0001157523-23-000796.txt : 20230510 0001157523-23-000796.hdr.sgml : 20230510 20230510070024 ACCESSION NUMBER: 0001157523-23-000796 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20230510 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20230510 DATE AS OF CHANGE: 20230510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MIDDLEBY Corp CENTRAL INDEX KEY: 0000769520 STANDARD INDUSTRIAL CLASSIFICATION: REFRIGERATION & SERVICE INDUSTRY MACHINERY [3580] IRS NUMBER: 363352497 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09973 FILM NUMBER: 23904272 BUSINESS ADDRESS: STREET 1: 1400 TOASTMASTER DRIVE CITY: ELGIN STATE: IL ZIP: 60120 BUSINESS PHONE: 8477413300 MAIL ADDRESS: STREET 1: 1400 TOASTMASTER DRIVE CITY: ELGIN STATE: IL ZIP: 60120 FORMER COMPANY: FORMER CONFORMED NAME: MIDDLEBY CORP DATE OF NAME CHANGE: 19920703 8-K 1 a53397193.htm THE MIDDLEBY CORPORATION 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 10, 2023

THE MIDDLEBY CORPORATION
(Exact Name of Registrant as Specified in its Charter)

Delaware
001-9973
36-3352497
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation)
 
Identification No.)

1400 Toastmaster Drive, Elgin, Illinois 60120
(Address of Principal Executive Offices) (Zip Code)

(847) 741-3300
(Registrant’s telephone number, including area code)

N/A
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class
  Trading Symbol(s)
  Name of Each Exchange on Which Registered
Common Stock
  MIDD
 
The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02
Results of Operations and Financial Condition.
 
On May 10, 2023, The Middleby Corporation (the “Company”) issued a press release announcing its financial results for the first quarter ended April 1, 2023. A copy of that press release is furnished as Exhibit 99.1 and incorporated herein by reference.

The information furnished pursuant to Item 2.02 of this Current Report on Form 8-K (including the exhibit hereto) shall not be considered "filed" under the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into future filings by the Company under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, unless the Company expressly sets forth in such future filing that such information is to be considered "filed" or incorporated by reference therein.

Item 9.01.
Financial Statements and Exhibits.
   
  (c)               Exhibits.

Exhibit No.
  Description
     
Exhibit 99.1
  The Middleby Corporation press release dated May 10, 2023.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
 
THE MIDDLEBY CORPORATION
 
 
 
 
 
 
Dated:  May 10, 2023
By:
/s/ Bryan E. Mittelman
 
 
 
Bryan E. Mittelman
 
 
Chief Financial Officer


Exhibit Index


EX-99.1 2 a53397193_ex991.htm EXHIBIT 99.1
Exhibit 99.1

The Middleby Corporation Reports Record First Quarter Results

  • Revenue of $1,007 million, a 1% increase year over year
  • Diluted Earnings per share of $1.82 and adjusted net earnings per share of $2.19, an increase of 3% year over year
  • Adjusted EBITDA of $210 million, a 6% increase year over year
  • Profitability grew to an organic adjusted EBITDA margin of 21.1% compared to 19.8% in the prior year
  • Completed the acquisition of Flavor Burst, expanding Middleby’s beverage platform

ELGIN, Ill.--(BUSINESS WIRE)--May 10, 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 first quarter of 2023.

“We began the year posting solid results at our Commercial Foodservice and Food Processing segments, while our Residential business faced the expected challenges of current market conditions and the impact of inventory destocking at retailers. While these conditions persist for our residential business, we anticipate improvement as the year progresses and inventory levels normalize. Our investments in manufacturing capacities along with improvements in supply chain have returned lead times to normalized levels across most of our businesses and position us to serve our customers in 2023. We continue to have meaningful engagement with customers across all three of our business segments and are excited for the opportunities developing around our latest product innovations addressing labor, energy, speed and sustainability. We continue to invest in our innovation centers in the US and Europe. These centers have proven to be a strategic for demonstrating our new product solutions and driving our long-term growth objectives,” said Tim FitzGerald, CEO of The Middleby Corporation.

2023 First Quarter Financial Results

  • Net sales increased 1.3% in the first quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales decreased 1.4% in the first quarter over the comparative prior year period.
  • Organic net sales (a non-GAAP measure) increases were reported for the Commercial Foodservice and Food Processing segments due to improvements in market conditions and consumer demand in the first quarter of 2023. A reconciliation of reported net sales by segment is as follows:

 

Commercial
Foodservice

 

Residential
Kitchen

 

Food
Processing

 

Total
Company

Reported Net Sales Growth

13.7

%

 

(33.6

) %

 

40.4

%

 

1.3

%

Acquisitions

3.3

%

 

%

 

17.3

%

 

4.0

%

Foreign Exchange Rates

(1.2

)%

 

(1.6

)%

 

(1.2

)%

 

(1.3

)%

Organic Net Sales Growth (1) (2)

11.5

%

 

(32.1

)%

 

24.3

%

 

(1.4

)%

(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 $2.2 million in the first quarter, which negatively impacted adjusted earnings per share by $0.03.
  • Adjusted EBITDA (a non-GAAP measure) was $210.0 million, in the first quarter, which includes $2.8 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

26.0

%

 

12.9

%

 

23.6

%

 

20.8

%

Acquisitions

(0.5

) %

 

%

 

(0.4

) %

 

(0.3

) %

Foreign Exchange Rates

%

 

%

 

%

 

(0.1

) %

Organic Adjusted EBITDA (1) (2)

26.5

%

 

12.9

%

 

24.1

%

 

21.1

%

(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 first quarter amounted to $92.0 million in comparison to $15.3 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 $894.5 million.
  • Repurchased 348,980 Middleby shares in the open market during the first quarter for $48.3 million.
  • Cash balances at the end of the quarter were $156.5 million. Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2023 fiscal first quarter amounted to $2.6 billion as compared to $2.6 billion at the end of fiscal 2022. Additionally, our borrowing availability at the end of the first quarter was approximately $2.3 billion.

“We are excited to have completed the acquisitions of Flavor Burst and Blue Sparq to begin the year. Flavor Burst is a terrific complement to our soft-serve and slush beverage systems, providing our foodservice customers with an expanded menu of flavorful offerings to enhance their customers’ experience,” said Tim FitzGerald. “Blue Sparq extends our software and controls development capabilities, supporting our accelerated new product innovation across our portfolio of commercial and residential brands,” concluded Mr. FitzGerald.

Conference Call

The company has scheduled a conference call to discuss the first quarter results at 11 a.m. Eastern/10 a.m. Central Time on May 10th. 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

 

1st Qtr,
2023

 

1st Qtr,
2022

Net sales

$

1,007,396

 

 

$

994,676

 

Cost of sales

 

628,661

 

 

 

664,166

 

 

 

 

 

Gross profit

 

378,735

 

 

 

330,510

 

 

 

 

 

Selling, general and administrative expenses

 

215,407

 

 

 

206,071

 

Restructuring expenses

 

2,306

 

 

 

1,875

 

Income from operations

 

161,022

 

 

 

122,564

 

 

 

 

 

Interest expense and deferred financing amortization, net

 

29,462

 

 

 

17,654

 

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

 

(2,251

)

 

 

(11,516

)

Other expense, net

 

1,896

 

 

 

4,061

 

 

 

 

 

Earnings before income taxes

 

131,915

 

 

 

112,365

 

 

 

 

 

Provision for income taxes

 

32,826

 

 

 

26,610

 

 

 

 

 

Net earnings

$

99,089

 

 

$

85,755

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

 

 

Basic

$

1.85

 

 

$

1.57

 

 

 

 

 

Diluted

$

1.82

 

 

$

1.52

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

Basic

 

53,594

 

 

 

54,669

 

 

 

 

 

Diluted

 

54,377

 

 

 

56,363

 







 

THE MIDDLEBY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in 000’s)

(Unaudited)






 

 

Apr 1, 2023

 

Dec 31, 2022

ASSETS

 


 

 


 

 


 

 


Cash and cash equivalents

$

156,524


 

$

162,001


Accounts receivable, net

 

652,949


 

 

631,134


Inventories, net

 

1,116,364


 

 

1,077,729


Prepaid expenses and other

 

123,808


 

 

125,640


Prepaid taxes

 

10,874


 

 

9,492


Total current assets

 

2,060,519


 

 

2,005,996


 

 


 

 


Property, plant and equipment, net

 

461,728


 

 

443,528


Goodwill

 

2,429,167


 

 

2,411,834


Other intangibles, net

 

1,791,062


 

 

1,794,232


Long-term deferred tax assets

 

7,042


 

 

6,738


Other assets

 

206,619


 

 

212,538


 

 


 

 


Total assets

$

6,956,137


 

$

6,874,866


 

 


 

 


 

 


 

 


LIABILITIES AND STOCKHOLDERS' EQUITY

 


 

 


 

 


 

 


Current maturities of long-term debt

$

44,247


 

$

45,583


Accounts payable

 

282,032


 

 

271,374


Accrued expenses

 

664,030


 

 

671,327


Total current liabilities

 

990,309


 

 

988,284


 

 


 

 


Long-term debt

 

2,688,417


 

 

2,676,741


Long-term deferred tax liability

 

218,377


 

 

220,204


Accrued pension benefits

 

11,789


 

 

14,948


Other non-current liabilities

 

185,046


 

 

176,942


 

 


 

 


Stockholders' equity

 

2,862,199


 

 

2,797,747


 

 


 

 


Total liabilities and stockholders' equity

$

6,956,137


 

$

6,874,866




THE MIDDLEBY CORPORATION

NON-GAAP SEGMENT INFORMATION (UNAUDITED)

(Amounts in 000’s, Except Percentages)

 

 

 

 

 

 

 

 

 

Commercial
Foodservice

 

Residential
Kitchen

 

Food
Processing

 

Total
Company (1)

Three Months Ended April 1, 2023

 

 

 

 

 

 

 

Net sales

$

613,935

 

 

$

219,958

 

 

$

173,503

 

 

$

1,007,396

 

Segment Operating Income

$

136,562

 

 

$

21,186

 

 

$

34,687

 

 

$

161,022

 

Operating Income % of net sales

 

22.2

%

 

 

9.6

%

 

 

20.0

%

 

 

16.0

%

 

 

 

 

 

 

 

 

Depreciation

 

6,166

 

 

 

3,447

 

 

 

2,097

 

 

 

11,977

 

Amortization

 

14,808

 

 

 

2,238

 

 

 

4,137

 

 

 

21,183

 

Restructuring expenses

 

893

 

 

 

1,454

 

 

 

(41

)

 

 

2,306

 

Acquisition related adjustments

 

1,124

 

 

 

 

 

 

 

 

 

1,124

 

Charitable support to Ukraine

 

 

 

 

 

 

 

 

 

 

180

 

Stock compensation

 

 

 

 

 

 

 

 

 

 

12,232

 

Segment adjusted EBITDA (2)

$

159,553

 

 

$

28,325

 

 

$

40,880

 

 

$

210,024

 

Adjusted EBITDA % of net sales

 

26.0

%

 

 

12.9

%

 

 

23.6

%

 

 

20.8

%

 

 

 

 

 

 

 

 

Three Months Ended April 2, 2022

 

 

 

 

 

 

 

Net sales

$

540,018

 

 

$

331,080

 

 

$

123,578

 

 

$

994,676

 

Segment Operating Income

$

109,635

 

 

$

24,946

 

 

$

20,195

 

 

$

122,564

 

Operating Income % of net sales

 

20.3

%

 

 

7.5

%

 

 

16.3

%

 

 

12.3

%

 

 

 

 

 

 

 

 

Depreciation

 

5,839

 

 

 

3,985

 

 

 

1,358

 

 

 

11,372

 

Amortization

 

13,491

 

 

 

18,129

 

 

 

1,945

 

 

 

33,565

 

Restructuring expenses

 

1,451

 

 

 

387

 

 

 

37

 

 

 

1,875

 

Acquisition related adjustments

 

20

 

 

 

14,230

 

 

 

 

 

 

14,250

 

Stock compensation

 

 

 

 

 

 

 

 

 

 

13,723

 

Segment adjusted EBITDA

$

130,436

 

 

$

61,677

 

 

$

23,535

 

 

$

197,349

 

Adjusted EBITDA % of net sales

 

24.2

%

 

 

18.6

%

 

 

19.0

%

 

 

19.8

%

 

 

 

 

 

 

 

 

(1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $18.7 million and $18.3 million for the three months ended April 1, 2023 and April 2, 2022, respectively.

(2) Foreign exchange rates negatively impacted Segment Adjusted EBITDA by approximately $2.8 million for the three months ended April 1, 2023.



 

THE MIDDLEBY CORPORATION

NON-GAAP INFORMATION (UNAUDITED)

(Amounts in 000’s, Except Percentages)


 

 

Three Months Ended

 

1st Qtr, 2023

 

1st Qtr, 2022

 

$

 

Diluted per
share

 

$

 

Diluted per
share

Net earnings

$

99,089

 

 

$

1.82

 

 

$

85,755

 

 

$

1.52

 

Amortization (1)

 

22,970

 

 

 

0.42

 

 

 

35,370

 

 

 

0.63

 

Restructuring expenses

 

2,306

 

 

 

0.04

 

 

 

1,875

 

 

 

0.03

 

Acquisition related adjustments

 

1,124

 

 

 

0.02

 

 

 

14,250

 

 

 

0.25

 

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

 

(2,251

)

 

 

(0.04

)

 

 

(11,516

)

 

 

(0.20

)

Charitable support to Ukraine

 

180

 

 

 

 

 

 

 

 

 

 

Income tax effect of pre-tax adjustments

 

(6,058

)

 

 

(0.11

)

 

 

(9,475

)

 

 

(0.17

)

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

 

 

 

 

0.04

 

 

 

 

 

 

0.07

 

Adjusted net earnings

$

117,360

 

 

$

2.19

 

 

$

116,259

 

 

$

2.13

 

 

 

 

 

 

 

 

 

Diluted weighted average number of shares

 

54,377

 

 

 

 

 

56,363

 

 

 

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

 

(781

)

 

 

 

 

(1,688

)

 

 

Adjusted diluted weighted average number of shares

 

53,596

 

 

 

 

 

54,675

 

 

 












 

(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

 

1st Qtr, 2023

 

1st Qtr, 2022

Net Cash Flows Provided By (Used In):

 

 

 

Operating activities

$

92,002

 

 

$

(15,344

)

Investing activities

 

(36,450

)

 

 

(24,126

)

Financing activities

 

(63,377

)

 

 

8,721

 

 

 

 

 

Free Cash Flow

 

 

 

Cash flow from operating activities

$

92,002

 

 

$

(15,344

)

Less: Capital expenditures

 

(25,485

)

 

 

(14,497

)

Free cash flow

$

66,517

 

 

$

(29,841

)

 

 

 

 

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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Entity Registrant Name THE MIDDLEBY CORPORATION
Entity Incorporation, State or Country Code DE
Entity File Number 001-9973
Entity Tax Identification Number 36-3352497
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Entity Address, City or Town Elgin
Entity Address, State or Province IL
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City Area Code 847
Local Phone Number 741-3300
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Trading Symbol MIDD
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Entity Information, Former Legal or Registered Name N/A
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