MIDD Middleby Corp

• Net sales of $943 million
• Diluted earnings per share of $2.11 and adjusted net earnings per share of $2.33
• Operating income of $173 million and 18.4% of net sales
• Adjusted EBITDA of $213 million and organic adjusted EBITDA margin of 22.6%
• Operating cash flows of $157 million
• Net leverage reduced to 2.2x
• Completed the acquisition of Emery Thompson

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 2024.

"Unfavorable macro-economic conditions continued in the third quarter and grew even more challenging in our commercial foodservice segment. Lower restaurant traffic and higher food costs in recent months have put pressure on the restaurant industry. This has resulted in a greater than expected delay in facility investments and in the permanent closure of locations. As we navigate the current environment and near-term revenue decline, we remain disciplined with strong levels of profitability and cash flow.

We have continued to resiliently execute on our strategic initiatives focused on the launch of industry leading product innovations and differentiated go-to market capabilities, which have us uniquely positioned and are confident will drive long-term profitable growth. The pipeline of opportunities with customers and new product innovations continues to build, while customer engagement remains at an all-time high. We anticipate the challenging current industry macro-conditions will improve in 2025 and will lead into a multi-year recovery favorably supporting growth at all three of our foodservice segments,” said Tim FitzGerald, CEO of The Middleby Corporation.

2024 Third Quarter Financial Results

• Net sales decreased 3.9% in the third quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales decreased 4.1% in the third 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

(5.3

)%

 

(3.8

)%

 

1.7

%

 

(3.9

)%

Acquisitions

—

%

 

0.1

%

 

0.8

%

 

0.2

%

Foreign Exchange Rates

(0.1

)%

 

0.6

%

 

0.2

%

 

0.1

%

Organic Net Sales Growth (1) (2)

(5.3

)%

 

(4.5

)%

 

0.7

%

 

(4.1

)%

(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 was $173.4 million in the third quarter compared to $174.4 million in the prior year period.

• Adjusted EBITDA (a non-GAAP measure) was $213.0 million in the third quarter compared to $225.1 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

27.5

%

 

12.0

%

 

24.3

%

 

22.6

%

Acquisitions

—

%

 

—

%

 

(0.4

)%

 

(0.1

)%

Foreign Exchange Rates

0.1

%

 

0.1

%

 

0.1

%

 

0.1

%

Organic Adjusted EBITDA (1) (2)

27.4

%

 

11.9

%

 

24.6

%

 

22.6

%

(1) Organic Adjusted EBITDA defined as Adjusted EBITDA excluding impact of acquisitions and foreign exchange rates.

(2) Totals may be impacted by rounding

• Operating cash flows during the third quarter amounted to $156.7 million in comparison to $219.2 million in the prior year period. The total leverage ratio per our credit agreements was 2.2x. The trailing twelve month bank agreement pro-forma EBITDA was $863.3 million.

• Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2024 fiscal third quarter amounted to $1.8 billion as compared to $2.2 billion at the end of fiscal 2023. Our borrowing availability at the end of the third quarter was approximately $2.8 billion.

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 October 31. 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

 

Nine Months Ended

 

3rd Qtr, 2024

 

3rd Qtr, 2023

 

3rd Qtr, 2024

 

3rd Qtr, 2023

Net sales

$

942,809

 

 

$

980,651

 

 

$

2,861,281

 

 

$

3,028,029

 

Cost of sales

 

587,375

 

 

 

605,329

 

 

 

1,779,847

 

 

 

1,880,736

 

 

 

 

 

 

 

 

 

Gross profit

 

355,434

 

 

 

375,322

 

 

 

1,081,434

 

 

 

1,147,293

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

179,476

 

 

 

196,433

 

 

 

584,108

 

 

 

615,361

 

Restructuring expenses

 

2,519

 

 

 

4,448

 

 

 

11,046

 

 

 

11,698

 

Income from operations

 

173,439

 

 

 

174,441

 

 

 

486,280

 

 

 

520,234

 

 

 

 

 

 

 

 

 

Interest expense and deferred financing amortization, net

 

21,399

 

 

 

31,080

 

 

 

72,239

 

 

 

92,071

 

Net periodic pension benefit (other than service costs & curtailment)

 

(3,876

)

 

 

(2,103

)

 

 

(11,244

)

 

 

(6,929

)

Other expense (income), net

 

1,239

 

 

 

1,072

 

 

 

995

 

 

 

2,642

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

154,677

 

 

 

144,392

 

 

 

424,290

 

 

 

432,450

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

40,511

 

 

 

35,742

 

 

 

108,161

 

 

 

107,861

 

 

 

 

 

 

 

 

 

Net earnings

$

114,166

 

 

$

108,650

 

 

$

316,129

 

 

$

324,589

 

 

 

 

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

2.12

 

 

$

2.03

 

 

$

5.88

 

 

$

6.06

 

 

 

 

 

 

 

 

 

Diluted

$

2.11

 

 

$

2.01

 

 

$

5.84

 

 

$

5.99

 

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

53,770

 

 

 

53,588

 

 

 

53,730

 

 

 

53,569

 

 

 

 

 

 

 

 

 

Diluted

 

54,037

 

 

 

54,157

 

 

 

54,168

 

 

 

54,192

 

THE MIDDLEBY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in 000’s)

(Unaudited)

 

 

Sep 28, 2024

 

Dec 30, 2023

ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

$

606,004

 

$

247,496

Accounts receivable, net

 

614,976

 

 

644,576

Inventories, net

 

905,865

 

 

935,867

Prepaid expenses and other

 

134,364

 

 

112,690

Prepaid taxes

 

30,401

 

 

25,230

Total current assets

 

2,291,610

 

 

1,965,859

 

 

 

 

Property, plant and equipment, net

 

510,555

 

 

510,898

Goodwill

 

2,506,810

 

 

2,486,310

Other intangibles, net

 

1,650,962

 

 

1,693,076

Long-term deferred tax assets

 

6,915

 

 

7,945

Pension benefits assets

 

54,887

 

 

38,535

Other assets

 

179,342

 

 

204,069

 

 

 

 

Total assets

$

7,201,081

 

$

6,906,692

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Current maturities of long-term debt

$

44,058

 

$

44,822

Accounts payable

 

214,699

 

 

227,080

Accrued expenses

 

555,955

 

 

579,192

Total current liabilities

 

814,712

 

 

851,094

 

 

 

 

Long-term debt

 

2,361,252

 

 

2,380,373

Long-term deferred tax liability

 

241,107

 

 

216,143

Accrued pension benefits

 

11,665

 

 

12,128

Other non-current liabilities

 

179,404

 

 

197,065

 

 

 

 

Stockholders' equity

 

3,592,941

 

 

3,249,889

 

 

 

 

Total liabilities and stockholders' equity

$

7,201,081

 

$

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 September 28, 2024

 

 

 

 

 

 

 

Net sales

$

600,068

 

 

$

173,218

 

 

$

169,523

 

 

$

942,809

 

Segment Operating Income

$

146,088

 

 

$

13,170

 

 

$

37,497

 

 

$

173,439

 

Operating Income % of net sales

 

24.3

%

 

 

7.6

%

 

 

22.1

%

 

 

18.4

%

 

 

 

 

 

 

 

 

Depreciation

 

7,115

 

 

 

3,906

 

 

 

2,504

 

 

 

13,975

 

Amortization

 

11,479

 

 

 

1,814

 

 

 

1,736

 

 

 

15,029

 

Restructuring expenses

 

1,247

 

 

 

1,115

 

 

 

157

 

 

 

2,519

 

Acquisition related adjustments

 

(957

)

 

 

219

 

 

 

(717

)

 

 

(1,455

)

Facility consolidation related expenses

 

—

 

 

 

510

 

 

 

—

 

 

 

510

 

Charitable support to Ukraine

 

—

 

 

 

—

 

 

 

—

 

 

 

286

 

Stock compensation

 

—

 

 

 

—

 

 

 

—

 

 

 

8,669

 

Segment adjusted EBITDA (2)

$

164,972

 

 

$

20,734

 

 

$

41,177

 

 

$

212,972

 

Adjusted EBITDA % of net sales

 

27.5

%

 

 

12.0

%

 

 

24.3

%

 

 

22.6

%

 

 

 

 

 

 

 

 

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

 

599

 

 

 

337

 

 

 

469

 

 

 

1,405

 

Charitable support to Ukraine

 

—

 

 

 

—

 

 

 

—

 

 

 

118

 

Stock compensation

 

—

 

 

 

—

 

 

 

—

 

 

 

13,175

 

Segment adjusted EBITDA

$

180,733

 

 

$

19,709

 

 

$

43,481

 

 

$

225,091

 

Adjusted EBITDA % of net sales

 

28.5

%

 

 

11.0

%

 

 

26.1

%

 

 

23.0

%

 

 

 

 

 

 

 

 

(1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $13.9 million and $18.8 million for the three months ended September 28, 2024 and September 30, 2023, respectively.

(2) Foreign exchange rates favorably impacted Segment Adjusted EBITDA by approximately $0.7 million for the three months ended September 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)

Nine Months Ended September 28, 2024

 

 

 

 

 

 

 

Net sales

$

1,809,790

 

 

$

539,881

 

 

$

511,610

 

 

$

2,861,281

 

Segment Operating Income

$

429,459

 

 

$

27,840

 

 

$

110,333

 

 

$

486,280

 

Operating Income % of net sales

 

23.7

%

 

 

5.2

%

 

 

21.6

%

 

 

17.0

%

 

 

 

 

 

 

 

 

Depreciation

 

21,043

 

 

 

11,680

 

 

 

6,811

 

 

 

40,829

 

Amortization

 

37,801

 

 

 

5,415

 

 

 

5,451

 

 

 

48,667

 

Restructuring expenses

 

4,850

 

 

 

3,990

 

 

 

2,206

 

 

 

11,046

 

Acquisition related adjustments

 

(271

)

 

 

(2

)

 

 

(2,523

)

 

 

(2,796

)

Facility consolidation related expenses

 

 

 

518

 

 

 

—

 

 

 

518

 

Charitable support to Ukraine

 

—

 

 

 

—

 

 

 

—

 

 

 

462

 

Stock compensation

 

—

 

 

 

—

 

 

 

—

 

 

 

30,139

 

Segment adjusted EBITDA (2)

$

492,882

 

 

$

49,441

 

 

$

122,278

 

 

$

615,145

 

Adjusted EBITDA % of net sales

 

27.2

%

 

 

9.2

%

 

 

23.9

%

 

 

21.5

%

 

 

 

 

 

 

 

 

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

 

2,332

 

 

 

44

 

 

 

1,275

 

 

 

3,651

 

Charitable support to Ukraine

 

—

 

 

 

—

 

 

 

—

 

 

 

607

 

Stock compensation

 

—

 

 

 

—

 

 

 

—

 

 

 

35,305

 

Segment adjusted EBITDA

$

520,142

 

 

$

76,263

 

 

$

126,470

 

 

$

665,202

 

Adjusted EBITDA % of net sales

 

27.5

%

 

 

12.6

%

 

 

23.9

%

 

 

22.0

%

 

 

 

 

 

 

 

 

(1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $49.5 million and $57.7 million for the nine months ended September 28, 2024 and September 30, 2023, respectively.

(2) Foreign exchange rates favorably impacted Segment Adjusted EBITDA by $0.6 million for the nine months ended September 28, 2024.

THE MIDDLEBY CORPORATION

NON-GAAP INFORMATION (UNAUDITED)

(Amounts in 000’s, Except Percentages)

 

 

Three Months Ended

 

3rd Qtr, 2024

 

3rd Qtr, 2023

 

$

 

Diluted per share

 

$

 

Diluted per share

Net earnings

$

114,166

 

 

$

2.11

 

 

$

108,650

 

 

$

2.01

 

Amortization (1)

 

16,805

 

 

 

0.31

 

 

 

20,693

 

 

 

0.38

 

Restructuring expenses

 

2,519

 

 

 

0.05

 

 

 

4,448

 

 

 

0.08

 

Acquisition related adjustments

 

(1,455

)

 

 

(0.03

)

 

 

1,405

 

 

 

0.03

 

Facility consolidation related expenses

 

510

 

 

 

0.01

 

 

 

—

 

 

 

—

 

Net periodic pension benefit (other than service costs & curtailment)

 

(3,876

)

 

 

(0.07

)

 

 

(2,103

)

 

 

(0.04

)

Charitable support to Ukraine

 

286

 

 

 

0.01

 

 

 

118

 

 

 

—

 

Income tax effect of pre-tax adjustments

 

(3,875

)

 

 

(0.07

)

 

 

(6,091

)

 

 

(0.11

)

Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2)

 

—

 

 

 

0.01

 

 

 

—

 

 

 

0.02

 

Adjusted net earnings

$

125,080

 

 

$

2.33

 

 

$

127,120

 

 

$

2.37

 

 

 

 

 

 

 

 

 

Diluted weighted average number of shares

 

54,037

 

 

 

 

 

54,157

 

 

 

Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2)

 

(243

)

 

 

 

 

(550

)

 

 

Adjusted diluted weighted average number of shares

 

53,794

 

 

 

 

 

53,607

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

3rd Qtr, 2024

 

3rd Qtr, 2023

 

$

 

Diluted per share

 

$

 

Diluted per share

Net earnings

$

316,129

 

 

$

5.84

 

 

$

324,589

 

 

$

5.99

 

Amortization (1)

 

54,008

 

 

 

1.00

 

 

 

61,970

 

 

 

1.14

 

Restructuring expenses

 

11,046

 

 

 

0.20

 

 

 

11,698

 

 

 

0.22

 

Acquisition related adjustments

 

(2,796

)

 

 

(0.05

)

 

 

3,651

 

 

 

0.07

 

Facility consolidation related expenses

 

518

 

 

 

0.01

 

 

 

—

 

 

 

—

 

Net periodic pension benefit (other than service costs & curtailment)

 

(11,244

)

 

 

(0.21

)

 

 

(6,929

)

 

 

(0.13

)

Charitable support to Ukraine

 

462

 

 

 

0.01

 

 

 

607

 

 

 

0.01

 

Income tax effect of pre-tax adjustments

 

(13,258

)

 

 

(0.24

)

 

 

(17,678

)

 

 

(0.33

)

Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2)

 

—

 

 

 

0.04

 

 

 

—

 

 

 

0.08

 

Adjusted net earnings

$

354,865

 

 

$

6.60

 

 

$

377,908

 

 

$

7.05

 

 

 

 

 

 

 

 

 

Diluted weighted average number of shares

 

54,168

 

 

 

 

 

54,192

 

 

 

Adjustment for shares excluded due to anti-dilution effect on GAAP net earnings (2)

 

(427

)

 

 

 

 

(614

)

 

 

Adjusted diluted weighted average number of shares

 

53,741

 

 

 

 

 

53,578

 

 

 

 

(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, 2024

 

3rd Qtr, 2023

 

3rd Qtr, 2024

 

3rd Qtr, 2023

Net Cash Flows Provided By (Used In):

 

 

 

 

 

 

 

Operating activities

$

156,665

 

 

$

219,153

 

 

$

447,082

 

 

$

373,103

 

Investing activities

 

(13,682

)

 

 

(53,958

)

 

 

(43,999

)

 

 

(139,224

)

Financing activities

 

(3,114

)

 

 

(150,533

)

 

 

(45,789

)

 

 

(225,768

)

 

 

 

 

 

 

 

 

Free Cash Flow

 

 

 

 

 

 

 

Cash flow from operating activities

$

156,665

 

 

$

219,153

 

 

$

447,082

 

 

$

373,103

 

Less: Capital expenditures

 

(11,489

)

 

 

(21,330

)

 

 

(36,169

)

 

 

(69,645

)

Free cash flow

$

145,176

 

 

$

197,823

 

 

$

410,913

 

 

$

303,458

 

 

 

 

 

 

 

 

 

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/20241031451923/en/

John Joyner, VP of Investor Relations, jjoyner@middleby.com