjusted net earnings $ 520,597 $ 9.70 $ 493,040 $ 9.10 Diluted weighted average number of shares 54,086 54,947 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) (442 ) (779 ) Adjusted diluted weighted average number of shares 53,644 54,168 (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 Twelve Months Ended 4th Qtr, 2023 4th Qtr, 2022 4th Qtr, 2023 4th Qtr, 2022 Net Cash Flows Provided By (Used In): Operating activities $ 255,687 $ 159,103 $ 628,790 $ 332,552 Investing activities (16,518 ) (90,451 ) (155,742 ) (348,319 ) Financing activities (165,171 ) (64,963 ) (390,939 ) 7,631 Free Cash Flow Cash flow from operating activities $ 255,687 $ 159,103 $ 628,790 $ 332,552 Less: Capital expenditures (15,534 ) (16,375 ) (85,179 ) (67,289 ) Free cash flow $ 240,153 $ 142,728 $ 543,611 $ 265,263 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/20240220496055/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 Fourth Quarter Results By: The Middleby Corporation via Business Wire February 20, 2024 at 07:00 AM EST Record Q4 Adjusted EBITDA of $235 million, a 1% increase year over year Record YTD Adjusted EBITDA of $900 million, a 6% increase year over year Record operating cash flows of $256 million for the quarter and $629 million for the year Profitability grew to an organic adjusted EBITDA margin of 23.6% compared to 22.6% in the prior year Diluted Earnings per share of $1.42 and adjusted net earnings per share of $2.65 for the fourth quarter, an increase of 3% year over year Net leverage reduced to less than 2.5x 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 fourth quarter of 2023. "We are proud of the accomplishments our team achieved in 2023, concluding with a strong fourth quarter finish in a challenging year. In 2023, we posted another year of record EBITDA, while also making great strides toward our long-term profitability goals. We generated record cash flows for the year, while making meaningful strategic investments in our operations, sales and marketing capabilities, and our industry leading product innovations. We enter 2024 with a strong financial position and each of our three industry-leading foodservice businesses are poised for long-term profitable growth," said Tim FitzGerald, CEO of The Middleby Corporation. 2023 Fourth Quarter Financial Results Net sales decreased 2.2% in the fourth quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales decreased 4.7% in the fourth quarter over the comparative prior year period. Organic net sales (a non-GAAP measure) decreases were reported for all segments in the fourth 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 (0.2 )% (12.5 )% 2.7 % (2.2 )% Acquisitions 1.4 % 0.3 % 2.3 % 1.3 % Foreign Exchange Rates 0.8 % 1.8 % 1.7 % 1.2 % Organic Net Sales Growth (1) (2) (2.3 )% (14.6 )% (1.3 )% (4.7 )% (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 Operating income during the fourth quarter included $78.1 million of impairment charges associated with tradenames primarily within the Residential Kitchen Equipment Group. Adjusted EBITDA (a non-GAAP measure) was $235.2 million in the fourth quarter compared to $233.5 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 28.6 % 10.4 % 27.6 % 23.3 % Acquisitions (0.4 )% 0.2 % (0.1 )% (0.2 )% Foreign Exchange Rates — % 0.2 % 0.1 % — % Organic Adjusted EBITDA (1) (2) 29.1 % 10.1 % 27.6 % 23.6 % (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 $4.0 million in the fourth quarter, which negatively impacted adjusted earnings per share by $0.06. Operating cash flows during the fourth quarter amounted to $255.7 million in comparison to $159.1 million in the prior year period. Operating cash flows for the twelve months period ended December 30, 2023 amounted to $628.8 million in comparison to $332.6 million in the prior year period. The total leverage ratio per our credit agreements was less than 2.5x. The trailing twelve month bank agreement pro-forma EBITDA was $921.8 million. Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2023 fiscal fourth quarter amounted to $2.2 billion as compared to $2.6 billion at the end of fiscal 2022. Our borrowing availability at the end of the fourth quarter was approximately $2.8 billion. "We continue to further strengthen our three industry-leading foodservice platforms through organic growth initiatives and strategic acquisitions. We are excited to have most recently completed the acquisition of GBT GmbH Bakery Technology (“GBT”). Based in Lūnen Germany, GBT has a broad portfolio of highly-engineered industrial bakery product offerings that further extends our existing portfolio of solutions, providing for synergistic growth opportunities within our Food Processing Group." "We are also very excited for Middleby Residential to be participating at the upcoming Kitchen & Bath Industry Show on February 27-29 in Las Vegas. Our entire portfolio of leading indoor and outdoor brands will be on display. We will be launching a record number of new products featuring new colors and designs, the latest in cooking technology, and the next generation of connected equipment," concluded Mr. FitzGerald. Conference Call The company has scheduled a conference call to discuss the fourth quarter results at 11 a.m. Eastern/10 a.m. Central Time on February 20th. 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 Twelve Months Ended 4th Qtr, 2023 4th Qtr, 2022 4th Qtr, 2023 4th Qtr, 2022 Net sales $ 1,008,576 $ 1,031,705 $ 4,036,605 $ 4,032,853 Cost of sales 621,807 641,635 2,502,543 2,586,299 Gross profit 386,769 390,070 1,534,062 1,446,554 Selling, general and administrative expenses 191,585 200,477 806,946 797,234 Restructuring expenses 2,436 1,485 14,134 9,716 Impairments 78,114 — 78,114 — Income from operations 114,634 188,108 634,868 639,604 Interest expense and deferred financing amortization, net 28,277 26,414 120,348 88,977 Net periodic pension benefit (other than service costs & curtailment) (2,142 ) (10,437 ) (9,071 ) (42,681 ) Other expense, net 1,571 10,415 4,213 28,893 Earnings before income taxes 86,928 161,716 519,378 564,415 Provision for income taxes 10,635 28,519 118,496 127,846 Net earnings $ 76,293 $ 133,197 $ 400,882 $ 436,569 Net earnings per share: Basic $ 1.42 $ 2.48 $ 7.48 $ 8.07 Diluted $ 1.42 $ 2.45 $ 7.41 $ 7.95 Weighted average number of shares Basic 53,601 53,809 53,577 54,095 Diluted 53,768 54,388 54,086 54,947 THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in 000’s) (Unaudited) Dec 30, 2023 Dec 31, 2022 ASSETS Cash and cash equivalents $ 247,496 $ 162,001 Accounts receivable, net 644,576 631,134 Inventories, net 935,867 1,077,729 Prepaid expenses and other 112,690 125,640 Prepaid taxes 25,230 9,492 Total current assets 1,965,859 2,005,996 Property, plant and equipment, net 510,898 443,528 Goodwill 2,486,310 2,411,834 Other intangibles, net 1,693,076 1,794,232 Long-term deferred tax assets 7,945 6,738 Pension benefits assets 38,535 — Other assets 204,069 212,538 Total assets $ 6,906,692 $ 6,874,866 LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term debt $ 44,822 $ 45,583 Accounts payable 227,080 271,374 Accrued expenses 579,192 671,327 Total current liabilities 851,094 988,284 Long-term debt 2,380,373 2,676,741 Long-term deferred tax liability 216,143 220,204 Accrued pension benefits 12,128 14,948 Other non-current liabilities 197,065 176,942 Stockholders' equity 3,249,889 2,797,747 Total liabilities and stockholders' equity $ 6,906,692 $ 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 December 30, 2023 Net sales $ 627,864 $ 189,012 $ 191,700 $ 1,008,576 Segment Operating Income $ 164,111 $ (63,647 ) $ 46,986 $ 114,634 Operating Income % of net sales 26.1 % (33.7 )% 24.5 % 11.4 % Depreciation 7,189 3,567 2,039 13,328 Amortization 13,823 2,284 2,325 18,432 Restructuring expenses 515 1,218 703 2,436 Acquisition related adjustments (8,345 ) 31 812 (7,502 ) Charitable support to Ukraine — — — 8 Stock compensation — — — 15,742 Impairments 1,986 76,128 — 78,114 Segment adjusted EBITDA (2) $ 179,279 $ 19,581 $ 52,865 $ 235,192 Adjusted EBITDA % of net sales 28.6 % 10.4 % 27.6 % 23.3 % Three Months Ended December 31, 2022 Net sales $ 628,914 $ 216,068 $ 186,723 $ 1,031,705 Segment Operating Income $ 158,318 $ 27,137 $ 41,295 $ 188,108 Operating Income % of net sales 25.2 % 12.6 % 22.1 % 18.2 % Depreciation 6,821 4,325 1,764 13,011 Amortization 13,704 (3,072 ) 5,714 16,346 Restructuring expenses (515 ) 2,215 (215 ) 1,485 Acquisition related adjustments (1,814 ) — 112 (1,307 ) Charitable support to Ukraine — — — 169 Stock compensation — — — 15,727 Segment adjusted EBITDA $ 176,514 $ 30,605 $ 48,670 $ 233,539 Adjusted EBITDA % of net sales 28.1 % 14.2 % 26.1 % 22.6 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $16.5 million and $22.3 million for the three months ended December 30, 2023 and December 31, 2022, respectively. (2) Foreign exchange rates favorably impacted Segment Adjusted EBITDA by approximately $2.6 million for the three months ended December 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) Twelve Months Ended December 30, 2023 Net sales $ 2,521,471 $ 794,516 $ 720,618 $ 4,036,605 Segment Operating Income $ 616,224 $ (12,450 ) $ 158,469 $ 634,868 Operating Income % of net sales 24.4 % (1.6 )% 22.0 % 15.7 % Depreciation 27,323 13,637 7,949 50,416 Amortization 56,728 9,052 9,271 75,051 Restructuring expenses 3,173 9,402 1,559 14,134 Acquisition related adjustments (6,014 ) 76 2,087 (3,851 ) Charitable support to Ukraine — — — 615 Stock compensation — — — 51,047 Impairments 1,986 76,128 — 78,114 Segment adjusted EBITDA (2) $ 699,420 $ 95,845 $ 179,335 $ 900,394 Adjusted EBITDA % of net sales 27.7 % 12.1 % 24.9 % 22.3 % Twelve Months Ended December 31, 2022 Net sales $ 2,394,762 $ 1,048,122 $ 589,969 $ 4,032,853 Segment Operating Income $ 548,536 $ 127,948 $ 107,459 $ 639,604 Operating Income % of net sales 22.9 % 12.2 % 18.2 % 15.9 % Depreciation 24,299 13,596 6,045 44,619 Amortization 54,872 17,376 14,034 86,282 Restructuring expenses 2,419 5,107 2,190 9,716 Acquisition related adjustments (3,070 ) 15,062 415 13,852 Charitable support to Ukraine — — — 967 Stock compensation — — — 58,368 Segment adjusted EBITDA $ 627,056 $ 179,089 $ 130,143 $ 853,408 Adjusted EBITDA % of net sales 26.2 % 17.1 % 22.1 % 21.2 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $74.2 million and $82.9 million for the twelve months ended December 30, 2023 and December 31, 2022, respectively. (2) Foreign exchange rates favorably impacted Segment Adjusted EBITDA by approximately $2.2 million for the twelve months ended December 30, 2023. THE MIDDLEBY CORPORATION NON-GAAP INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Three Months Ended 4th Qtr, 2023 4th Qtr, 2022 $ Diluted per share $ Diluted per share Net earnings $ 76,293 $ 1.42 $ 133,197 $ 2.45 Amortization (1) 20,218 0.38 18,132 0.33 Restructuring expenses 2,436 0.05 1,485 0.03 Acquisition related adjustments (7,502 ) (0.14 ) (1,307 ) (0.02 ) Net periodic pension benefit (other than service costs & curtailment) (2,142 ) (0.04 ) (10,437 ) (0.19 ) Charitable support to Ukraine 8 — 169 — Impairments 78,114 1.45 — — Income tax effect of pre-tax adjustments (24,665 ) (0.46 ) (2,075 ) (0.04 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — (0.01 ) — 0.01 Adjusted net earnings $ 142,760 $ 2.65 $ 139,164 $ 2.57 Diluted weighted average number of shares 53,768 54,388 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) 73 (320 ) Adjusted diluted weighted average number of shares 53,841 54,068 Twelve Months Ended 4th Qtr, 2023 4th Qtr, 2022 $ Diluted per share $ Diluted per share Net earnings $ 400,882 $ 7.41 $ 436,569 $ 7.95 Amortization (1) 82,188 1.52 93,441 1.70 Restructuring expenses 14,134 0.26 9,716 0.18 Acquisition related adjustments (3,851 ) (0.07 ) 13,852 0.25 Net periodic pension benefit (other than service costs & curtailment) (9,071 ) (0.17 ) (42,681 ) (0.78 ) Charitable support to Ukraine 615 0.01 967 0.02 Impairments 78,114 1.44 — — Income tax effect of pre-tax adjustments (42,414 ) (0.78 ) (18,824 ) (0.34 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — 0.08 — 0.12 Adjusted net earnings $ 520,597 $ 9.70 $ 493,040 $ 9.10 Diluted weighted average number of shares 54,086 54,947 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) (442 ) (779 ) Adjusted diluted weighted average number of shares 53,644 54,168 (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 Twelve Months Ended 4th Qtr, 2023 4th Qtr, 2022 4th Qtr, 2023 4th Qtr, 2022 Net Cash Flows Provided By (Used In): Operating activities $ 255,687 $ 159,103 $ 628,790 $ 332,552 Investing activities (16,518 ) (90,451 ) (155,742 ) (348,319 ) Financing activities (165,171 ) (64,963 ) (390,939 ) 7,631 Free Cash Flow Cash flow from operating activities $ 255,687 $ 159,103 $ 628,790 $ 332,552 Less: Capital expenditures (15,534 ) (16,375 ) (85,179 ) (67,289 ) Free cash flow $ 240,153 $ 142,728 $ 543,611 $ 265,263 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/20240220496055/en/Contacts John Joyner, VP of Investor Relations, jjoyner@middleby.com
Record Q4 Adjusted EBITDA of $235 million, a 1% increase year over year Record YTD Adjusted EBITDA of $900 million, a 6% increase year over year Record operating cash flows of $256 million for the quarter and $629 million for the year Profitability grew to an organic adjusted EBITDA margin of 23.6% compared to 22.6% in the prior year Diluted Earnings per share of $1.42 and adjusted net earnings per share of $2.65 for the fourth quarter, an increase of 3% year over year Net leverage reduced to less than 2.5x
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 fourth quarter of 2023. "We are proud of the accomplishments our team achieved in 2023, concluding with a strong fourth quarter finish in a challenging year. In 2023, we posted another year of record EBITDA, while also making great strides toward our long-term profitability goals. We generated record cash flows for the year, while making meaningful strategic investments in our operations, sales and marketing capabilities, and our industry leading product innovations. We enter 2024 with a strong financial position and each of our three industry-leading foodservice businesses are poised for long-term profitable growth," said Tim FitzGerald, CEO of The Middleby Corporation. 2023 Fourth Quarter Financial Results Net sales decreased 2.2% in the fourth quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales decreased 4.7% in the fourth quarter over the comparative prior year period. Organic net sales (a non-GAAP measure) decreases were reported for all segments in the fourth 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 (0.2 )% (12.5 )% 2.7 % (2.2 )% Acquisitions 1.4 % 0.3 % 2.3 % 1.3 % Foreign Exchange Rates 0.8 % 1.8 % 1.7 % 1.2 % Organic Net Sales Growth (1) (2) (2.3 )% (14.6 )% (1.3 )% (4.7 )% (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 Operating income during the fourth quarter included $78.1 million of impairment charges associated with tradenames primarily within the Residential Kitchen Equipment Group. Adjusted EBITDA (a non-GAAP measure) was $235.2 million in the fourth quarter compared to $233.5 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 28.6 % 10.4 % 27.6 % 23.3 % Acquisitions (0.4 )% 0.2 % (0.1 )% (0.2 )% Foreign Exchange Rates — % 0.2 % 0.1 % — % Organic Adjusted EBITDA (1) (2) 29.1 % 10.1 % 27.6 % 23.6 % (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 $4.0 million in the fourth quarter, which negatively impacted adjusted earnings per share by $0.06. Operating cash flows during the fourth quarter amounted to $255.7 million in comparison to $159.1 million in the prior year period. Operating cash flows for the twelve months period ended December 30, 2023 amounted to $628.8 million in comparison to $332.6 million in the prior year period. The total leverage ratio per our credit agreements was less than 2.5x. The trailing twelve month bank agreement pro-forma EBITDA was $921.8 million. Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2023 fiscal fourth quarter amounted to $2.2 billion as compared to $2.6 billion at the end of fiscal 2022. Our borrowing availability at the end of the fourth quarter was approximately $2.8 billion. "We continue to further strengthen our three industry-leading foodservice platforms through organic growth initiatives and strategic acquisitions. We are excited to have most recently completed the acquisition of GBT GmbH Bakery Technology (“GBT”). Based in Lūnen Germany, GBT has a broad portfolio of highly-engineered industrial bakery product offerings that further extends our existing portfolio of solutions, providing for synergistic growth opportunities within our Food Processing Group." "We are also very excited for Middleby Residential to be participating at the upcoming Kitchen & Bath Industry Show on February 27-29 in Las Vegas. Our entire portfolio of leading indoor and outdoor brands will be on display. We will be launching a record number of new products featuring new colors and designs, the latest in cooking technology, and the next generation of connected equipment," concluded Mr. FitzGerald. Conference Call The company has scheduled a conference call to discuss the fourth quarter results at 11 a.m. Eastern/10 a.m. Central Time on February 20th. 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 Twelve Months Ended 4th Qtr, 2023 4th Qtr, 2022 4th Qtr, 2023 4th Qtr, 2022 Net sales $ 1,008,576 $ 1,031,705 $ 4,036,605 $ 4,032,853 Cost of sales 621,807 641,635 2,502,543 2,586,299 Gross profit 386,769 390,070 1,534,062 1,446,554 Selling, general and administrative expenses 191,585 200,477 806,946 797,234 Restructuring expenses 2,436 1,485 14,134 9,716 Impairments 78,114 — 78,114 — Income from operations 114,634 188,108 634,868 639,604 Interest expense and deferred financing amortization, net 28,277 26,414 120,348 88,977 Net periodic pension benefit (other than service costs & curtailment) (2,142 ) (10,437 ) (9,071 ) (42,681 ) Other expense, net 1,571 10,415 4,213 28,893 Earnings before income taxes 86,928 161,716 519,378 564,415 Provision for income taxes 10,635 28,519 118,496 127,846 Net earnings $ 76,293 $ 133,197 $ 400,882 $ 436,569 Net earnings per share: Basic $ 1.42 $ 2.48 $ 7.48 $ 8.07 Diluted $ 1.42 $ 2.45 $ 7.41 $ 7.95 Weighted average number of shares Basic 53,601 53,809 53,577 54,095 Diluted 53,768 54,388 54,086 54,947 THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in 000’s) (Unaudited) Dec 30, 2023 Dec 31, 2022 ASSETS Cash and cash equivalents $ 247,496 $ 162,001 Accounts receivable, net 644,576 631,134 Inventories, net 935,867 1,077,729 Prepaid expenses and other 112,690 125,640 Prepaid taxes 25,230 9,492 Total current assets 1,965,859 2,005,996 Property, plant and equipment, net 510,898 443,528 Goodwill 2,486,310 2,411,834 Other intangibles, net 1,693,076 1,794,232 Long-term deferred tax assets 7,945 6,738 Pension benefits assets 38,535 — Other assets 204,069 212,538 Total assets $ 6,906,692 $ 6,874,866 LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term debt $ 44,822 $ 45,583 Accounts payable 227,080 271,374 Accrued expenses 579,192 671,327 Total current liabilities 851,094 988,284 Long-term debt 2,380,373 2,676,741 Long-term deferred tax liability 216,143 220,204 Accrued pension benefits 12,128 14,948 Other non-current liabilities 197,065 176,942 Stockholders' equity 3,249,889 2,797,747 Total liabilities and stockholders' equity $ 6,906,692 $ 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 December 30, 2023 Net sales $ 627,864 $ 189,012 $ 191,700 $ 1,008,576 Segment Operating Income $ 164,111 $ (63,647 ) $ 46,986 $ 114,634 Operating Income % of net sales 26.1 % (33.7 )% 24.5 % 11.4 % Depreciation 7,189 3,567 2,039 13,328 Amortization 13,823 2,284 2,325 18,432 Restructuring expenses 515 1,218 703 2,436 Acquisition related adjustments (8,345 ) 31 812 (7,502 ) Charitable support to Ukraine — — — 8 Stock compensation — — — 15,742 Impairments 1,986 76,128 — 78,114 Segment adjusted EBITDA (2) $ 179,279 $ 19,581 $ 52,865 $ 235,192 Adjusted EBITDA % of net sales 28.6 % 10.4 % 27.6 % 23.3 % Three Months Ended December 31, 2022 Net sales $ 628,914 $ 216,068 $ 186,723 $ 1,031,705 Segment Operating Income $ 158,318 $ 27,137 $ 41,295 $ 188,108 Operating Income % of net sales 25.2 % 12.6 % 22.1 % 18.2 % Depreciation 6,821 4,325 1,764 13,011 Amortization 13,704 (3,072 ) 5,714 16,346 Restructuring expenses (515 ) 2,215 (215 ) 1,485 Acquisition related adjustments (1,814 ) — 112 (1,307 ) Charitable support to Ukraine — — — 169 Stock compensation — — — 15,727 Segment adjusted EBITDA $ 176,514 $ 30,605 $ 48,670 $ 233,539 Adjusted EBITDA % of net sales 28.1 % 14.2 % 26.1 % 22.6 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $16.5 million and $22.3 million for the three months ended December 30, 2023 and December 31, 2022, respectively. (2) Foreign exchange rates favorably impacted Segment Adjusted EBITDA by approximately $2.6 million for the three months ended December 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) Twelve Months Ended December 30, 2023 Net sales $ 2,521,471 $ 794,516 $ 720,618 $ 4,036,605 Segment Operating Income $ 616,224 $ (12,450 ) $ 158,469 $ 634,868 Operating Income % of net sales 24.4 % (1.6 )% 22.0 % 15.7 % Depreciation 27,323 13,637 7,949 50,416 Amortization 56,728 9,052 9,271 75,051 Restructuring expenses 3,173 9,402 1,559 14,134 Acquisition related adjustments (6,014 ) 76 2,087 (3,851 ) Charitable support to Ukraine — — — 615 Stock compensation — — — 51,047 Impairments 1,986 76,128 — 78,114 Segment adjusted EBITDA (2) $ 699,420 $ 95,845 $ 179,335 $ 900,394 Adjusted EBITDA % of net sales 27.7 % 12.1 % 24.9 % 22.3 % Twelve Months Ended December 31, 2022 Net sales $ 2,394,762 $ 1,048,122 $ 589,969 $ 4,032,853 Segment Operating Income $ 548,536 $ 127,948 $ 107,459 $ 639,604 Operating Income % of net sales 22.9 % 12.2 % 18.2 % 15.9 % Depreciation 24,299 13,596 6,045 44,619 Amortization 54,872 17,376 14,034 86,282 Restructuring expenses 2,419 5,107 2,190 9,716 Acquisition related adjustments (3,070 ) 15,062 415 13,852 Charitable support to Ukraine — — — 967 Stock compensation — — — 58,368 Segment adjusted EBITDA $ 627,056 $ 179,089 $ 130,143 $ 853,408 Adjusted EBITDA % of net sales 26.2 % 17.1 % 22.1 % 21.2 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $74.2 million and $82.9 million for the twelve months ended December 30, 2023 and December 31, 2022, respectively. (2) Foreign exchange rates favorably impacted Segment Adjusted EBITDA by approximately $2.2 million for the twelve months ended December 30, 2023. THE MIDDLEBY CORPORATION NON-GAAP INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Three Months Ended 4th Qtr, 2023 4th Qtr, 2022 $ Diluted per share $ Diluted per share Net earnings $ 76,293 $ 1.42 $ 133,197 $ 2.45 Amortization (1) 20,218 0.38 18,132 0.33 Restructuring expenses 2,436 0.05 1,485 0.03 Acquisition related adjustments (7,502 ) (0.14 ) (1,307 ) (0.02 ) Net periodic pension benefit (other than service costs & curtailment) (2,142 ) (0.04 ) (10,437 ) (0.19 ) Charitable support to Ukraine 8 — 169 — Impairments 78,114 1.45 — — Income tax effect of pre-tax adjustments (24,665 ) (0.46 ) (2,075 ) (0.04 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — (0.01 ) — 0.01 Adjusted net earnings $ 142,760 $ 2.65 $ 139,164 $ 2.57 Diluted weighted average number of shares 53,768 54,388 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) 73 (320 ) Adjusted diluted weighted average number of shares 53,841 54,068 Twelve Months Ended 4th Qtr, 2023 4th Qtr, 2022 $ Diluted per share $ Diluted per share Net earnings $ 400,882 $ 7.41 $ 436,569 $ 7.95 Amortization (1) 82,188 1.52 93,441 1.70 Restructuring expenses 14,134 0.26 9,716 0.18 Acquisition related adjustments (3,851 ) (0.07 ) 13,852 0.25 Net periodic pension benefit (other than service costs & curtailment) (9,071 ) (0.17 ) (42,681 ) (0.78 ) Charitable support to Ukraine 615 0.01 967 0.02 Impairments 78,114 1.44 — — Income tax effect of pre-tax adjustments (42,414 ) (0.78 ) (18,824 ) (0.34 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — 0.08 — 0.12 Adjusted net earnings $ 520,597 $ 9.70 $ 493,040 $ 9.10 Diluted weighted average number of shares 54,086 54,947 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) (442 ) (779 ) Adjusted diluted weighted average number of shares 53,644 54,168 (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 Twelve Months Ended 4th Qtr, 2023 4th Qtr, 2022 4th Qtr, 2023 4th Qtr, 2022 Net Cash Flows Provided By (Used In): Operating activities $ 255,687 $ 159,103 $ 628,790 $ 332,552 Investing activities (16,518 ) (90,451 ) (155,742 ) (348,319 ) Financing activities (165,171 ) (64,963 ) (390,939 ) 7,631 Free Cash Flow Cash flow from operating activities $ 255,687 $ 159,103 $ 628,790 $ 332,552 Less: Capital expenditures (15,534 ) (16,375 ) (85,179 ) (67,289 ) Free cash flow $ 240,153 $ 142,728 $ 543,611 $ 265,263 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/20240220496055/en/