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The Middleby Corporation Reports Third Quarter Results

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 2021 third quarter of $176.0 million or $3.09 diluted earnings per share on net sales of $817.5 million. Adjusted net earnings were $106.4 million or $1.92 adjusted diluted earnings per share. A full reconciliation between GAAP and non-GAAP measures is provided at the end of the press release.

“We continue to build upon the positive momentum across our business segments -- investing in technology innovations to address the dynamic market trends, furthering our strategic sales initiatives, and expanding our brand portfolio with the recent acquisitions of Novy and Imperial Range,” said Tim FitzGerald CEO of the Middleby Corporation. “The demand for our solutions remains strong with record incoming orders and backlog. We are proactively managing through the current impact of supply chain disruptions and significant inflationary pressures, while we make progress toward our long-term profitability goals.”

2021 Third Quarter Financial Results

  • Net sales increased 28.8% in the third quarter over the comparative prior year period. Excluding the impacts of acquisitions, a disposition and foreign exchange rates, sales increased 22.4% in the third quarter over the comparative prior year period, reflecting improvements in market conditions and consumer demand since the initial impact of COVID-19.
  • Organic net sales (a non-GAAP measure) increases were reported for all segments due to improvements in market conditions and consumer demand in the third quarter of 2021. A reconciliation of reported net sales by segment is as follows:

 

Commercial Foodservice

 

Residential Kitchen

 

Food Processing

 

Total Company

Reported Net Sales Growth

37.8

%

 

26.7

%

 

1.8

%

 

28.8

%

Acquisitions/(Disposition)

4.9

%

 

9.9

%

 

%

 

5.1

%

Foreign Exchange Rates

1.0

%

 

2.6

%

 

0.5

%

 

1.3

%

Organic Net Sales Growth (1) (2)

31.9

%

 

14.2

%

 

1.4

%

 

22.4

%

(1) Organic net sales growth defined as total sales growth excluding impact of acquisitions, a disposition and foreign exchange rates

(2) Totals may be impacted by rounding

  • Total backlog at the end of the third quarter of 2021 amounted to a record level of $1.2 billion as compared to $522.7 million at the end of the fiscal 2020. The increase was driven by order growth, primarily at the Commercial Foodservice Group and Residential Kitchen Group, amounting to backlog levels in excess of 100% over the prior year end when excluding backlog from businesses acquired during the year.
  • Adjusted EBITDA (a non-GAAP measure) was $172.2 million, in the third quarter of 2021 due to the impact of higher sales volumes and profitability initiatives. A reconciliation of organic adjusted EBITDA (a non-GAAP measure) by segment is as follows:

 

Commercial Foodservice

 

Residential Kitchen

 

Food Processing

 

Total Company

Adjusted EBITDA

24.4

%

 

20.9

%

 

21.8

%

 

21.1

%

Acquisitions

(0.1)

%

 

0.4

%

 

%

 

0.1

%

Foreign Exchange Rates

%

 

(0.1)

%

 

%

 

%

Organic Adjusted EBITDA (1) (2)

24.5

%

 

20.6

%

 

21.8

%

 

21.0

%

 

 

 

 

 

 

 

 

(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 inflows during the third quarter amounted to $173.7 million in comparison to $151.4 million in the prior year period. During three months period ended October 2, 2021, the company received net of taxes and deal costs, approximately $77.3 million in a termination fee. The total leverage ratio per our credit agreements was below 2.4x. The trailing twelve month bank agreement pro-forma EBITDA was $735.9 million.
  • Cash balances at the end of the quarter were $251.5 million. Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2021 fiscal third quarter amounted to $1.6 billion as compared to $1.6 billion at the end of fiscal 2020. Additionally, our current borrowing availability is approximately $2.3 billion.

“Across all three segments, we experienced strong demand and continued growth of incoming orders. This reflects the strength of overall market demand, along with the increasing interest in our technology solutions and innovative products to address our customer's rapidly changing needs. While we are excited that our positioning will drive future growth opportunities, we are heavily focused on managing through the current supply chain challenges. Component part availability, shipping delays, rising costs of material, and labor are all major challenges for our industry. Our teams are actively engaged with our supply partners as we look to secure supply for production and increase capacity. We have been proactive about adjusting prices in the past several months to our customers, to address the significant cost pressures we have experienced during the third quarter that are pressuring margins. The timing from the benefit of these increases is longer than ordinary given our record backlog, but we should begin seeing this impact in the fourth quarter.”

"At Commercial Foodservice, we are seeing the continued recovery broadened across all customer segments as we emerge from COVID. This presents a strong current demand environment as our customers are looking to re-open, replace and/or upgrade equipment. The industry is also facing substantial operating challenges around labor, food costs, and rapidly changing consumer trends which is accelerating the drive for new technologies and innovative solutions. We are increasing our engagement with customers looking to evolve their operations to address these challenges. The technology investments we continue to make will drive long-term growth beyond the recovery.”

“At our Residential Kitchen businesses, the market for new home starts and existing sales remains strong -- presenting a continued favorable backdrop for our business as we look toward next year. We continue to expand our portfolio of premium brands and bring exciting new products to consumers. We are focused on deepening our engagement and support of the residential designer community as we raise awareness of the breadth of offerings across our luxury portfolio.”

“At the Food Processing Group, our investments in automation and full-line solutions are resonating with customers and addressing today’s challenges of labor, food costs, safety and sustainability. Investments we have made in our innovation centers allow our customers to have a hands-on experience as they make critical decisions to invest in their operations. We continue to gain momentum in new and target markets such as bacon, dried meats, pet food and alternative protein, as we are positioned to capture growing trends,” concluded Mr. FitzGerald.

Conference Call

A conference call will be held at 10 a.m. Central Time on Tuesday, November 9 and can be accessed through the Investor Relations section of middleby.com. If online access is not available, participants can join the call by dialing (888) 391-6937 or (315) 625-3077 and providing conference code 7707299#. A replay of the conference call will be available two hours after the conclusion of the call by dialing (855) 859-2056 and entering conference code 7707299#. To access the supplemental presentation, visit the Investor Relations page at middleby.com.

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 equipment industry. The company develops, manufactures, markets and services a broad line of equipment used in the commercial foodservice, food processing, and residential kitchen equipment industries. The company's leading equipment brands serving the commercial foodservice industry include Anets®, APW Wyott®, Bakers Pride®, Beech®, BKI®, Blodgett®, Blodgett Combi®, Bloomfield®, Britannia®, Carter-Hoffmann®, Celfrost®, Concordia®, CookTek®, Crown®, CTX®, Desmon®, Deutsche Beverage®, Doyon®, Eswood®, EVO®, Firex®, Follett®, frifri®, Globe®, Goldstein®, Holman®, Houno®, IMC®, Imperial®, Induc®, Ink Kegs®, Inline Filling Systems®, Jade®, JoeTap®, Josper®, L2F®, Lang®, Lincat®, MagiKitch’n®, Market Forge®, Marsal®, Meheen®, Middleby Marshall®, MPC®, Nieco®, Nu-Vu®, PerfectFry®, Pitco®, QualServ®, RAM®, Southbend®, Ss Brewtech®, Star®, Starline®, Sveba Dahlen®, Synesso®, Tank®, Taylor®, Thor®, Toastmaster®, TurboChef®, Ultrafryer®, Varimixer®, Wells® Wild Goose® and Wunder-Bar®. The company’s leading equipment brands serving the food processing industry include Alkar®, Armor Inox®, Auto-Bake®, Baker Thermal Solutions®, Burford®, Cozzini®, CV-Tek ®, Danfotech®, Deutsche Process®, Drake®, Glimek®, Hinds-Bock®, Maurer-Atmos®, MP Equipment®, Pacproinc®, RapidPak®, Scanico®, Spooner Vicars®, Stewart Systems®, Thurne® and Ve.Ma.C.®. The company’s leading equipment brands serving the residential kitchen industry include AGA®, AGA Cookshop®, Brava®, EVO®, La Cornue®, Leisure Sinks®, Lynx®, Marvel®, Mercury®, Novy®, Rangemaster®, Rayburn®, Redfyre®, Sedona®, Stanley®, TurboChef®, U-Line® and Viking®.

 

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, 2021

 

3rd Qtr, 2020

 

3rd Qtr, 2021

 

3rd Qtr, 2020

Net sales

$

817,545

 

 

 

$

634,525

 

 

 

$

2,384,376

 

 

 

$

1,783,961

 

 

Cost of sales

517,918

 

 

 

411,776

 

 

 

1,505,149

 

 

 

1,157,896

 

 

 

 

 

 

 

 

 

 

Gross profit

299,627

 

 

 

222,749

 

 

 

879,227

 

 

 

626,065

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

175,354

 

 

 

128,814

 

 

 

496,022

 

 

 

384,580

 

 

Restructuring expenses

791

 

 

 

7,263

 

 

 

2,596

 

 

 

10,281

 

 

Merger termination fee

(110,000

)

 

 

 

 

 

(110,000

)

 

 

 

 

Gain on sale of plant

 

 

 

 

 

 

(763

)

 

 

 

 

Income from operations

233,482

 

 

 

86,672

 

 

 

491,372

 

 

 

231,204

 

 

 

 

 

 

 

 

 

 

Interest expense and deferred financing amortization, net

13,192

 

 

 

18,418

 

 

 

43,481

 

 

 

55,881

 

 

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

(11,363

)

 

 

(10,149

)

 

 

(34,268

)

 

 

(30,004

)

 

Other expense (income), net

794

 

 

 

(294

)

 

 

(1,366

)

 

 

3,414

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

230,859

 

 

 

78,697

 

 

 

483,525

 

 

 

201,913

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

54,893

 

 

 

18,181

 

 

 

97,711

 

 

 

46,456

 

 

 

 

 

 

 

 

 

 

Net earnings

$

175,966

 

 

 

$

60,516

 

 

 

$

385,814

 

 

 

$

155,457

 

 

 

 

 

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

3.19

 

 

 

$

1.10

 

 

 

$

6.99

 

 

 

$

2.82

 

 

 

 

 

 

 

 

 

 

Diluted

$

3.09

 

 

 

$

1.10

 

 

 

$

6.83

 

 

 

$

2.82

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

55,232

 

 

 

54,982

 

 

 

55,225

 

 

 

55,104

 

 

 

 

 

 

 

 

 

 

Diluted

56,939

 

 

 

55,100

 

 

 

56,526

 

 

 

55,152

 

 

 

THE MIDDLEBY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in 000’s)

(Unaudited)

 

 

Oct 2, 2021

 

Jan 2, 2021

ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

$

251,476

 

 

$

268,103

 

Accounts receivable, net

466,487

 

 

363,361

 

Inventories, net

686,043

 

 

540,198

 

Prepaid expenses and other

82,582

 

 

81,049

 

Prepaid taxes

21,149

 

 

17,782

 

Total current assets

1,507,737

 

 

1,270,493

 

 

 

 

 

Property, plant and equipment, net

370,266

 

 

344,482

 

Goodwill

2,106,182

 

 

1,934,261

 

Other intangibles, net

1,574,601

 

 

1,450,381

 

Long-term deferred tax assets

83,589

 

 

76,052

 

Other assets

130,476

 

 

126,805

 

 

 

 

 

Total assets

$

5,772,851

 

 

$

5,202,474

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Current maturities of long-term debt

$

21,553

 

 

$

22,944

 

Accounts payable

254,287

 

 

182,773

 

Accrued expenses

546,996

 

 

494,541

 

Total current liabilities

822,836

 

 

700,258

 

 

 

 

 

Long-term debt

1,866,022

 

 

1,706,652

 

Long-term deferred tax liability

165,100

 

 

147,224

 

Accrued pension benefits

432,909

 

 

469,500

 

Other non-current liabilities

187,014

 

 

202,191

 

 

 

 

 

Stockholders' equity

2,298,970

 

 

1,976,649

 

 

 

 

 

Total liabilities and stockholders' equity

$

5,772,851

 

 

$

5,202,474

 

 

THE MIDDLEBY CORPORATION

NON-GAAP SEGMENT INFORMATION (UNAUDITED)

(Amounts in 000’s, Except Percentages)

 

 

Commercial Foodservice

 

Residential Kitchen

 

Food Processing

 

Total Company (1)

Three Months Ended October 2, 2021

 

 

 

 

 

 

 

Net sales

$

511,480

 

 

$

193,395

 

 

$

112,670

 

 

$

817,545

 

Segment Operating Income

$

105,529

 

 

$

31,322

 

 

$

21,425

 

 

$

233,482

 

Operating Income % of net sales

20.6

%

 

16.2

%

 

19.0

%

 

28.6

%

 

 

 

 

 

 

 

 

Depreciation

5,793

 

 

3,608

 

 

1,353

 

 

10,876

 

Amortization

12,822

 

 

3,589

 

 

1,773

 

 

18,184

 

Restructuring expenses

473

 

 

278

 

 

40

 

 

791

 

Acquisition related inventory step-up charge

66

 

 

1,676

 

 

 

 

1,742

 

Merger termination fee, net deal costs

 

 

 

 

 

 

(103,106

)

Stock compensation

 

 

 

 

 

 

10,197

 

Segment adjusted EBITDA

$

124,683

 

 

$

40,473

 

 

$

24,591

 

 

$

172,166

 

Adjusted EBITDA % of net sales

24.4

%

 

20.9

%

 

21.8

%

 

21.1

%

 

 

 

 

 

 

 

 

Three Months Ended September 26, 2020

 

 

 

 

 

 

 

Net sales

$

371,223

 

 

$

152,654

 

 

$

110,648

 

 

$

634,525

 

Segment Operating Income

$

57,483

 

 

$

22,626

 

 

$

22,860

 

 

$

86,672

 

Operating Income % of net sales

15.5

%

 

14.8

%

 

20.7

%

 

13.7

%

 

 

 

 

 

 

 

 

Depreciation

5,360

 

 

2,965

 

 

1,480

 

 

9,805

 

Amortization

12,923

 

 

2,170

 

 

1,794

 

 

16,887

 

Restructuring expenses

6,969

 

 

138

 

 

156

 

 

7,263

 

Facility consolidation related expenses

574

 

 

 

 

 

 

574

 

Stock compensation

 

 

 

 

 

 

5,300

 

Segment adjusted EBITDA

$

83,309

 

 

$

27,899

 

 

$

26,290

 

 

$

126,501

 

Adjusted EBITDA % of net sales

22.4

%

 

18.3

%

 

23.8

%

 

19.9

%

(1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $17.6 million and $11.0 million for the three months ended October 2, 2021 and September 26, 2020, respectively.

 

 

 

 

 

 

 

 

THE MIDDLEBY CORPORATION

NON-GAAP SEGMENT INFORMATION (UNAUDITED)

(Amounts in 000’s, Except Percentages)

 

 

 

 

 

 

 

 

 

Commercial Foodservice

 

Residential Kitchen

 

Food Processing

 

Total Company (1)

Nine Months Ended October 2, 2021

 

 

 

 

 

 

 

Net sales

$

1,501,413

 

 

$

527,791

 

 

$

355,172

 

 

$

2,384,376

 

Segment Operating Income

$

311,789

 

 

$

95,088

 

 

$

68,048

 

 

$

491,372

 

Operating Income % of net sales

20.8

%

 

18.0

%

 

19.2

%

 

20.6

%

 

 

 

 

 

 

 

 

Depreciation

17,579

 

 

9,120

 

 

4,005

 

 

31,180

 

Amortization

42,272

 

 

7,145

 

 

5,450

 

 

54,867

 

Restructuring expenses

1,386

 

 

834

 

 

376

 

 

2,596

 

Facility consolidation related expenses

993

 

 

 

 

 

 

993

 

Acquisition related inventory step-up charge

803

 

 

1,676

 

 

 

 

2,479

 

Merger termination fee, net deal costs

 

 

 

 

 

 

(90,285

)

Stock compensation

 

 

 

 

 

 

27,135

 

Gain on sale of plant

(678

)

 

(85

)

 

 

 

(763

)

Segment adjusted EBITDA

$

374,144

 

 

$

113,778

 

 

$

77,879

 

 

$

519,574

 

Adjusted EBITDA % of net sales

24.9

%

 

21.6

%

 

21.9

%

 

21.8

%

 

 

 

 

 

 

 

 

Nine Months Ended September 26, 2020

 

 

 

 

 

 

 

Net sales

$

1,081,847

 

 

$

385,637

 

 

$

316,477

 

 

$

1,783,961

 

Segment Operating Income

$

173,064

 

 

$

41,860

 

 

$

57,801

 

 

$

231,204

 

Operating Income % of net sales

16.0

%

 

10.9

%

 

18.3

%

 

13.0

%

 

 

 

 

 

 

 

 

Depreciation

15,567

 

 

8,742

 

 

4,179

 

 

28,503

 

Amortization

38,257

 

 

7,627

 

 

5,494

 

 

51,378

 

Restructuring expenses

9,115

 

 

973

 

 

193

 

 

10,281

 

Facility consolidation related expenses

848

 

 

 

 

 

 

848

 

Acquisition related inventory step-up charge

2,106

 

 

 

 

 

 

2,106

 

Stock compensation

 

 

 

 

 

 

14,422

 

Segment adjusted EBITDA

$

238,957

 

 

$

59,202

 

 

$

67,667

 

 

$

338,742

 

Adjusted EBITDA % of net sales

22.1

%

 

15.4

%

 

21.4

%

 

19.0

%

(1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $46.2 million and $27.1 million for the nine months ended October 2, 2021 and September 26, 2020, respectively.

 

THE MIDDLEBY CORPORATION

NON-GAAP INFORMATION (UNAUDITED)

(Amounts in 000’s, Except Percentages)

 

 

Three Months Ended

 

3rd Qtr, 2021

 

3rd Qtr, 2020

 

$

 

Diluted per share

 

$

 

Diluted per share

Net earnings

$

175,966

 

 

 

$

3.09

 

 

 

$

60,516

 

 

 

$

1.10

 

 

Amortization (1)

19,754

 

 

 

0.35

 

 

 

17,861

 

 

 

0.32

 

 

Amortization of discount on convertible notes

 

 

 

 

 

 

1,848

 

 

 

0.03

 

 

Restructuring expenses

791

 

 

 

0.01

 

 

 

7,263

 

 

 

0.13

 

 

Acquisition related inventory step-up charge

1,742

 

 

 

0.03

 

 

 

 

 

 

 

 

Facility consolidation related expenses

 

 

 

 

 

 

574

 

 

 

0.01

 

 

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

(11,363

)

 

 

(0.20

)

 

 

(10,149

)

 

 

(0.18

)

 

Merger termination fee, net deal costs

(103,106

)

 

 

(1.81

)

 

 

 

 

 

 

 

Income tax effect of pre-tax adjustments

22,584

 

 

 

0.40

 

 

 

(4,019

)

 

 

(0.07

)

 

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

 

 

 

0.05

 

 

 

 

 

 

 

 

Adjusted net earnings

$

106,368

 

 

 

$

1.92

 

 

 

$

73,894

 

 

 

$

1.34

 

 

 

 

 

 

 

 

 

 

Diluted weighted average number of shares

56,939

 

 

 

 

 

55,100

 

 

 

 

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

(1,679

)

 

 

 

 

 

 

 

 

Adjusted diluted weighted average number of shares

55,260

 

 

 

 

 

55,100

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

3rd Qtr, 2021

 

3rd Qtr, 2020

 

$

 

Diluted per share

 

$

 

Diluted per share

Net earnings

$

385,814

 

 

 

$

6.83

 

 

 

$

155,457

 

 

 

$

2.82

 

 

Amortization (1)

59,492

 

 

 

1.05

 

 

 

53,373

 

 

 

0.97

 

 

Amortization of discount on convertible notes

 

 

 

 

 

 

1,848

 

 

 

0.03

 

 

Restructuring expenses

2,596

 

 

 

0.05

 

 

 

10,281

 

 

 

0.19

 

 

Acquisition related inventory step-up charge

2,479

 

 

 

0.04

 

 

 

2,106

 

 

 

0.04

 

 

Facility consolidation related expenses

993

 

 

 

0.02

 

 

 

848

 

 

 

0.02

 

 

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

(34,268

)

 

 

(0.61

)

 

 

(30,004

)

 

 

(0.54

)

 

Merger termination fee, net deal costs

(90,285

)

 

 

(1.60

)

 

 

 

 

 

 

 

Gain on sale of plant

(763

)

 

 

(0.01

)

 

 

 

 

 

 

 

Discrete tax adjustments

(18,900

)

 

 

(0.33

)

 

 

 

 

 

 

 

Income tax effect of pre-tax adjustments

14,640

 

 

 

0.26

 

 

 

(8,844

)

 

 

(0.17

)

 

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

 

 

 

0.13

 

 

 

 

 

 

 

 

Adjusted net earnings

$

321,798

 

 

 

$

5.83

 

 

 

$

185,065

 

 

 

$

3.36

 

 

 

 

 

 

 

 

 

 

Diluted weighted average number of shares

56,526

 

 

 

 

 

55,152

 

 

 

 

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

(1,284

)

 

 

 

 

 

 

 

 

Adjusted diluted weighted average number of shares

55,242

 

 

 

 

 

55,152

 

 

 

 

(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, 2021

 

3rd Qtr, 2020

 

3rd Qtr, 2021

 

3rd Qtr, 2020

Net Cash Flows Provided By (Used In):

 

 

 

 

 

 

 

Operating activities

$

173,659

 

 

 

$

151,422

 

 

 

$

346,040

 

 

 

$

316,182

 

 

Investing activities

(388,457

)

 

 

(10,358

)

 

 

(412,679

)

 

 

(53,539

)

 

Financing activities

73,092

 

 

 

(573,169

)

 

 

54,361

 

 

 

(134,838

)

 

 

 

 

 

 

 

 

 

Free Cash Flow

 

 

 

 

 

 

 

Cash flow from operating activities

$

173,659

 

 

 

$

151,422

 

 

 

$

346,040

 

 

 

$

316,182

 

 

Less: Capital expenditures, net of sale proceeds

(10,307

)

 

 

(7,064

)

 

 

(23,670

)

 

 

(20,395

)

 

Free cash flow

$

163,352

 

 

 

$

144,358

 

 

 

$

322,370

 

 

 

$

295,787

 

 

 

 

 

 

 

 

 

 

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.

Contacts

Darcy Bretz, Investor and Public Relations, (847) 429-7756

Bryan Mittelman, Chief Financial Officer, (847) 429-7715

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