The Middleby Corporation Reports Record Fourth Quarter Results

February 21, 2023
  • Revenue of $1,032 million, a 19.1% increase year over year
  • Diluted Earnings per share of $2.45 and adjusted net earnings per share of $2.57, an increase of 21.8% year over year
  • Adjusted EBITDA of $234 million, a 21.0% increase year over year
  • Profitability grew to an organic adjusted EBITDA margin of 23.8%
  • Completed the acquisition of Escher, a complement to Middleby’s offerings in bakery innovation
  • Completed the acquisition of Marco, expanding Middleby’s beverage dispensing solutions

ELGIN, Ill.--(BUSINESS WIRE)--Feb. 21, 2023-- 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 2022.

“We are pleased with the results delivered in the fourth quarter and proud of our accomplishments for the year. Our team made great progress in 2022 moving forward our strategic and operating initiatives. We are excited about the many industry-leading innovations we have introduced over the past year and the robust pipeline of products we are launching in 2023. The investments we are making to evolve our go-to-market initiatives are paying dividends, as we have expanded the capabilities of our sales teams, deepened the relationships with our channel partners, and increased our engagement with end-user customers. The meaningful capital investments we have made in our operations have positioned us for increased manufacturing capacity and expected improvements in production efficiencies. In 2022, we also continued to execute our long-standing acquisition strategy -- adding eight brands to our portfolio and many exciting products complementing our commercial, food-processing and residential businesses. We are confident our execution of these strategic initiatives is positioning us for long-term growth and progressing us toward the profitability targets we have established for each of our three industry-leading foodservice segments,” said Tim FitzGerald, CEO of The Middleby Corporation.

2022 Fourth Quarter Financial Results

  • Net sales increased 19.1% in the fourth quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales increased 14.0% in the fourth quarter over the comparative prior year period, reflecting higher shipments as we realize benefits of investments to increase our production throughput.
  • Organic net sales (a non-GAAP measure) increases were reported for all three segments due to improvements in market conditions and consumer demand in the fourth quarter of 2022. A reconciliation of reported net sales by segment is as follows:

 

Commercial
Foodservice

 

Residential
Kitchen

 

Food
Processing

 

Total
Company

Reported Net Sales Growth

19.2

%

 

3.1

%

 

45.2

%

 

19.1

%

Acquisitions

2.2

%

 

16.4

%

 

19.7

%

 

8.2

%

Foreign Exchange Rates

(2.4

)%

 

(4.6

)%

 

(3.5

)%

 

(3.1

)%

Organic Net Sales Growth (1) (2)

19.4

%

 

(8.7

)%

 

29.1

%

 

14.0

%

(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

  • Foreign exchange losses were approximately $9.8 million in the fourth quarter, which negatively impacted adjusted earnings per share by $0.14.
  • Adjusted EBITDA (a non-GAAP measure) was $233.5 million, in the fourth quarter of 2022, which includes $6.6 million of unfavorable translation impacts from changes in foreign exchange rates.

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

28.0

%

 

14.2

%

 

26.2

%

 

22.6

%

Acquisitions

(0.4

)%

 

(1.7

)%

 

(2.5

)%

 

(1.2

)%

Foreign Exchange Rates

0.1

%

 

(0.3

)%

 

(0.3

)%

 

(0.1

)%

Organic Adjusted EBITDA (1) (2)

28.3

%

 

16.2

%

 

29.0

%

 

23.8

%

(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 $159.1 million in comparison to $77.4 million in the prior year period. The total leverage ratio per our credit agreements was 3.0x. The trailing twelve month bank agreement pro-forma EBITDA was $889.6 million.
  • Cash balances at the end of the quarter were $162.0 million. Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2022 fiscal fourth quarter amounted to $2.6 billion as compared to $2.3 billion at the end of fiscal 2021. Debt increased $70 million related to recent business acquisitions. Additionally, our borrowing availability at the end of the fourth quarter was approximately $2.2 billion.

“We are excited to have completed the acquisitions of Escher Mixers and Marco Beverage Systems in the fourth quarter. Escher is a leading provider of innovative dough handling and mixing equipment, including automated and robotic solutions. Escher is a perfect complement to our current industrial bakery business, extending our product offering and expanding the integrated full-line solutions we can provide to our bakery customers,” said Tim FitzGerald. “The acquisition of Marco further expands our rapidly growing beverage offerings. Marco is an innovation leader in beverage solutions, including coffee brewers, cold brew dispense systems, and a variety of hot, cold and sparkling water dispensers. Marco’s touchless and in-counter dispense technology is in demand due to space, labor and ergonomic advantages.” 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 21st. 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 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, the state-of-the-art Middleby Innovation Kitchens showcases and demonstrates 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,
2022

 

4th Qtr,
2021

 

4th Qtr,
2022

 

4th Qtr,
2021

Net sales

$

1,031,705

 

 

$

866,416

 

 

$

4,032,853

 

 

$

3,250,792

 

Cost of sales

 

641,635

 

 

 

550,783

 

 

 

2,586,299

 

 

 

2,055,932

 

 

 

 

 

 

 

 

 

Gross profit

 

390,070

 

 

 

315,633

 

 

 

1,446,554

 

 

 

1,194,860

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

200,477

 

 

 

171,954

 

 

 

797,234

 

 

 

667,976

 

Restructuring expenses

 

1,485

 

 

 

5,059

 

 

 

9,716

 

 

 

7,655

 

Merger termination fee

 

 

 

 

 

 

 

 

 

 

(110,000

)

Gain on sale of plant

 

 

 

 

 

 

 

 

 

 

(763

)

Income from operations

 

188,108

 

 

 

138,620

 

 

 

639,604

 

 

 

629,992

 

 

 

 

 

 

 

 

 

Interest expense and deferred financing amortization, net

 

26,414

 

 

 

13,676

 

 

 

88,977

 

 

 

57,157

 

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

 

(10,437

)

 

 

(10,798

)

 

 

(42,681

)

 

 

(45,066

)

Other expense (income), net

 

10,415

 

 

 

(237

)

 

 

28,893

 

 

 

(1,603

)

 

 

 

 

 

 

 

 

Earnings before income taxes

 

161,716

 

 

 

135,979

 

 

 

564,415

 

 

 

619,504

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

28,519

 

 

 

33,301

 

 

 

127,846

 

 

 

131,012

 

 

 

 

 

 

 

 

 

Net earnings

$

133,197

 

 

$

102,678

 

 

$

436,569

 

 

$

488,492

 

 

 

 

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

2.48

 

 

$

1.86

 

 

$

8.07

 

 

$

8.85

 

 

 

 

 

 

 

 

 

Diluted

$

2.45

 

 

$

1.80

 

 

$

7.95

 

 

$

8.62

 

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

53,809

 

 

 

55,190

 

 

 

54,095

 

 

 

55,216

 

 

 

 

 

 

 

 

 

Diluted

 

54,388

 

 

 

57,084

 

 

 

54,947

 

 

 

56,665

 

THE MIDDLEBY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in 000’s)

(Unaudited)

 

 

Dec 31, 2022

 

Jan 1, 2022

ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

$

162,001

 

$

180,362

Accounts receivable, net

 

631,134

 

 

577,142

Inventories, net

 

1,077,729

 

 

837,418

Prepaid expenses and other

 

125,640

 

 

92,269

Prepaid taxes

 

9,492

 

 

19,894

Total current assets

 

2,005,996

 

 

1,707,085

 

 

 

 

Property, plant and equipment, net

 

443,528

 

 

380,980

Goodwill

 

2,411,834

 

 

2,243,469

Other intangibles, net

 

1,794,232

 

 

1,875,377

Long-term deferred tax assets

 

6,738

 

 

33,194

Other assets

 

212,538

 

 

143,493

 

 

 

 

Total assets

$

6,874,866

 

$

6,383,598

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Current maturities of long-term debt

$

45,583

 

$

27,293

Accounts payable

 

271,374

 

 

304,740

Accrued expenses

 

671,327

 

 

582,855

Total current liabilities

 

988,284

 

 

914,888

 

 

 

 

Long-term debt

 

2,676,741

 

 

2,387,001

Long-term deferred tax liability

 

220,204

 

 

186,935

Accrued pension benefits

 

14,948

 

 

219,680

Other non-current liabilities

 

176,942

 

 

180,818

 

 

 

 

Stockholders' equity

 

2,797,747

 

 

2,494,276

 

 

 

 

Total liabilities and stockholders' equity

$

6,874,866

 

$

6,383,598

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 31, 2022

 

 

 

 

 

 

 

Net sales

$

633,272

 

 

$

216,068

 

 

$

182,365

 

 

$

1,031,705

 

Segment Operating Income

$

159,024

 

 

$

27,137

 

 

$

40,589

 

 

$

188,108

 

Operating Income % of net sales

 

25.1

%

 

 

12.6

%

 

 

22.3

%

 

 

18.2

%

 

 

 

 

 

 

 

 

Depreciation

 

6,855

 

 

 

4,325

 

 

 

1,730

 

 

 

13,011

 

Amortization

 

13,862

 

 

 

(3,072

)

 

 

5,556

 

 

 

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 (2)

$

177,412

 

 

$

30,605

 

 

$

47,772

 

 

$

233,539

 

Adjusted EBITDA % of net sales

 

28.0

%

 

 

14.2

%

 

 

26.2

%

 

 

22.6

%

 

 

 

 

 

 

 

 

Three Months Ended January 1, 2022

 

 

 

 

 

 

 

Net sales

$

531,348

 

 

$

209,494

 

 

$

125,574

 

 

$

866,416

 

Segment Operating Income

$

111,332

 

 

$

29,613

 

 

$

26,366

 

 

$

138,620

 

Operating Income % of net sales

 

21.0

%

 

 

14.1

%

 

 

21.0

%

 

 

16.0

%

 

 

 

 

 

 

 

 

Depreciation

 

6,235

 

 

 

3,535

 

 

 

1,596

 

 

 

11,501

 

Amortization

 

14,638

 

 

 

4,483

 

 

 

1,797

 

 

 

20,918

 

Restructuring expenses

 

4,036

 

 

 

1,023

 

 

 

 

 

 

5,059

 

Acquisition related adjustments

 

206

 

 

 

1,501

 

 

 

 

 

 

1,707

 

Stock compensation

 

 

 

 

 

 

 

 

 

 

15,195

 

Segment adjusted EBITDA

$

136,447

 

 

$

40,155

 

 

$

29,759

 

 

$

193,000

 

Adjusted EBITDA % of net sales

 

25.7

%

 

 

19.2

%

 

 

23.7

%

 

 

22.3

%

 

 

 

 

 

 

 

 

(1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $22.3 million and $13.4 million for the three months ended December 31, 2022 and January 1, 2022, respectively.

(2) Foreign exchange rates negatively impacted Segment Adjusted EBITDA by approximately $6.6 million for the three months ended December 31, 2022

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 31, 2022

 

 

 

 

 

 

 

Net sales

$

2,410,266

 

 

$

1,048,122

 

 

$

574,465

 

 

$

4,032,853

 

Segment Operating Income

$

549,764

 

 

$

127,948

 

 

$

106,231

 

 

$

639,604

 

Operating Income % of net sales

 

22.8

%

 

 

12.2

%

 

 

18.5

%

 

 

15.9

%

 

 

 

 

 

 

 

 

Depreciation

 

24,432

 

 

 

13,596

 

 

 

5,912

 

 

 

44,619

 

Amortization

 

55,506

 

 

 

17,376

 

 

 

13,400

 

 

 

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 (2)

$

629,051

 

 

$

179,089

 

 

$

128,148

 

 

$

853,408

 

Adjusted EBITDA % of net sales

 

26.1

%

 

 

17.1

%

 

 

22.3

%

 

 

21.2

%

 

 

 

 

 

 

 

 

Twelve Months Ended January 1, 2022

 

 

 

 

 

 

 

Net sales

$

2,032,761

 

 

$

737,285

 

 

$

480,746

 

 

$

3,250,792

 

Segment Operating Income

$

423,121

 

 

$

124,701

 

 

$

94,414

 

 

$

629,992

 

Operating Income % of net sales

 

20.8

%

 

 

16.9

%

 

 

19.6

%

 

 

19.4

%

 

 

 

 

 

 

 

 

Depreciation

 

23,814

 

 

 

12,655

 

 

 

5,601

 

 

 

42,681

 

Amortization

 

56,910

 

 

 

11,628

 

 

 

7,247

 

 

 

75,785

 

Restructuring expenses

 

5,422

 

 

 

1,857

 

 

 

376

 

 

 

7,655

 

Facility consolidation related expenses

 

993

 

 

 

 

 

 

 

 

 

993

 

Acquisition related adjustments

 

1,009

 

 

 

3,177

 

 

 

 

 

 

4,186

 

Merger termination fee, net deal costs

 

 

 

 

 

 

 

 

 

 

(90,285

)

Stock compensation

 

 

 

 

 

 

 

 

 

 

42,330

 

Gain on sale of plant

 

(678

)

 

 

(85

)

 

 

 

 

 

(763

)

Segment adjusted EBITDA

$

510,591

 

 

$

153,933

 

 

$

107,638

 

 

$

712,574

 

Adjusted EBITDA % of net sales

 

25.1

%

 

 

20.9

%

 

 

22.4

%

 

 

21.9

%

 

 

 

 

 

 

 

 

(1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $82.9 million and $59.6 million for the twelve months ended December 31, 2022 and January 1, 2022, respectively.

(2) Foreign exchange rates negatively impacted Segment Adjusted EBITDA by approximately $20.4 million for the twelve months ended December 31, 2022.

THE MIDDLEBY CORPORATION

NON-GAAP INFORMATION (UNAUDITED)

(Amounts in 000’s, Except Percentages)

 

 

Three Months Ended

 

4th Qtr, 2022

 

4th Qtr, 2021

 

$

 

Diluted per
share

 

$

 

Diluted per
share

Net earnings

$

133,197

 

 

$

2.45

 

 

$

102,678

 

 

$

1.80

 

Amortization (1)

 

18,132

 

 

 

0.33

 

 

 

23,070

 

 

 

0.40

 

Restructuring expenses

 

1,485

 

 

 

0.03

 

 

 

5,059

 

 

 

0.09

 

Acquisition related adjustments

 

(1,307

)

 

 

(0.02

)

 

 

1,707

 

 

 

0.03

 

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

 

(10,437

)

 

 

(0.19

)

 

 

(10,798

)

 

 

(0.19

)

Charitable support to Ukraine

 

169

 

 

 

 

 

 

 

 

 

 

Income tax effect of pre-tax adjustments

 

(2,075

)

 

 

(0.04

)

 

 

(4,664

)

 

 

(0.08

)

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

 

 

 

 

0.01

 

 

 

 

 

 

0.06

 

Adjusted net earnings

$

139,164

 

 

$

2.57

 

 

$

117,052

 

 

$

2.11

 

 

 

 

 

 

 

 

 

Diluted weighted average number of shares

 

54,388

 

 

 

 

 

57,084

 

 

 

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

 

(320

)

 

 

 

 

(1,718

)

 

 

Adjusted diluted weighted average number of shares

 

54,068

 

 

 

 

 

55,366

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

4th Qtr, 2022

 

4th Qtr, 2021

 

$

 

Diluted per
share

 

$

 

Diluted per
share

Net earnings

$

436,569

 

 

$

7.95

 

 

$

488,492

 

 

$

8.62

 

Amortization (1)

 

93,441

 

 

 

1.70

 

 

 

82,562

 

 

 

1.46

 

Restructuring expenses

 

9,716

 

 

 

0.18

 

 

 

7,655

 

 

 

0.14

 

Acquisition related adjustments

 

13,852

 

 

 

0.25

 

 

 

4,186

 

 

 

0.07

 

Facility consolidation related expenses

 

 

 

 

 

 

 

993

 

 

 

0.02

 

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

 

(42,681

)

 

 

(0.78

)

 

 

(45,066

)

 

 

(0.80

)

Merger termination fee, net deal costs

 

 

 

 

 

(90,285

)

 

 

(1.59

)

Gain on sale of plant

 

 

 

 

 

 

 

(763

)

 

 

(0.01

)

Charitable support to Ukraine

 

967

 

 

 

0.02

 

 

 

 

 

 

 

Discrete tax adjustments

 

 

 

 

 

 

 

(18,900

)

 

 

(0.33

)

Income tax effect of pre-tax adjustments

 

(18,824

)

 

 

(0.34

)

 

 

9,854

 

 

 

0.17

 

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

 

 

 

 

0.12

 

 

 

 

 

 

0.19

 

Adjusted net earnings

$

493,040

 

 

$

9.10

 

 

$

438,728

 

 

$

7.94

 

 

 

 

 

 

 

 

 

Diluted weighted average number of shares

 

54,947

 

 

 

 

 

56,665

 

 

 

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

 

(779

)

 

 

 

 

(1,393

)

 

 

Adjusted diluted weighted average number of shares

 

54,168

 

 

 

 

 

55,272

 

 

 

 

(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,
2022

 

4th Qtr,
2021

 

4th Qtr,
2022

 

4th Qtr,
2021

Net Cash Flows Provided By (Used In):

 

 

 

 

 

 

 

Operating activities

$

159,103

 

 

$

77,359

 

 

$

332,552

 

 

$

423,399

 

Investing activities

 

(90,451

)

 

 

(596,182

)

 

 

(348,319

)

 

 

(1,008,861

)

Financing activities

 

(64,963

)

 

 

448,428

 

 

 

7,631

 

 

 

502,789

 

 

 

 

 

 

 

 

 

Free Cash Flow

 

 

 

 

 

 

 

Cash flow from operating activities

$

159,103

 

 

$

77,359

 

 

$

332,552

 

 

$

423,399

 

Less: Capital expenditures, net of sale proceeds

 

(16,375

)

 

 

(16,591

)

 

 

(67,289

)

 

 

(40,261

)

Free cash flow

$

142,728

 

 

$

60,768

 

 

$

265,263

 

 

$

383,138

 

 

 

 

 

 

 

 

 

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.

Darcy Bretz, Investor and Public Relations, (847) 429-7756
Bryan Mittelman, Chief Financial Officer, (847) 429-7715

Source: The Middleby Corporation