The Middleby Corporation Reports Fourth Quarter Results

About this update from The Middleby Corporation

Net sales of $1,014 million Diluted earnings per share of $2.07 and adjusted net earnings per share of $2.88 Operating income of $170 million and 16.8% of net sales Record Adjusted EBITDA of $251 million and organic adjusted EBITDA margin of 24.8% Record operating cash flows of $687 million for the full year and $240 million for the quarter Net leverage reduced to 2.0x Repurchased $16.4 million of Middleby common shares in the fourth quarter Completed the acquisitions of Emery Thompson , JC Ford and Gorreri ELGIN, Ill. --(BUSINESS WIRE)-- 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 2024. “We closed 2024 by delivering our strongest margins of the year. Exceptional profitability achievements by our Food Processing and Commercial Foodservice platforms, and a strong result in the residential segment given the depressed market conditions, led us to record cash flow for the year. These results are being delivered while also making critical investments across all our businesses that are uniquely positioning us for the future. “We have continued to execute on our strategic initiatives focused on driving sustainable long-term organic growth, with recent launches of transformative product innovations and investments in differentiated go-to market capabilities. While we are currently facing challenging industry macro-conditions, we expect to see growth across all three of our foodservice segments as we progress through 2025. Our investments will continue to strengthen our leadership position across our businesses, positioning us very favorably as we anticipate moving into a multi-year recovery,” said Tim FitzGerald , CEO of the Middleby Corporation . 2024 Fourth Quarter Financial Results Net sales increased 0.5% in the fourth quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales decreased 1.3% in the fourth quarter over the comparative prior year period. A reconciliation of organic net sales (a non-GAAP measure) by segment is as follows: Commercial Foodservice Residential Kitchen Food Processing Total Company Reported Net Sales Growth (2.9) % (2.1) % 14.4 % 0.5 % Acquisitions 0.2 % — % 10.2 % 2.1 % Foreign Exchange Rates (0.3) % 0.4 % (0.5) % (0.2) % Organic Net Sales Growth (1) (2) (2.8) % (2.4) % 4.7 % (1.3) % (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 $38.6 million of impairment charges as compared to $78.1 million of impairment charges in the prior year period primarily associated with tradenames within the Residential Kitchen Equipment Group . Adjusted EBITDA (a non-GAAP measure) was $251.2 million in the fourth quarter compared to $235.2 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 28.1 % 13.1 % 29.6 % 24.8 % Acquisitions — % — % (0.7) % — % Foreign Exchange Rates 0.1 % (0.1) % (0.1) % — % Organic Adjusted EBITDA (1) (2) 28.0 % 13.2 % 30.3 % 24.8 % (1) Organic Adjusted EBITDA defined as Adjusted EBITDA excluding impact of acquisitions and foreign exchange rates. (2) Totals may be impacted by rounding Operating cash flows during the fourth quarter amounted to $239.7 million in comparison to $255.7 million in the prior year period. Operating cash flows for the twelve months period ended December 28, 2024 amounted to $686.8 million in comparison to $628.8 million in the prior year period. During the fourth quarter the company repurchased $16.4 million of Middleby common shares and approximately $20.0 million to date in the first quarter of 2025. The total leverage ratio per our credit agreements was 2.0x. The trailing twelve month bank agreement pro-forma EBITDA was $893.8 million . Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2024 fiscal fourth quarter amounted to $1.7 billion as compared to $2.2 billion at the end of fiscal 2023. Our borrowing availability at the end of the fourth quarter was approximately $3.1 billion . “We continue to scale our Food Processing platform, completing two acquisitions in the fourth quarter. We have targeted the snack food category as an attractive growing market. The acquisition of JC Ford complements our existing product offerings, significantly strengthening our presence in this faster-growing category of tortilla production equipment systems. The company has developed innovative solutions that have been quickly accepted as the industry standard, allowing customers to automate production lines with a low cost of ownership. “We also added Gorreri Food Processing Technology, an Italian leading manufacturer of equipment for the baked goods industry, including cakes, pies, muffins, tarts and other desert line solutions. Their premium-quality advanced industrial and semi-industrial baked goods solutions further expands the markets our food processing group serves,” added Mr. FitzGerald . Conference Call The company has scheduled a conference call to discuss the fourth quarter results at 8 a.m. Eastern/ 7 a.m. Central Time on February 25th . 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 (844) 481-3012, or (412) 317-1878 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, 2024 4th Qtr, 2023 4th Qtr, 2024 4th Qtr, 2023 Net sales $ 1,013,881 $ 1,008,576 $ 3,875,162 $ 4,036,605 Cost of sales 624,946 621,807 2,404,793 2,502,543 Gross profit 388,935 386,769 1,470,369 1,534,062 Selling, general and administrative expenses 178,394 191,585 762,502 806,946 Restructuring expenses 3,135 2,436 14,181 14,134 Gain on sale of plant (1,139 ) — (1,139 ) — Impairments 38,637 78,114 38,637 78,114 Income from operations 169,908 114,634 656,188 634,868 Interest expense and deferred financing amortization, net 19,990 28,277 92,229 120,348 Net periodic pension benefit (other than service costs & curtailment) (3,653 ) (2,142 ) (14,897 ) (9,071 ) Other expense, net 541 1,571 1,536 4,213 Earnings before income taxes 153,030 86,928 577,320 519,378 Provision for income taxes 40,726 10,635 148,887 118,496 Net earnings $ 112,304 $ 76,293 $ 428,433 $ 400,882 Net earnings per share: Basic $ 2.09 $ 1.42 $ 7.97 $ 7.48 Diluted $ 2.07 $ 1.42 $ 7.90 $ 7.41 Weighted average number of shares Basic 53,764 53,601 53,738 53,577 Diluted 54,334 53,768 54,209 54,086 THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in 000’s) (Unaudited) Dec 28, 2024 Dec 30, 2023 ASSETS Cash and cash equivalents $ 689,533 $ 247,496 Accounts receivable, net 643,355 644,576 Inventories, net 841,567 935,867 Prepaid expenses and other 131,566 112,690 Prepaid taxes 24,022 25,230 Total current assets 2,330,043 1,965,859 Property, plant and equipment, net 525,965 510,898 Goodwill 2,518,222 2,486,310 Other intangibles, net 1,611,037 1,693,076 Long-term deferred tax assets 6,281 7,945 Pension benefits assets 91,207 38,535 Other assets 200,396 204,069 Total assets $ 7,283,151 $ 6,906,692 LIABILITIES AND STOCKHOLDERS' EQUITY Current maturities of long-term debt $ 43,949 $ 44,822 Accounts payable 208,908 227,080 Accrued expenses 576,465 579,192 Total current liabilities 829,322 851,094 Long-term debt 2,351,118 2,380,373 Long-term deferred tax liability 252,062 216,143 Accrued pension benefits 9,573 12,128 Other non-current liabilities 202,645 197,065 Stockholders' equity 3,638,431 3,249,889 Total liabilities and stockholders' equity $ 7,283,151 $ 6,906,692 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 28, 2024 Net sales $ 609,446 $ 185,042 $ 219,393 $ 1,013,881 Segment Operating Income $ 145,313 $ (12,654 ) $ 58,071 $ 169,908 Operating Income % of net sales 23.8 % (6.8 )% 26.5 % 16.8 % Depreciation 7,577 4,167 2,576 14,781 Amortization 11,331 1,799 2,640 15,770 Restructuring expenses 931 1,946 258 3,135 Acquisition related adjustments 727 327 2,578 3,632 Facility consolidation related expenses — 402 — 402 Charitable support to Ukraine — — — 12 Stock compensation — — — 6,012 Gain on sale of plant — — (1,139 ) (1,139 ) Impairments 5,197 28,162 — 38,637 Segment adjusted EBITDA (2) $ 171,076 $ 24,149 $ 64,984 $ 251,150 Adjusted EBITDA % of net sales 28.1 % 13.1 % 29.6 % 24.8 % 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 $ 179,279 $ 19,581 $ 52,865 $ 235,192 Adjusted EBITDA % of net sales 28.6 % 10.4 % 27.6 % 23.3 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $9.1 million and $16.5 million for the three months ended December 28, 2024 and December 30, 2023 , respectively. (2) Foreign exchange rates unfavorably impacted Segment Adjusted EBITDA by approximately $0.7 million for the three months ended December 28, 2024 . 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 28, 2024 Net sales $ 2,419,236 $ 724,923 $ 731,003 $ 3,875,162 Segment Operating Income $ 574,772 $ 15,185 $ 168,405 $ 656,188 Operating Income % of net sales 23.8 % 2.1 % 23.0 % 16.9 % Depreciation 28,621 15,847 9,386 55,609 Amortization 49,133 7,214 8,091 64,438 Restructuring expenses 5,780 5,936 2,465 14,181 Acquisition related adjustments 455 326 55 836 Facility consolidation related expenses — 920 — 920 Charitable support to Ukraine — — — 474 Stock compensation — — — 36,151 Gain on sale of plant — — (1,139 ) (1,139 ) Impairments 5,197 28,162 — 38,637 Segment adjusted EBITDA (2) $ 663,958 $ 73,590 $ 187,263 $ 866,295 Adjusted EBITDA % of net sales 27.4 % 10.2 % 25.6 % 22.4 % 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 $ 699,420 $ 95,845 $ 179,335 $ 900,394 Adjusted EBITDA % of net sales 27.7 % 12.1 % 24.9 % 22.3 % (1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $58.5 million and $74.2 million for the twelve months ended December 28, 2024 and December 30, 2023 , respectively. (2) Foreign exchange rates unfavorably impacted Segment Adjusted EBITDA by $0.1 million for the twelve months ended December 28, 2024 . THE MIDDLEBY CORPORATION NON-GAAP INFORMATION (UNAUDITED) (Amounts in 000’s, Except Percentages) Three Months Ended 4th Qtr, 2024 4th Qtr, 2023 $ Diluted per share $ Diluted per share Net earnings $ 112,304 $ 2.07 $ 76,293 $ 1.42 Amortization (1) 17,557 0.32 20,218 0.38 Restructuring expenses 3,135 0.06 2,436 0.05 Acquisition related adjustments 3,632 0.07 (7,502 ) (0.14 ) Facility consolidation related expenses 402 0.01 — — Net periodic pension benefit (other than service costs & curtailment) (3,653 ) (0.07 ) (2,142 ) (0.04 ) Charitable support to Ukraine 12 — 8 — Impairments 38,637 0.71 78,114 1.45 Gain on sale of plant (1,139 ) (0.02 ) — — Income tax effect of pre-tax adjustments (15,583 ) (0.29 ) (24,665 ) (0.46 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — 0.02 — (0.01 ) Adjusted net earnings $ 155,304 $ 2.88 $ 142,760 $ 2.65 Diluted weighted average number of shares 54,334 53,768 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) (394 ) 73 Adjusted diluted weighted average number of shares 53,940 53,841 Twelve Months Ended 4th Qtr, 2024 4th Qtr, 2023 $ Diluted per share $ Diluted per share Net earnings $ 428,433 $ 7.90 $ 400,882 $ 7.41 Amortization (1) 71,565 1.32 82,188 1.52 Restructuring expenses 14,181 0.26 14,134 0.26 Acquisition related adjustments 836 0.02 (3,851 ) (0.07 ) Facility consolidation related expenses 920 0.02 — — Net periodic pension benefit (other than service costs & curtailment) (14,897 ) (0.27 ) (9,071 ) (0.17 ) Charitable support to Ukraine 474 0.01 615 0.01 Impairments 38,637 0.71 78,114 1.44 Gain on sale of plant (1,139 ) (0.02 ) — — Income tax effect of pre-tax adjustments (28,529 ) (0.53 ) (42,414 ) (0.78 ) Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) — 0.07 — 0.08 Adjusted net earnings $ 510,481 $ 9.49 $ 520,597 $ 9.70 Diluted weighted average number of shares 54,209 54,086 Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2) (418 ) (442 ) Adjusted diluted weighted average number of shares 53,791 53,644 (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, 2024 4th Qtr, 2023 4th Qtr, 2024 4th Qtr, 2023 Net Cash Flows Provided By (Used In): Operating activities $ 239,734 $ 255,687 $ 686,816 $ 628,790 Investing activities (114,536 ) (16,518 ) (158,535 ) (155,742 ) Financing activities (27,979 ) (165,171 ) (73,768 ) (390,939 ) Free Cash Flow Cash flow from operating activities $ 239,734 $ 255,687 $ 686,816 $ 628,790 Less: Capital expenditures, net sale of proceeds (10,634 ) (15,534 ) (46,803 ) (85,179 ) Free cash flow $ 229,100 $ 240,153 $ 640,013 $ 543,611 USE OF 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/20250225612081/en/ John Joyner , VP of Investor Relations, [email protected] Source: The Middleby Corporation

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