MIDDLEBY CORP
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
(Mark One)
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||
For the quarterly period ended
March 29, 2025
or
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||
Commission File No.
1-9973
(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number) | ||||
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| (Address of principal executive offices) | (Zip Code) | ||||||||||
| Registrant's telephone number, including area code: |
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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “accelerated filer," "large accelerated filer," "smaller reporting company," and "emerging growth company” in Rule 12b-2 of the Exchange Act.
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☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | ||||||||||||
| Smaller reporting company |
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Emerging growth company |
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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.
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
☒
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
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As of May 5, 2025, there were
53,481,521
shares of the registrant's common stock outstanding.
THE MIDDLEBY CORPORATION
QUARTER ENDED MARCH 29, 2025
INDEX
| DESCRIPTION | PAGE | |||||||
| PART I. FINANCIAL INFORMATION | ||||||||
| Item 1. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS as of MARCH 29, 2025 and DECEMBER 28, 2024 | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME for the three months ended MARCH 29, 2025 and MARCH 30, 2024 | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY for the three months ended MARCH 29, 2025 and MARCH 30, 2024 | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS for the three months ended MARCH 29, 2025 and MARCH 30, 2024 | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| PART II. OTHER INFORMATION | ||||||||
| Item 2. | ||||||||
| Item 6. | ||||||||
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
(
Unaudited
)
| ASSETS | Mar 29, 2025 | Dec 28, 2024 | |||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ |
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$ |
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Accounts receivable, net of reserve for doubtful accounts of $
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| Inventories, net |
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| Prepaid expenses and other |
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| Prepaid taxes |
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| Total current assets |
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Property, plant and equipment, net of accumulated depreciation of $
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| Goodwill |
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Other intangibles, net of amortization of $
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| Long-term deferred tax assets |
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| Pension benefits assets |
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| Other assets |
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| Total assets | $ |
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$ |
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| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current maturities of long-term debt | $ |
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$ |
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| Accounts payable |
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| Accrued expenses |
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| Total current liabilities |
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| Long-term debt |
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| Long-term deferred tax liability |
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| Accrued pension benefits |
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| Other non-current liabilities |
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| Stockholders' equity: | |||||||||||
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Preferred stock, $
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Common stock, $
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| Paid-in capital |
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Treasury stock, at cost;
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(
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(
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| Retained earnings |
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| Accumulated other comprehensive loss |
(
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(
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| Total stockholders' equity |
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| Total liabilities and stockholders' equity | $ |
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$ |
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See accompanying notes
1
THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands, Except Per Share Data)
(
Unaudited
)
| Three Months Ended | ||||||||||||||
| Mar 29, 2025 | Mar 30, 2024 | |||||||||||||
| Net sales | $ |
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$ |
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| Cost of sales |
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| Gross profit |
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| Selling, general and administrative expenses |
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| Restructuring expenses |
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| Income from operations |
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| Interest expense and deferred financing amortization, net |
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| Net periodic pension benefit (other than service costs) |
(
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(
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| Other expense (income), net |
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(
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| Earnings before income taxes |
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| Provision for income taxes |
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| Net earnings | $ |
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$ |
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| Net earnings per share: | ||||||||||||||
| Basic | $ |
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$ |
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| Diluted | $ |
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$ |
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| Weighted average number of shares | ||||||||||||||
| Basic |
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| Dilutive common stock equivalents |
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| Diluted |
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| Comprehensive income | $ |
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$ |
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See accompanying notes
2
THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(amounts in thousands)
(
Unaudited
)
|
Common
Stock |
Paid-in
Capital |
Treasury
Stock |
Retained
Earnings |
Accumulated
Other Comprehensive Income/(loss) |
Total
Stockholders' Equity |
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| Balance, December 28, 2024 | $ |
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$ |
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$ |
(
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$ |
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$ |
(
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$ |
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| Net earnings |
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| Currency translation adjustments |
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Change in unrecognized pension benefit costs, net of tax of $
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(
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(
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Unrealized loss on interest rate swap, net of tax of $(
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(
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(
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| Stock compensation |
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| Purchase of treasury stock |
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(
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(
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| Balance, March 29, 2025 | $ |
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$ |
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$ |
(
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$ |
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$ |
(
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$ |
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Common
Stock |
Paid-in
Capital |
Treasury
Stock |
Retained
Earnings |
Accumulated
Other Comprehensive Income/(loss) |
Total
Stockholders' Equity |
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| Balance, December 30, 2023 | $ |
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$ |
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$ |
(
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$ |
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$ |
(
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$ |
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| Net earnings |
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| Currency translation adjustments |
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(
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(
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Change in unrecognized pension benefit costs, net of tax of $
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Unrealized gain on interest rate swap, net of tax of $
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| Stock compensation |
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| Purchase of treasury stock |
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(
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(
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| Balance, March 30, 2024 | $ |
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$ |
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$ |
(
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$ |
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$ |
(
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$ |
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See accompanying notes
3
THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(
Unaudited)
| Three Months Ended | |||||||||||
| Mar 29, 2025 | Mar 30, 2024 | ||||||||||
| Cash flows from operating activities-- | |||||||||||
| Net earnings | $ |
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$ |
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| Adjustments to reconcile net earnings to net cash provided by operating activities-- | |||||||||||
| Depreciation and amortization |
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| Non-cash share-based compensation |
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| Deferred income taxes |
(
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(
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| Net periodic pension benefit (other than service costs) |
(
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(
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| Other non-cash items |
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| Changes in assets and liabilities, net of acquisitions | |||||||||||
| Accounts receivable, net |
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| Inventories, net |
(
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(
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| Prepaid expenses and other assets |
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| Accounts payable |
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| Accrued expenses and other liabilities |
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(
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| Net cash provided by operating activities |
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| Cash flows from investing activities-- | |||||||||||
| Net additions to property, plant and equipment |
(
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(
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| Purchase of intangible assets |
(
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(
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| Acquisitions, net of cash acquired |
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(
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| Net cash used in investing activities |
(
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(
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| Cash flows from financing activities-- | |||||||||||
| Repayments under Credit Facility |
(
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(
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| Net repayments under foreign bank loan |
(
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(
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| Payments of deferred purchase price |
(
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| Repurchase of treasury stock |
(
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(
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| Other, net |
(
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(
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| Net cash used in financing activities |
(
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(
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| Effect of exchange rates on cash and cash equivalents |
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(
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| Changes in cash and cash equivalents-- | |||||||||||
| Net increase in cash and cash equivalents |
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| Cash and cash equivalents at beginning of year |
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| Cash and cash equivalents at end of period | $ |
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$ |
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See accompanying notes
4
THE MIDDLEBY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 29, 2025
(
Unaudited
)
1)
Summary of Significant Accounting Policies
a)
Basis of Presentation
The condensed consolidated financial statements have been prepared by The Middleby Corporation (the "company" or “Middleby”), pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The financial statements are unaudited and certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the company believes that the disclosures are adequate to make the information not misleading. These financial statements should be read in conjunction with the financial statements and related notes contained in the company's 2024 Form 10-K. The company’s interim results are not necessarily indicative of future full year results for the fiscal year 2025.
In the opinion of management, the financial statements contain all adjustments, which are normal and recurring in nature, necessary to present fairly the financial position of the company as of March 29, 2025 and December 28, 2024, the results of operations for the three months ended March 29, 2025 and March 30, 2024, cash flows for the three months ended March 29, 2025 and March 30, 2024 and statement of stockholders' equity for the three months ended March 29, 2025 and March 30, 2024.
Certain prior year amounts have been reclassified to be consistent with current year presentation, including beginning to report the results of a division within the company's Food Processing segment as a result of a change in internal management and potential synergies in operations to be consistent with the reporting of financial information used to assess performance and allocate resources. These operations were previously reported in the Commercial Foodservice segment and are now managed and reported in the Food Processing segment. All prior period segment disclosures have been recast to reflect this change.
Proposed Separation Transaction
On February 25, 2025, the company announced its intent to separate its Food Processing business through a spin-off of the Food Processing business, under which the stock of Food Processing, as a new independent publicly traded company, will be distributed to Middleby’s shareholders. As of the date hereof, Middleby is targeting completion of the separation by early 2026, subject to certain customary conditions, including, among others, final approval by the company’s Board of Directors and the effectiveness of appropriate filings with the SEC. The spin-off of Food Processing is expected to be tax-free for U.S. federal income tax purposes. There can be no assurance that any separation transaction will ultimately occur or, if one does occur, of its terms or timing.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses. Significant estimates and assumptions are used for, but are not limited to, allowances for doubtful accounts, reserves for excess and obsolete inventories, long-lived and intangible assets, warranty reserves, insurance reserves, income tax reserves, non-cash share-based compensation and post-retirement obligations. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed in the notes herein.
b)
Non-Cash Share-Based Compensation
The company estimates the fair value of market-based stock awards and stock options at the time of grant and recognizes compensation cost over the vesting period of the awards and options. Non-cash share-based compensation expense was $
2.5
million and $
13.8
million for the three months period ended March 29, 2025 and March 30, 2024, respectively.
5
c)
Income Taxes
A tax provision of $
29.1
million, at an effective rate of
24.0
%, was recorded during the three months period ended March 29, 2025, as compared to a $
28.3
million tax provision at an effective rate of
24.6
% in the prior year period. The effective tax rate for the three months period ended March 29, 2025 is higher than the U.S. statutory tax rate of
21.0
% primarily due to state taxes and foreign tax rate differentials.
d)
Fair Value Measures
Accounting Standards Codification ("ASC") 820 "Fair Value Measurements and Disclosures" defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into the following levels:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.
Level 3 – Unobservable inputs based the company's own assumptions.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The company’s financial assets and liabilities that are measured at fair value and are categorized using the fair value hierarchy are as follows (in thousands):
|
Fair Value
Level 1 |
Fair Value
Level 2 |
Fair Value
Level 3 |
Total | ||||||||||||||||||||
| As of March 29, 2025 | |||||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||
| Interest rate swaps | $ |
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$ |
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$ |
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$ |
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| Financial Liabilities: | |||||||||||||||||||||||
| Contingent consideration | $ |
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$ |
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$ |
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$ |
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| Foreign exchange derivative contracts | $ |
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$ |
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$ |
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$ |
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| As of December 28, 2024 | |||||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||
| Interest rate swaps | $ |
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$ |
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$ |
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$ |
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| Financial Liabilities: | |||||||||||||||||||||||
| Contingent consideration | $ |
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$ |
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$ |
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$ |
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| Foreign exchange derivative contracts | $ |
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$ |
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$ |
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$ |
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The contingent consideration as of March 29, 2025 and December 28, 2024 relates to the earnout provisions recorded in conjunction with various purchase agreements.
Earnout liabilities are classified within Level 3 in the fair value hierarchy, as the methodology used to estimate fair value includes significant unobservable inputs reflecting management’s own assumptions. The earnout provisions associated with these acquisitions are based upon performance measurements related to sales and earnings, as defined in the respective purchase agreement. On a quarterly basis, the company assesses the projected results for each of the acquisitions in comparison to the earnout targets and adjusts the liability accordingly. Discount rates for valuing contingent consideration are determined based on the company rates and specific acquisition risk considerations. Changes in fair value associated with the earnout provisions are recognized in Selling, general and administrative expenses within the Condensed Consolidated Statements of Comprehensive Income. The earnout liabilities are included in accrued expenses and other non-current liabilities.
The following table represents changes in the fair value of the contingent consideration liabilities:
6
| March 29, 2025 | |||||
| Beginning balance | $ |
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| Payments of contingent consideration |
(
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| New contingent consideration |
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| Changes in fair value |
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| Ending balance | $ |
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e) Consolidated Statements of Cash Flows
Cash paid for interest was $
24.7
million and $
27.9
million for the three months ended March 29, 2025 and March 30, 2024, respectively. Cash payments totaling $
7.9
million and $
8.4
million were made for income taxes for the three months ended March 29, 2025 and March 30, 2024, respectively.
Other non-cash items in the adjustments to reconcile net earnings to net cash provided by operating activities consists primarily of unrealized foreign exchange on non-functional currency third party debt.
f)
Earnings Per Share
“Basic earnings per share” is calculated based upon the weighted average number of common shares actually outstanding, and “diluted earnings per share” is calculated based upon the weighted average number of common shares outstanding and other dilutive securities.
The company’s potentially dilutive securities consist of shares issuable upon vesting of restricted stock grants, computed using the treasury method, and amounted to
3,000
for the three months ended March 30, 2024. There were no potentially dilutive securities for the three months ended March 29, 2025.
For the three months ended March 29, 2025 and March 30, 2024, the average market price of the company's common stock exceeded the exercise price of the Convertible Notes (as defined below) resulting in
1,028,000
and
737,000
diluted common stock equivalents to be included in the diluted net earnings per share, respectively.
There have been no material conversions to date.
See Note 12, Financing Arrangements for further details on the Convertible Notes.
7
2)
Acquisitions and Purchase Accounting
The company accounts for all business combinations using the acquisition method to record a new cost basis for the assets acquired and liabilities assumed. The difference between the purchase price and the fair value of the assets acquired and liabilities assumed has been recorded as goodwill in the financial statements. The company recognizes identifiable intangible assets, primarily trade names and customer relationships, at their fair value using a discounted cash flow model. The significant assumptions used to estimate the value of the intangible assets include revenue growth rates, projected profit margins, discount rates, royalty rates, and customer attrition rates. These significant assumptions are forward-looking and could be affected by future economic and market conditions. The results of operations are reflected in the consolidated financial statements of the company from the dates of acquisition.
2025 Acquisitions
There were no acquisitions incurred during
the three months ended March 29, 2025.
2024 Acquisitions
During 2024, the company completed various acquisitions that were not individually material.
The following estimated fair values of assets acquired and liabilities assumed are based on the information that was available as of the acquisition date for the
2024 acquisitions and are summarized as follows (in thousands):
| Preliminary Opening Balance Sheet |
Measurement
Period Adjustments |
Adjusted Opening Balance Sheet | |||||||||||||||
| Cash | $ |
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$ |
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$ |
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| Current assets |
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(
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| Property, plant and equipment |
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(
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| Goodwill |
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| Other intangibles |
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| Long-term deferred tax asset |
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| Other assets |
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| Current portion of long-term debt |
(
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(
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| Current liabilities |
(
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(
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| Long-term debt |
(
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(
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| Long-term deferred tax liability |
(
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(
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| Other non-current liabilities |
(
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(
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(
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| Consideration paid at closing | $ |
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$ |
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$ |
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| Deferred payments |
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| Contingent consideration |
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| Net assets acquired and liabilities assumed | $ |
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$ |
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$ |
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The net long-term deferred tax liability amounted to
$
1.1
million
.
The net deferred tax liability is related to the difference between the book and tax basis of identifiable intangible assets.
The goodwill and $
16.7
million of other intangibles associated with the trade names are subject to the non-amortization provisions of ASC 350. Other intangibles also include $
12.1
million allocated to customer relationships, $
1.1
million allocated to developed technology, and $
2.3
million allocated to backlog, which are being amortized over periods of
5
years to
7
years,
7
years, and
3
months to
9
months, respectively. Goodwill of $
47.3
million and other intangibles of $
24.0
million are allocated to the Food Processing Equipment Group for segment reporting purposes. Goodwill of $
14.3
million and other intangibles of $
8.2
million are allocated to the Commercial Foodservice Equipment Group for segment reporting purposes. Of these assets, goodwill of $
52.4
million and intangibles of $
28.0
million are expected to be deductible for tax purposes.
8
Two purchase agreements include earnout provisions providing for a contingent payment due to the sellers for the achievement of certain targets. Two earnouts are payable to the extent certain sales and EBITDA targets are met with measurement dates ending between 2026 and 2027. The contractual obligation associated with the contingent earnout provisions recognized on the acquisition date amounts to
$
8.7
million. One purchase agreement includes a deferred payment due to the sellers payable in 2030.
The contractual obligation associated with the deferred payment on the acquisition date amounts to
$
0.1
million.
The company believes that information gathered to date provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the company is waiting for additional information necessary to finalize those fair values for the acquisitions completed during 2024. Certain intangible assets are preliminarily valued using historical information from the Food Processing Equipment Group
and Commercial Foodservice Equipment Group
and qualitative assessment of the businesses at acquisition date. Specifically, the company estimated the fair values of the intangible assets based on the percentage of purchase price assigned to similar intangible assets in previous acquisitions. Thus, the provisional measurements of fair values set forth above are subject to change. The company expects to complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date.
Pro Forma Financial Informa
tion
In accordance with ASC 805
Business Combinations,
the following unaudited pro forma results of operations for the three months ended March 29, 2025 and March 30, 2024, assumes the 2024 and 2025 acquisitions described above were completed on December 31, 2023 (first day of fiscal year 2024). The following pro forma results include adjustments to reflect amortization of intangibles associated with the acquisitions and the effects of adjustments made to the carrying value of certain assets (in thousands, except per share data):
| Three Months Ended | |||||||||||
| March 29, 2025 | March 30, 2024 | ||||||||||
| Net sales | $ |
|
$ |
|
|||||||
| Net earnings |
|
|
|||||||||
| Net earnings per share: | |||||||||||
| Basic | $ |
|
$ |
|
|||||||
| Diluted | $ |
|
$ |
|
|||||||
The historical consolidated financial information of the company and the acquisitions have been adjusted in the pro forma information to give effect to events that are (1) directly attributable to the transactions, (2) factually supportable and (3) expected to have a continuing impact on the combined results. Pro forma data may not be indicative of the results that would have been obtained had these acquisitions occurred at the beginning of the periods presented, nor is it intended to be a projection of future results. Additionally, the pro forma financial information does not reflect the costs which the company has incurred or may incur to integrate the acquired businesses.
3)
Litigation Matters
Legal Proceedings and Contingencies.
From time to time, the company is subject to proceedings, lawsuits and other claims related to products, suppliers, employees, customers and competitors. The company maintains insurance to partially cover product liability, workers compensation, property and casualty, and general liability matters. The company is required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses.
A determination of the amount of accrual required, if any, for these contingencies is made after assessment of each matter and the related insurance coverage. The required accrual may change in the future due to new developments or changes in approach, such as a change in settlement strategy in dealing with these mat
ters. The company does not believe that any pending litigation will have a material adverse effect on its financial condition, results of operations or cash flows.
9
4)
Recently Issued Accounting Standards
In December 2023, the FASB issued Accounting Standard Update ASU No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required in an entity’s income tax rate reconciliation table. This ASU requires consistent categories and greater disaggregation of information presented in the effective tax rate reconciliation and requires disclosure of income taxes paid in both domestic and foreign jurisdictions. The guidance is effective for the company for annual periods beginning on January 1, 2025 and is required to be applied prospectively, with retrospective application to prior periods allowed. Early adoption is permitted. The company is currently evaluating the impact of this amendment on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses, which requires disclosure of disaggregated information about specific categories underlying certain income statement expense line items in the footnotes to the financial statements for both annual and interim periods. This ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The company is currently evaluating the impact of the adoption of this standard.
5)
Revenue Recognition
Disaggregation of Revenue
|
Commercial
Foodservice |
Food Processing | Residential Kitchen | Total | ||||||||||||||||||||
| Three Months Ended March 29, 2025 | |||||||||||||||||||||||
| United States and Canada | $ |
|
$ |
|
$ |
|
$ |
|
|||||||||||||||
| Asia |
|
|
|
|
|||||||||||||||||||
| Europe and Middle East |
|
|
|
|
|||||||||||||||||||
| Latin America |
|
|
|
|
|||||||||||||||||||
| Total | $ |
|
$ |
|
$ |
|
$ |
|
|||||||||||||||
| Three Months Ended March 30, 2024 | |||||||||||||||||||||||
| United States and Canada | $ |
|
$ |
|
$ |
|
$ |
|
|||||||||||||||
| Asia |
|
|
|
|
|||||||||||||||||||
| Europe and Middle East |
|
|
|
|
|||||||||||||||||||
| Latin America |
|
|
|
|
|||||||||||||||||||
| Total | $ |
|
$ |
|
$ |
|
$ |
|
|||||||||||||||
Contract Balances
Contract assets primarily relate to the company's right to consideration for work completed but not billed at the reporting date and are recorded in prepaid expenses and other in the Condensed Consolidated Balance Sheet. Contract assets are transferred to receivables when the right to consideration becomes unconditional. Accounts receivable are not considered contract assets under the revenue standard as contract assets are conditioned upon the company's future satisfaction of a performance obligation. Accounts receivable, in contracts, are unconditional rights to consideration.
Contract liabilities relate to advance consideration received from customers for which revenue has not been recognized. Current contract liabilities are recorded in accrued expenses in the Condensed Consolidated Balance Sheet. Non-current
10
contract liabilities are recorded in other non-current liabilities in the Condensed Consolidated Balance Sheet. Contract liabilities are reduced when the associated revenue from the contract is recognized.
The following table provides information about contract assets and contract liabilities from contracts with customers (in thousands):
| Mar 29, 2025 | Dec 28, 2024 | ||||||||||
| Contract assets | $ |
|
$ |
|
|||||||
| Contract liabilities | $ |
|
$ |
|
|||||||
| Non-current contract liabilities | $ |
|
$ |
|
|||||||
During the three months period ended March 29, 2025, the company reclassified $
24.0
million to receivables, which was included in the contract asset balance at the beginning of the period. During the three months period ended March 29, 2025, the company recognized revenue of $
42.3
million, which was included in the contract liability balance at the beginning of the period. Additions to contract liabilities representing amounts billed to clients in excess of revenue recognized to date were $
62.3
million during the three months period ended March 29, 2025.
Remaining Performance Obligations
Substantially all of the company's outstanding performance obligations will be satisfied within 12 to 36 months. There were
no
contract asset impairments during the three months period ended March 29, 2025.
11
6)
Other Comprehensive Income
Changes in accumulated other comprehensive income
(1)
were as follows (in thousands):
| Currency Translation Adjustment | Pension Benefit Costs | Unrealized Gain/(Loss) Interest Rate Swap | Total | ||||||||||||||||||||
| Balance as of December 28, 2024 | $ |
(
|
$ |
(
|
$ |
|
$ |
(
|
|||||||||||||||
| Other comprehensive income before reclassification |
|
(
|
(
|
|
|||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income |
|
|
(
|
(
|
|||||||||||||||||||
| Net current-period other comprehensive income | $ |
|
$ |
(
|
$ |
(
|
$ |
|
|||||||||||||||
| Balance as of March 29, 2025 | $ |
(
|
$ |
(
|
$ |
|
$ |
(
|
|||||||||||||||
| Balance as of December 30, 2023 | $ |
(
|
$ |
(
|
$ |
|
$ |
(
|
|||||||||||||||
| Other comprehensive income before reclassification |
(
|
|
|
(
|
|||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income |
|
|
(
|
(
|
|||||||||||||||||||
| Net current-period other comprehensive income | $ |
(
|
$ |
|
$ |
|
$ |
(
|
|||||||||||||||
| Balance as of March 30, 2024 | $ |
(
|
$ |
(
|
$ |
|
$ |
(
|
|||||||||||||||
(1) As of March 29, 2025, pension and unrealized loss on interest rate swap amounts, net of tax, were $
14.1
million and $
6.3
million, respectively. During the three months ended March 29, 2025, the adjustments to pension and unrealized loss on interest rate swap amounts, net of tax, were $
0.3
million and $(
1.7
) million, respectively. As of March 30, 2024, pension and unrealized gain on interest rate swap amounts, net of tax, were $
4.2
million and $
11.1
million, respectively. During the three months ended March 30, 2024, the adjustments to pension and unrealized gain on interest rate swap amounts, net of tax, were $
0.2
million and $
0.1
million, respectively.
Components of other comprehensive income were as follows (in thousands):
| Three Months Ended | ||||||||||||||
| Mar 29, 2025 | Mar 30, 2024 | |||||||||||||
| Net earnings | $ |
|
$ |
|
||||||||||
| Currency translation adjustment |
|
(
|
||||||||||||
| Pension liability adjustment, net of tax |
(
|
|
||||||||||||
| Unrealized (loss) gain on interest rate swaps, net of tax |
(
|
|
||||||||||||
| Comprehensive income | $ |
|
$ |
|
||||||||||
7)
Inventories
Inventories are composed of material, labor and overhead and are stated at the lower of cost or net realizable value. Costs for inventory have been determined using the first-in, first-out ("FIFO") method. The company estimates reserves for inventory obsolescence and shrinkage based on its judgment of future realization.
Inventories at March 29, 2025 and December 28, 2024 are as follows (in thousands):
| Mar 29, 2025 | Dec 28, 2024 | ||||||||||
| Raw materials and parts | $ |
|
$ |
|
|||||||
| Work-in-process |
|
|
|||||||||
| Finished goods |
|
|
|||||||||
| $ |
|
$ |
|
||||||||
12
8)
Goodwill
Changes in the carrying amount of goodwill for the three months ended March 29, 2025 are as follows (in thousands):
|
Commercial
Foodservice |
Food
Processing |
Residential Kitchen | Total | ||||||||||||||||||||
| Balance as of December 28, 2024 | $ |
|
$ |
|
$ |
|
$ |
|
|||||||||||||||
| Goodwill acquired during the year |
|
|
|
|
|||||||||||||||||||
|
Measurement period adjustments to
goodwill acquired in prior year |
|
|
|
|
|||||||||||||||||||
| Exchange effect and other |
(
|
|
|
|
|||||||||||||||||||
| Balance as of March 29, 2025 | $ |
|
$ |
|
$ |
|
$ |
|
|||||||||||||||
See Note 1 - Summary of Significant Accounting Policies, Basis of Presentation regarding reclassifications in the current year and prior year segment balances.
The company continues to monitor the current domestic and international political environment, including global trade policies and tariff actions to assess the outlook for demand of its products and the impact on its business and financial performance. The potential impact of tariffs on demand, production levels, and its operating results in the short-term is uncertain, but the company remains committed to evaluating opportunities to mitigate potential increased costs and implementing strategic actions necessary to realize long-term revenue and cash flow growth rates. The potential negative demand effect on revenues is also uncertain given the volatile environment, but demand and production levels are anticipated to recover.
The annual impairment assessment for goodwill and indefinite-lived intangible assets is performed as of the first day of the fourth quarter. The company does not believe there have been any interim indicators of impairment requiring analysis other than at the annual assessment date. This is supported by the review of order rates, backlog levels and financial performance across business segments.
9)
Intangibles
Intangible assets consist of the following (in thousands):
| March 29, 2025 | December 28, 2024 | ||||||||||||||||||||||||||||||||||
|
Estimated
Weighted Avg Remaining Life |
Gross
Carrying Amount |
Accumulated
Amortization |
Estimated
Weighted Avg Remaining Life |
Gross
Carrying Amount |
Accumulated
Amortization |
||||||||||||||||||||||||||||||
| Amortized intangible assets: | |||||||||||||||||||||||||||||||||||
| Customer relationships |
|
$ |
|
$ |
(
|
|
$ |
|
$ |
(
|
|||||||||||||||||||||||||
| Backlog |
|
|
(
|
|
|
(
|
|||||||||||||||||||||||||||||
| Developed technology |
|
|
(
|
|
|
(
|
|||||||||||||||||||||||||||||
| $ |
|
$ |
(
|
$ |
|
$ |
(
|
||||||||||||||||||||||||||||
| Indefinite-lived assets: | |||||||||||||||||||||||||||||||||||
| Trademarks and tradenames | $ |
|
$ |
|
|||||||||||||||||||||||||||||||
13
The aggregate intangible amortization expense was $
16.0
million and $
17.4
million for the three months period ended March 29, 2025 and March 30, 2024, respectively. The estimated future amortization expense of intangible assets is as follows (in thousands):
|
Twelve Month Period coinciding with the end of the company's Fiscal First Quarter
|
Amortization Expense | ||||
| 2026 | $ |
|
|||
| 2027 |
|
||||
| 2028 |
|
||||
| 2029 |
|
||||
| 2030 |
|
||||
| Thereafter |
|
||||
| $ |
|
||||
10)
Accrued Expenses
Accrued expenses consist of the following (in thousands):
| Mar 29, 2025 | Dec 28, 2024 | ||||||||||
| Contract liabilities | $ |
|
$ |
|
|||||||
| Accrued payroll and related expenses |
|
|
|||||||||
| Accrued warranty |
|
|
|||||||||
| Accrued customer rebates |
|
|
|||||||||
| Accrued contingent consideration |
|
|
|||||||||
| Accrued short-term leases |
|
|
|||||||||
| Accrued sales and other tax |
|
|
|||||||||
| Accrued agent commission |
|
|
|||||||||
| Accrued professional fees |
|
|
|||||||||
| Accrued product liability and workers compensation |
|
|
|||||||||
| Other accrued expenses |
|
|
|||||||||
| $ |
|
$ |
|
||||||||
11)
Warranty Costs
In the normal course of business, the company issues product warranties for specific product lines and provides for the estimated future warranty cost in the period in which the sale is recorded. The estimate of warranty cost is based on contract terms and historical warranty loss experience that is periodically adjusted for recent actual experience. Because warranty estimates are forecasts that are based on the best available information, actual claims costs may differ from amounts provided. Adjustments to initial obligations for warranties are made as changes in the obligations become reasonably estimable.
A rollforward of the warranty reserve is as follows (in thousands):
14
| Three Months Ended | |||||
| Mar 29, 2025 | |||||
| Balance as of December 28, 2024 | $ |
|
|||
| Warranty expense |
|
||||
| Warranty claims |
(
|
||||
| Balance as of March 29, 2025 | $ |
|
|||
12) Financing Arrangements
| Mar 29, 2025 | Dec 28, 2024 | ||||||||||
| (in thousands) | |||||||||||
| Term loan facility | $ |
|
$ |
|
|||||||
| Delayed draw term loan facility |
|
|
|||||||||
| Convertible senior notes |
|
|
|||||||||
| Foreign loans |
|
|
|||||||||
| Other debt arrangement |
|
|
|||||||||
| Total debt |
|
|
|||||||||
| Less: Current maturities of long-term debt |
|
|
|||||||||
| Long-term debt | $ |
|
$ |
|
|||||||
Credit Facility
As of March 29, 2025, the company had $
1.6
billion of borrowings outstanding under its credit facility (the "Credit Facility"), including $
925.0
million outstanding under the term loan ($
922.6
million, net of unamortized issuance fees) and $
707.8
million outstanding under the delayed draw term loan. The company also had $
4.5
million in outstanding letters of credit as of March 29, 2025, which reduces the borrowing availability under the Credit Facility. Remaining borrowing capacity under this facility was $
2.7
billion at March 29, 2025.
On August 11, 2022, the company borrowed $
750.0
million against the delayed draw term facility as provided under the Credit Agreement. The funds were used to reduce outstanding borrowings under the revolver. The delayed draw term loan amortizes in quarterly installments due on the last day of each fiscal quarter, and commenced on December 31, 2022, in an amount equal to
0.625
% of the principal drawn, with the balance, plus any accrued interest payable by October 21, 2026.
At March 29, 2025, borrowings under the Credit Facility accrued interest at a rate of
1.375
% above the daily simple or term Secured Overnight Financing Rate (“SOFR”) per annum or
0.375
% above the highest of the prime rate, the federal funds rate plus
0.50
% and one month Term SOFR plus
1.00
%. The interest rates on borrowings under the Credit Facility may be adjusted quarterly based on the company’s Funded Debt less Unrestricted Cash to Pro Forma EBITDA (the “Leverage Ratio”) on a rolling four-quarter basis. Additionally, a commitment fee based upon the Leverage Ratio is charged on the unused portion of the commitments under the Credit Facility. As of March 29, 2025, borrowings under the Credit Facility accrued interest at a minimum of
1.375
% above SOFR and the variable unused commitment fee will be at a minimum of
0.20
%. Borrowings under the Credit Facility accrue interest at a minimum of
1.375
% above the daily simple SOFR or term SOFR for the applicable interest period (each of which includes a spread adjustment of
0.10
%). The average interest rate per annum, inclusive of hedging instruments, on the debt under the Credit Facility was equal to
4.70
% at the end of the period and the variable commitment fee was equal to
0.20
% per annum as of March 29, 2025.
The term loan and delayed draw term loan facilities had an average interest rate per annum, inclusive of hedging instruments, of
4.70
% as of March 29, 2025.
In addition, the company has international credit facilities to fund working capital needs outside the United States. At March 29, 2025, these foreign credit facilities amounted to $
8.3
million in U.S. Dollars with a weighted average per annum interest rate of approximately
2.47
%.
15
The company’s debt is reflected on the balance sheet at cost. The fair values of the Credit Facility, term debt and foreign and other debt is based on the amount of future cash flows associated with each instrument discounted using the company's incremental borrowing rate. The company believes its interest rate margins, based on the company’s Leverage Ratio, on its existing debt are consistent with current market conditions and therefore the carrying value of debt reflects the fair value. The carrying value and estimated aggregate fair value, a level 2 measurement, based primarily on market prices, of debt excluding the Convertible Notes is as follows (in thousands):
| Mar 29, 2025 | Dec 28, 2024 | ||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||
| Total debt excluding convertible senior notes | $ |
|
$ |
|
$ |
|
$ |
|
|||||||||||||||
The company uses floating-to-fixed interest rate swap agreements to hedge variable interest rate risk associated with the Credit Facility. At March 29, 2025, the company had outstanding floating-to-fixed interest rate swaps totaling $
355.0
million notional amount carrying an average interest rate of
1.96
% maturing in less than 12 months and $
315.0
million notional amount carrying an average interest rate of
1.28
% that mature in more than 12 months but less than 35 months.
At March 29, 2025, the company was in compliance with all covenants pursuant to its borrowing agreements.
Convertible Notes
The following table summarizes the outstanding principal amount and carrying value of the Convertible Notes:
|
Mar 29, 2025
|
Dec 28, 2024
|
||||||||||
| (in thousands) | |||||||||||
| Principal amounts: | |||||||||||
| Principal | $ |
|
$ |
|
|||||||
| Unamortized issuance costs |
(
|
(
|
|||||||||
| Net carrying amount | $ |
|
$ |
|
|||||||
The following table summarizes total interest expense recognized related to the Convertible Notes:
| Three Months Ended | ||||||||||||||
|
Mar 29, 2025
|
Mar 30, 2024 | |||||||||||||
| Contractual interest expense | $ |
|
$ |
|
||||||||||
| Interest cost related to amortization of issuance costs |
|
|
||||||||||||
| Total interest expense | $ |
|
$ |
|
||||||||||
The estimated fair value of the Convertible Notes was $
904.5
million as of March 29, 2025 and was determined through consideration of quoted market prices. The fair value is classified as Level 2, as defined in Note 1(d), Fair Value Measurements
,
in these Notes to the Condensed Consolidated Financial Statement
.
The if-converted value of the Convertible Notes exceeded their respective principal value by $
140.3
million as of March 29, 2025.
16
Capped Call Transactions
In connection with the pricing of the Convertible Notes, the company entered into privately negotiated Capped Call Transactions (the "2020 Capped Call Transactions") and the company used the net proceeds of the offering of the Convertible Notes to pay the aggregate amount of $
104.7
million for them. The company entered into two tranches of privately negotiated Capped Call Transactions in December 2021 (the "2021 Capped Call Transactions") in the aggregate amount of $
54.6
million. On March 15, 2022, the company entered into an additional tranche of privately negotiated Capped Call Transactions (the "2022 Capped Call Transactions") in the amount of $
9.7
million
.
The 2020, 2021, and 2022 Capped Call Transactions (collectively, the "Capped Call Transactions") are expected generally to reduce the potential dilution and/or offset the cash payments the company is required to make in excess of the principal amount of the Convertible Notes upon conversion of the Convertible Notes in the event that the market price per share of the company's common stock is greater than the strike price of the Capped Call Transactions (which initially corresponds to the initial conversion price of the Convertible Notes and is subject to certain adjustments under the terms of the Capped Call Transactions), with such reduction and/or offset subject to a cap based on the cap price of the Capped Call Transactions. The 2020 Capped Call Transactions have an initial cap price of $
207.93
per share of the company's common stock. The 2021 Capped Call Transactions have initial cap prices of $
216.50
and $
225.00
per share of the company's common stock. The 2022 Capped Call Transactions have an initial cap price of $
229.00
per share. The Capped Call Transactions cover, initially, the number of shares of the company's common stock underlying the Convertible Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Convertible Notes.
The Capped Call Transactions are separate transactions entered into by the company with the capped call counterparties, and are not part of the terms of the Convertible Notes and will not affect any holder's right under the Convertible Notes. Holders of the Convertible Notes will not have any rights with respect to the Capped Call Transactions. The Capped Call Transactions do not meet the criteria for separate accounting as a derivative as they are indexed to the company's stock. The premiums paid of the Capped Call Transactions have been included as a net reduction to additional paid-in capital with stockholders' equity.
13)
Financial Instruments
Foreign Exchange
: The company uses foreign currency forward, foreign exchange swaps and option purchase and sales contracts to hedge its exposure to changes in foreign currency exchange rates. The company’s primary hedging activities are to mitigate its exposure to changes in exchange rates on intercompany and third-party trade receivables and payables. The company does not currently enter into derivative financial instruments for speculative purposes. In managing its foreign currency exposures, the company identifies and aggregates naturally occurring offsetting positions and then hedges residual balance sheet exposures. The notional amount of foreign currency contracts outstanding was $
244.0
million and $
239.3
million as of March 29, 2025 and December 28, 2024, respectively. The fair value of the forward and option contracts was a loss of $
1.0
million at the end of the first quarter of 2025.
Interest Rate:
The company has entered into interest rate swaps to fix the interest rate applicable to certain of its variable-rate debt. The agreements swapped one-month LIBOR for fixed rates. In February 2022, the company entered into an additional floating-to-fixed interest rate swap agreement that uses a daily SOFR in lieu of LIBOR. In April 2023, all outstanding LIBOR swap agreements were amended to one month term SOFR. The company has designated these swaps as cash flow hedges and all changes in fair value of the swaps are recognized in accumulated other comprehensive income. As of March 29, 2025, the fair value of these instruments was an asset of $
22.8
million. The change in fair value of these swap agreements in the first three months of 2025 was a loss of $
5.4
million, net of taxes.
The following table summarizes the company’s fair value of interest rate swaps (in thousands):
|
Condensed Consolidated
Balance Sheet Presentation |
Mar 29, 2025 | Dec 28, 2024 | |||||||||||||||
| Fair value | Prepaid expense and other | $ |
|
$ |
|
||||||||||||
| Fair value | Other assets | $ |
|
$ |
|
||||||||||||
17
The impact on earnings from interest rate swaps was as follows (in thousands):
| Three Months Ended | |||||||||||||||||
| Presentation of Gain/(loss) | Mar 29, 2025 | Mar 30, 2024 | |||||||||||||||
| Gain/(loss) recognized in accumulated other comprehensive income | Other comprehensive income | $ |
(
|
$ |
|
||||||||||||
| Gain reclassified from accumulated other comprehensive income (effective portion) | Interest expense | $ |
|
$ |
|
||||||||||||
Interest rate swaps are subject to default risk to the extent the counterparties are unable to satisfy their settlement obligations under the interest rate swap agreements. As a result, the company has counterparty credit exposure to large global financial institutions, which the company monitors on a regular basis.
14)
Segment Information
An operating segment is defined as a component of an enterprise, which has discrete financial information that is evaluated regularly. The company determined that its Chief Executive Officer is the Chief Operating Decision Maker (the "CODM"), who possesses the ultimate authority with respect to assessment of performance, allocation of resources, and all strategic actions of the company. In performing this responsibility, the CODM regularly reviews key internal management reports, financial information including forecasts, and quarterly results, which are prepared at the operating segment level.
In accordance with ASC 280-10, Segment Reporting, the company operates in three reportable operating segments defined by management reporting structure and operating activities. The Company’s reportable segments are: (i) the Commercial Foodservice Equipment Group, (ii) the Food Processing Equipment Group, and (iii) the Residential Kitchen Equipment Group.
Adjusted EBITDA is the profitability metric reported to the CODM for the purposes of making decisions about allocation of resources to each segment and assessing performance of each segment. The company defines Adjusted EBITDA as operating income less depreciation, intangible amortization, restructuring, acquisition related adjustments, impairments, stock compensation and other non-recurring items, which management considers to be outside core operating results. The CODM reviews this metric regularly to compare the profitability of segments, identify trends, and evaluate which segments require additional resources or strategic adjustments. The CODM uses Adjusted EBITDA to support the allocation of resources predominantly in the annual budget and forecasting process. The company believes that investors find this measure useful in comparing our operating performance to that of other companies in our industry because this measure generally illustrates the underlying performance of the business.
Management believes that inter-segment sales are made at established arm's length transfer prices. All inter-segment transactions are eliminated and values are presented net of eliminations. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.
Additional detail about each of the reportable segments and its corporate income and expenses is set forth below:
The Commercial Foodservice Equipment Group manufactures, sells, and distributes foodservice equipment for the restaurant and institutional kitchen industry. The Food Processing Equipment Group manufactures preparation, cooking, packaging food handling and food safety equipment for the food processing industry. The Residential Kitchen Equipment Group manufactures, sells and distributes kitchen equipment for the residential market.
See Note 1 - Summary of Significant Accounting Policies, Basis of Presentation regarding reclassifications in the current year and prior year segment balances.
18
Net Sales Summary
(dollars in thousands)
| Three Months Ended | ||||||||||||||||||||||||||
| Mar 29, 2025 | Mar 30, 2024 | |||||||||||||||||||||||||
| Sales | Percent | Sales | Percent | |||||||||||||||||||||||
| Business Segments: | ||||||||||||||||||||||||||
| Commercial Foodservice | $ |
|
|
% | $ |
|
|
% | ||||||||||||||||||
| Food Processing |
|
|
|
|
||||||||||||||||||||||
| Residential Kitchen |
|
|
|
|
||||||||||||||||||||||
| Total | $ |
|
|
% | $ |
|
|
% | ||||||||||||||||||
The following table summarizes the results of operations for the company's business segments
(1)
(dollars in thousands):
|
Commercial
Foodservice |
Food Processing | Residential Kitchen |
Corporate
and Other
(2)
|
Total | |||||||||||||||||||||||||
| Three Months Ended March 29, 2025 | |||||||||||||||||||||||||||||
| Net sales | $ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||||||||||||
| Cost of sales |
|
|
|
|
|
||||||||||||||||||||||||
|
Other segment items
(3)
|
|
|
|
|
|
||||||||||||||||||||||||
|
Segment adjusted EBITDA
(4)
|
|
|
|
(
|
|
||||||||||||||||||||||||
|
Depreciation expense
(5)
|
|
|
|
|
|
||||||||||||||||||||||||
|
Amortization expense
(6)
|
|
|
|
|
|
||||||||||||||||||||||||
| Net capital expenditures |
|
|
|
|
|
||||||||||||||||||||||||
| Total assets |
|
|
|
|
|
||||||||||||||||||||||||
| Three Months Ended March 30, 2024 | |||||||||||||||||||||||||||||
| Net sales | $ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||||||||||||||||
| Cost of sales |
|
|
|
(
|
|
||||||||||||||||||||||||
|
Other segment items
(3)
|
|
|
|
|
|
||||||||||||||||||||||||
|
Segment adjusted EBITDA
(4)
|
|
|
|
(
|
|
||||||||||||||||||||||||
|
Depreciation expense
(5)
|
|
|
|
|
|
||||||||||||||||||||||||
|
Amortization expense
(6)
|
|
|
|
|
|
||||||||||||||||||||||||
| Net capital expenditures |
|
|
|
|
|
||||||||||||||||||||||||
| Total assets |
|
|
|
|
|
||||||||||||||||||||||||
(1)
Non-operating expenses are not allocated to the reportable segments. Non-operating expenses consist of interest expense and deferred financing amortization, foreign exchange gains and losses and other income and expense items outside of income from operations.
(2)
Includes corporate and other general company assets and operations.
(3)
Other segment items for each reportable segment includes operating expenses, which primarily consist of selling, general and administrative expenses. Other segment items excludes the impact of depreciation, intangible amortization, restructuring, stock compensation and other items that neither relate to the ordinary course of the company’s business nor reflect the Company’s underlying business performance.
(4)
Excludes the impacts mentioned in Other segment items.
(5)
Includes depreciation on right of use assets.
(6)
Includes amortization of deferred financing costs and Convertible Notes issuance costs.
19
A reconciliation of our segment information for earnings before income taxes to the corresponding amounts in the Consolidated Statements of Earnings is shown in the table below for the periods presented:
| Three Months Ended | |||||||||||
| Mar 29, 2025 | Mar 30, 2024 | ||||||||||
| Adjusted EBITDA | $ |
|
$ |
|
|||||||
|
Less: Other segment operating expenses
(1)
|
|
|
|||||||||
| Income from operations |
|
|
|||||||||
| Interest expense and deferred financing amortization, net |
|
|
|||||||||
| Net periodic pension benefit (other than service cost & curtailment) |
(
|
(
|
|||||||||
| Other expense (income), net |
|
(
|
|||||||||
| Earnings before income taxes |
|
|
|||||||||
| Provision for income taxes |
|
|
|||||||||
| Net earnings | $ |
|
$ |
|
|||||||
(1) Consists of the impact of depreciation, intangible amortization, restructuring, stock compensation and other items that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance.
Geographic Information
Long-lived assets, not including goodwill and other intangibles (in thousands):
| Mar 29, 2025 | Mar 30, 2024 | ||||||||||
| United States and Canada | $ |
|
$ |
|
|||||||
| Asia |
|
|
|||||||||
| Europe and Middle East |
|
|
|||||||||
| Latin America |
|
|
|||||||||
| Total international | $ |
|
$ |
|
|||||||
| $ |
|
$ |
|
||||||||
15)
Employee Retirement Plans
The following table summarizes the company's net periodic pension benefit related to the AGA Group pension plans (in thousands):
| Three Months Ended | ||||||||||||||
| Mar 29, 2025 | Mar 30, 2024 | |||||||||||||
| Net Periodic Pension Benefit: | ||||||||||||||
| Interest cost | $ |
|
$ |
|
||||||||||
| Expected return on assets |
(
|
(
|
||||||||||||
| Amortization of net loss |
|
|
||||||||||||
| Amortization of prior service cost |
|
|
||||||||||||
| $ |
(
|
$ |
(
|
|||||||||||
16)
Share Repurchases
In November 2017, the company's Board of Directors approved a stock repurchase program authorizing the company to repurchase in the aggregate up to
2,500,000
shares of its outstanding common stock. In May 2022 and July 2024, the company's Board of Directors approved the repurchase of an additional
2,500,000
shares of its outstanding common stock
20
under the current program. The company did not purchase shares of its common stock under the program during the three months ended March 30, 2024
.
During March 29, 2025, the company repurchased
192,048
shares of its common stock under the program for $
29.2
million. As of March 29, 2025,
3,425,938
shares had been purchased under the stock repurchase program and
4,074,062
shares remained authorized for repurchase.
Subsequent to the end of the first quarter, in May 2025, the company's Board of Directors approved the repurchase of an additional
7,500,000
shares of its outstanding common stock under the current program.
The company also treats shares withheld for tax purposes on behalf of employees in connection with the vesting of restricted share grants as common stock repurchases because they reduce the number of shares that would have been issued upon vesting. During the three months ended March 29, 2025 and March 30, 2024, the company repurchased
81,548
and
109,859
shares of its common stock that were surrendered to the company for withholding taxes related to restricted stock vestings for $
13.6
million and $
17.0
million, respectively.
21
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Special Note Regarding Forward-Looking Statements
This report contains forward-looking statements subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. The company cautions readers that these projections are based upon future results or events and are highly dependent upon a variety of important factors which could cause such results or events to differ materially from any forward-looking statements which may be deemed to have been made in this report, or which are otherwise made by or on behalf of the company. Such factors include, but are not limited to, the possibility that the proposed spin-off of the company’s Food Processing business will not be consummated within the anticipated time period or at all and that the company may not realize all or any of the expected benefits of the spin-off; volatility in earnings resulting from goodwill impairment losses, which may occur irregularly and in varying amounts; variability in financing costs and interest rates; quarterly variations in operating results; dependence on key customers; international exposure; risks associated with the company’s foreign operations, including foreign exchange, tariffs and political risks affecting international sales; unfavorable tax law changes and tax authority rulings; ability to protect trademarks, copyrights and other intellectual property; cybersecurity attacks and other breaches in security; changing market conditions, including inflation; the impact of competitive products and pricing; the impact of announced management and organizational changes; the state of the residential construction, housing and home improvement markets; the state of the credit markets, including mortgages, home equity loans and consumer credit; intense competition in the company's business segments including the impact of both new and established global competitors; the timely development and market acceptance of the company’s products; the availability and cost of raw materials; the company's continued ability to realize profitable growth through the sourcing and completion of strategic acquisitions; and other risks detailed herein and from time-to-time in the company’s SEC filings, including the company’s 2024 Annual Report on Form 10-K. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included in this report are made only as of the date hereof and, except as required by federal securities laws and rules and regulations of the SEC, the company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Proposed Separation Transaction
On February 25, 2025, the company announced its intent to separate its Food Processing business through a spin-off of the Food Processing business, under which the stock of Food Processing, as a new independent publicly traded company, will be distributed to Middleby’s shareholders. As of the date hereof, Middleby is targeting completion of the separation by early 2026, subject to certain customary conditions, including, among others, final approval by the company’s Board of Directors and the effectiveness of appropriate filings with the SEC. The spin-off of Food Processing is expected to be tax-free for U.S. federal income tax purposes. There can be no assurance that any separation transaction will ultimately occur or, if one does occur, of its terms or timing.
Current Events
The current domestic and international political environment have contributed to uncertainty surrounding the future state of the global economy. Recent significant trade policy and tariff actions by the U.S. government and many other countries are creating significant uncertainty and potential risks for the company. The tariffs imposed to date have increased the cost of certain raw materials and components, and while the company is actively exploring opportunities to mitigate these increased costs, there can be no assurance of the company’s ability to offset the impact of these tariffs, fully or at all. Furthermore, the imposition of retaliatory tariffs from other countries on the company's exported products could negatively affect demand and future sales volumes. The long-term effects of current and future tariffs and any future trade policy changes on the global economy and the industries in which the company operates remain uncertain and could have a material adverse effect on our financial statements in any particular reporting period. Even in light of such headwinds, we remain focused on delivering strong financial results and executing on our long-term strategy and profitability objectives, as well as continuing to identify operational efficiencies in all aspects of our business.
In addition to tariffs, the company has been negatively impacted by inflation in wages, logistics, energy, raw materials and component costs. Price increases and pricing strategies have been implemented to mitigate the impact of cost inflation on margins and the company continues to actively monitor costs. Consumer demand has and may continue to be impacted by higher inflation levels and uncertainty surrounding the Federal Reserve’s interest rate policy decisions, as rates remained unchanged during the quarter.
The company continues to actively monitor global supply chain, labor and logistics constraints, which have had a negative impact on the company's ability to source parts and complete and ship units. While the company is seeing improvement on certain supply chain and logistics constraints, supply chains for certain key components remain distressed and uncertain given trade policy and tariff actions. The decreased availability of resources and inflationary costs have resulted in heightened
22
inventory levels. To combat these pressures, the company has evaluated alternative sourcing, dual sourcing and collaborated across the organization, where appropriate, without materially presenting new risks or increasing current risks around quality and reliability. Our capital resources have been and the company expects they will continue to be sufficient to address these challenges.
Net Sales Summary
(dollars in thousands)
| Three Months Ended | ||||||||||||||||||||||||||
| Mar 29, 2025 | Mar 30, 2024 | |||||||||||||||||||||||||
| Sales | Percent | Sales | Percent | |||||||||||||||||||||||
| Business Segments: | ||||||||||||||||||||||||||
| Commercial Foodservice | $ | 562,717 | 62.1 | % | $ | 581,413 | 62.7 | % | ||||||||||||||||||
| Food Processing | 167,906 | 18.5 | 171,614 | 18.5 | ||||||||||||||||||||||
| Residential Kitchen | 176,004 | 19.4 | 173,899 | 18.8 | ||||||||||||||||||||||
| Total | $ | 906,627 | 100.0 | % | $ | 926,926 | 100.0 | % | ||||||||||||||||||
Results of Operations
The following table sets forth certain consolidated statements of earnings items as a percentage of net sales for the periods:
| Three Months Ended | ||||||||||||||
| Mar 29, 2025 | Mar 30, 2024 | |||||||||||||
| Net sales | 100.0 | % | 100.0 | % | ||||||||||
| Cost of sales | 61.8 | 62.6 | ||||||||||||
| Gross profit | 38.2 | 37.4 | ||||||||||||
| Selling, general and administrative expenses | 22.4 | 22.2 | ||||||||||||
| Restructuring | 0.3 | 0.4 | ||||||||||||
| Income from operations | 15.5 | 14.8 | ||||||||||||
| Interest expense and deferred financing amortization, net | 2.0 | 2.8 | ||||||||||||
| Net periodic pension benefit (other than service costs) | (0.2) | (0.4) | ||||||||||||
| Other expense (income), net | 0.3 | 0.1 | ||||||||||||
| Earnings before income taxes | 13.4 | 12.3 | ||||||||||||
| Provision for income taxes | 3.2 | 3.0 | ||||||||||||
| Net earnings | 10.2 | % | 9.3 | % | ||||||||||
23
Three Months Ended March 29, 2025 as compared to Three Months Ended March 30, 2024
NET SALES
. Net sales for the three months period ended March 29, 2025 decreased by $20.3 million or 2.2% to $906.6 million as compared to $926.9 million in the three months period ended March 30, 2024. Net sales increased by $22.4 million, or 2.4%, from the fiscal 2024 acquisition
s of GBT Gmb
H Bakery, MaxMac, Emery Thompson, JC Ford and Gorreri. Excluding acquisitions, net sales decreased $42.7 million, or 4.6%, from the prior year period. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars for the three months period ended March 29, 2025 decreased net sales by approximately $7.8 million or 0.8%. Excluding the impact of foreign exchange and acquisitions, sales decreased 3.8% for the three months period ended March 29, 2025 as compared to the prior year period, including a net sales decrease of 2.8% at the Commercial Foodservice Equipment Group, a net sales decrease of 12.9% at the Food Processing Equipment Group and a net sales increase of 2.0% at the Residential Kitchen Equipment Group.
•
Net sales of the Commercial Foodservice Equipment Group decreased by $18.7 million, or 3.2%, to $562.7 million in the three months period ended March 29, 2025, as compared to $581.4 million in the prior year period. Excluding the acquisition of Emery Thompson, net sales decreased $20.8 million, or 3.6% at the Commercial Foodservice Equipment Group. Excluding the impact of foreign exchange, net sales decreased $16.2 million, or 2.8%. Domestically, the company realized a sales decrease of $11.8 million, or 2.8%, to $413.9 million, as compared to $425.7 million in the prior year period. Excluding the acquisition, the net decrease in domestic sales was $13.9 million, or 3.3%. The decrease in domestic sales is related to slower market conditions particularly with lower chain customer store traffic and replacement demand. International sales decreased $6.9 million, or 4.4%, to $148.8 million, as compared to $155.7 million in the prior year period. Excluding the impact of foreign exchange, the net sales decrease in international sales was $2.3 million, or 1.5%. The decrease in international sales is related to market conditions, primarily in the Latin American market.
•
Net sales of the Food Processing Equipment Group decreased by $3.7 million, or 2.2%, to $167.9 million in the three months period ended March 29, 2025, as compared to $171.6 million in the prior year period. Net sales from the acquisitions of GBT GmbH Bakery, MaxMac, JC Ford and Gorreri, accounted for an increase of $20.3 million during the three months period ended March 29, 2025. Excluding the impact of foreign exchange and acquisitions, net sales decreased $22.2 million, or 12.9%, at the Food Processing Equipment Group. Domestically, the company realized a sales decrease of $10.6 million, or 10.2%, to $93.2 million, as compared to $103.8 million in the prior year period. Excluding acquisitions, the net decrease in domestic sales was $19.5 million, or 18.8%. The decrease in domestic sales was driven by lower sales volumes in both the protein and bakery products. International sales increased $6.9 million, or 10.2%, to $74.7 million, as compared to $67.8 million in the prior year period. Excluding the impact of foreign exchange and acquisitions, the net sales decrease in international sales was $2.7 million, or 4.0%. The decrease in international sales is primarily related to slow market conditions in the Asian markets within the bakery group.
•
Net sales of the Residential Kitchen Equipment Group increased by $2.1 million, or 1.2%, to $176.0 million in the three months period ended March 29, 2025, as compared to $173.9 million in the prior year period. Excluding the impact of foreign exchange, net sales increased $3.5 million, or 2.0% at the Residential Kitchen Equipment Group. Domestically, the company realized a sales increase of $5.9 million, or 5.5%, to $112.9 million, as compared to $107.0 million in the prior year period. The increase in domestic sales was primarily driven by growth in the Outdoor products. International sales decreased $3.8 million, or 5.7%, to $63.1 million, as compared to $66.9 million in the prior year period. Excluding the impact of foreign exchange, the net sales decrease in international sales was $2.4 million, or 3.6%. The decrease in international sales was primarily driven by slow market conditions in the European market.
24
GROSS PROFIT
. Gross profit decreased to $345.9 million in the three months period ended March 29, 2025, as compared to $346.4 million in the prior year period, primarily driven by lower sales volumes. The impact of foreign exchange rates decreased gross profit by approximately $2.7 million. The gross margin rate was 38.2% in the three months period ended March 29, 2025, as compared to 37.4% in the prior year period.
•
Gross profit at the Commercial Foodservice Equipment Group increased by $4.5 million, or 2.0%, to $232.3 million in the three months period ended March 29, 2025, as compared to $227.8 million in the prior year period.
Excluding the acquisition of Emery Thompson, gross profit
increased
by
$3.3 million
.
The impact of foreign exchange rates decreased gross profit by approximately $1.7 million. The gross margin rate increased to 41.3%, as compared to 39.2% in the prior year period, related to profitability initiatives and product mix. The gross margin rate, excluding the impact of foreign exchange and the acquisition, was 41.2%.
•
Gross profit at the Food Processing Equipment Group decreased by $5.6 million, or 8.4%, to $61.0 million in the
three months period ended March 29, 2025, as compared to $66.6 million in the prior year period. Gross profit from the acquisitions of
GBT GmbH Bakery, MaxMac, JC Ford and Gorreri increased gross profit by $6.9 million. The impact of foreign exchange rates decreased gross profit by approximately $0.7 million.
Excluding the acquisitions and the impact of foreign exchange rates, gross profit decreased by $
11.8 million. The gross profit margin rate decreased to 36.3%, as compared to 38.8% in the prior year period, primarily related to lower sales volumes and product mix. The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 36.7%.
•
Gross profit at the Residential Kitchen Equipment Group increased by $2.2 million, or 4.3%, to $53.4 million in the three months period ended March 29, 2025, as compared to $51.2 million in the prior year period. The impact of foreign exchange rates decreased gross profit by approximately $0.3 million. Gross profit increased related to higher sales volume and benefits from cost reduction initiatives. The gross margin rate increased to 30.3%, as compared to 29.4% in the prior year period. The gross margin rate excluding the impact of foreign exchange was 30.3%.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
. Combined selling, general and administrative expenses decreased to $202.6 million in the three months period ended March 29, 2025, as compared to $206.0 million in the three months period ended March 30, 2024. As a percentage of net sales, selling, general, and administrative expenses were 22.4% in the three months period ended March 29, 2025 as compared to 22.2% in the three months period ended March 30, 2024.
Selling, general and administrative expenses reflect increased costs of $5.7 million associated with acquisitions, including $1.3 million of intangible amortization expense. Selling, general and administrative expenses decreased $7.2 million related to reduced compensation costs including commissions and stock based compensation and $2.7 million related to intangible amortization expense. This was partially offset by an increase in strategic transaction costs of $3.5 million. Foreign exchange rates had a favorable impact of $2.0 million.
RESTRUCTURING EXPENSES
.
Restructuring expenses decreased $0.5 million to $2.7 million for the three months period ended March 29, 2025, as compared to $3.2 million for the three months period ended March 30, 2024. Restructuring expenses in the three months period ended March 29, 2025 related primarily to headcount reductions and facility consolidations within the Residential Kitchen Equipment Group and Commercial Foodservice Group. Restructuring expenses in the three months period ended March 30, 2024 related primarily to headcount reductions and facility consolidations within all three segments.
NON-OPERATING EXPENSES
. Interest and deferred financing amortization costs were $18.4 million in the three months period ended March 29, 2025, as compared to $26.3 million in the prior year period, primarily reflecting the decrease in net debt levels. Net periodic pension benefit (other than service costs) decreased $2.2 million to $1.5 million in the three months period ended March 29, 2025, as compared to $3.7 million in the prior year period, related to the increase in discount rate used to calculate the interest cost and decrease in expected return on assets as a result of the lower asset value and slightly lower assumed return on assets than in prior years. Other expense was $2.3 million in the three months period ended March 29, 2025, as compared to other income of $0.3 million in the prior year period and consists mainly of net foreign exchange gains and losses.
INCOME TAXES
. A tax provision of $29.1 million, at an effective rate of 24.0%, was recorded during the three months period ended March 29, 2025, as compared to $28.3 million at an effective rate of 24.6%, in the prior year period.
The effective tax rate for the
three months period ended March 29, 2025
is higher than the U.S. statutory tax rate of 21% primarily due to state taxes and foreign tax rate differentials.
25
Financial Condition and Liquidity
Total cash and cash equivalents increased by $55.6 million to $745.1 million at March 29, 2025 from $689.5 million at December 28, 2024. Total debt amounted to $2.4 billion at March 29, 2025 and December 28, 2024.
OPERATING ACTIVITIES
. Net cash provided by operating activities after changes in assets and liabilities amounted to $141.1 million as compared to $140.9 million in the prior year.
During the three months period ended March 29, 2025, working capital changes impacted operating cash flows primarily driven by increased inventory levels of $28.7 million, offset by an decrease in prepaid expenses and other assets of $19.3 million due to impacts from the timing of payments and status of over-time revenue contracts, an increase in accounts payable of $19.1 million and an increase of $11.1 million in accrued expenses and other liabilities, including impacts from the timing of payments made for taxes, various customer programs and incentive programs.
INVESTING ACTIVITIES.
During the three months period ended March 29, 2025, net cash used for investing activities amounted to $34.8 million.
This included
$33.7 million
to upgrade production equipment and manufacturing facilities.
FINANCING ACTIVITIES.
Net cash flows used for financing activities amounted to $57.1 million during the three months period ended March 29, 2025. The company’s borrowing activities during 2025 included $10.9 million of net repayments under its Credit Facility. Additionally, during the first quarter of 2025, the company repurchased $42.8 million of Middleby common stock shares. This was comprised of $13.6 million to repurchase 81,548 shares of Middleby common stock that were surrendered to the company for withholding taxes related to restricted stock vestings and $29.2 million used to repurchase shares of its common stock under a repurchase program.
At March 29, 2025, the company was in compliance with all covenants pursuant to its borrowing agreements. The company believes that its current capital resources, including cash and cash equivalents, cash expected to be generated from operations, funds available from its current lenders and access to the credit and capital markets will be sufficient to finance its operations, debt service obligations, capital expenditures, product development and expenditures for the foreseeable future.
Recently Issued Accounting Standards
See Part I, Item 1, Notes to Condensed Consolidated Financial Statements, Note 4 - Recently Issued Accounting Standards, of this Quarterly Report on Form 10-Q.
Critical Accounting Policies and Estimates
Management's discussion and analysis of financial condition and results of operations are based upon the company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the company to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses as well as related disclosures. On an ongoing basis, the company evaluates its estimates and judgments based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions and any such differences could be material to the company's consolidated financial statements. There have been no changes in the company's critical accounting policies, which include revenue recognition, inventories, goodwill and indefinite-life intangibles, convertible debt, pensions benefits, and income taxes, as discussed in the company's Annual Report on Form 10-K for the year ended December 28, 2024 (the “2024 Annual Report on Form 10-K”).
26
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
The company is exposed to market risk related to changes in interest rates. The following table summarizes the maturity of the company’s debt obligations:
|
Twelve Month Period coinciding with the end of the company's Fiscal First Quarter
|
Variable Rate
Debt |
|||||||
|
2026
(1)
|
$ | 789,860 | ||||||
| 2027 | 1,589,435 | |||||||
| 2028 | 876 | |||||||
| 2029 | 721 | |||||||
| 2030 and thereafter | 4,281 | |||||||
| $ | 2,385,173 | |||||||
The company is exposed to interest rate risk on its floating-rate debt. The company has entered into interest rate swaps to fix the interest rate applicable to certain of its variable-rate debt. Prior to July 1, 2023, the company amended its Credit Facility and the existing interest rate swap agreements to transition the interest reference rate from one-month LIBOR to one-month Secured Overnight Financing Rate ("SOFR"). There were no other changes to the company's Credit Facility or timing of cash flows. The amendment was entered into because the LIBOR rate historically used was no longer published after June 30, 2023. The company utilized expedients within ASC 848 to conclude that this amendment should be treated as a non-substantial modification of the existing contract, resulting in no impact to the company's consolidated financial statements. The company has designated these swaps as cash flow hedges and all changes in fair value of the swaps are recognized in accumulated other comprehensive income. As of March 29, 2025, the fair value of these instruments was an asset of $22.8 million. The change in fair value of these swap agreements in the first three months of 2025 was a loss of $5.4 million, net of taxes. The potential net loss on fair value for such instruments from a hypothetical 10% adverse change in quoted interest rates would not have a material impact on the company's financial position, results of operations and cash flows.
The company has Convertible Notes that were issued in August 2020, which carry a fixed annual interest rate of 1.00%. As such, the company does not have economic interest rate exposure on the Convertible Notes. The fair value of the Convertible Notes is subject to interest rate risk, market risk and other factors due to its conversion feature. The fair value of the Convertible Notes is also affected by the price and volatility of the company’s common stock and will generally increase or decrease as the market price of our common stock changes. The interest and market value changes affect the fair value of the Convertible Notes but do not impact the company’s financial position, cash flows or results of operations due to the fixed nature of the debt obligation. Additionally, the company carries the Convertible Notes at face value, less any unamortized discount on the balance sheet and presents the fair value for disclosure purposes only.
Foreign Exchange Derivative Financial Instruments
The company uses derivative financial instruments, principally foreign currency forward purchase and sale contracts with terms of less than one year, to hedge its exposure to changes in foreign currency exchange rates. The company’s primary hedging activities are to mitigate its exposure to changes in exchange rates on intercompany and third-party trade receivables and payables. The company does not currently enter into derivative financial instruments for speculative purposes. In managing its foreign currency exposures, the company identifies and aggregates naturally occurring offsetting positions and then hedges residual balance sheet exposures. The potential net loss on fair value for such instruments from a hypothetical 10% adverse change in quoted foreign exchange rates would not have a material impact on the company's financial position, results of operations and cash flows. The fair value of the forward and option contracts was a loss of $1.0 million at the end of the first quarter of 2025.
Derivative financial instruments are recognized on the balance sheet as either an asset or a liability measured at fair value. Changes in the market value and the related foreign exchange gains and losses are recorded in the statement of earnings.
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Item 4. Controls and Procedures
The company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As of March 29, 2025, the company's management, with the participation of the company's Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the company's disclosure controls and procedures. Based on the foregoing, the company's Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of this period.
During the quarter ended March 29, 2025, there has been no change in the company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting.
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PART II. OTHER INFORMATION
The company was not required to report the information pursuant to Items 1 through 6 of Part II of Form 10-Q for the three months ended March 29, 2025, except as follows:
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
c) Issuer Purchases of Equity Securities
|
Total
Number of Shares Purchased |
Average
Price Paid per Share |
Total Number
of Shares Purchased as Part of Publicly Announced Plan or Program |
Maximum
Number of
Shares that May
Yet be
Purchased
Under the Plan
or Program
(1)
|
||||||||||||||||||||
| December 29, 2024 to January 25, 2025 | 85,183 | $ | 138.25 | 85,183 | 4,180,927 | ||||||||||||||||||
| January 26, 2025 to February 22, 2025 | 44,890 | 168.85 | 44,890 | 4,136,037 | |||||||||||||||||||
| February 23, 2025 to March 29, 2025 | 61,975 | 157.96 | 61,975 | 4,074,062 | |||||||||||||||||||
| Quarter ended March 29, 2025 | 192,048 | $ | 151.76 | 192,048 | 4,074,062 | ||||||||||||||||||
(1) On November 7, 2017, the company's Board of Directors resolved to terminate the company's existing share repurchase program, effective as of such date, which was originally adopted in 1998, and approved a new stock repurchase program. This program authorizes the company to repurchase in the aggregate up to 2,500,000 shares of its outstanding common stock. In May 2022 and July 2024, the company's Board of Directors approved the repurchase of an additional 2,500,000 shares of its outstanding common stock under the current program. As of March 29, 2025, the total number of shares authorized for repurchase under the program is 7,500,000 shares. As of March 29, 2025, 3,425,938 shares had been purchased under the stock repurchase program and 4,074,062 shares remained authorized for repurchase.
In the consolidated financial statements, the company also treats shares withheld for tax purposes on behalf of employees in connection with the vesting of restricted share grants as common stock repurchases because they reduce the number of shares that would have been issued upon vesting. These withheld shares are not considered common stock repurchases under the authorized common stock repurchase plan and accordingly are not included in the common stock repurchase totals in the preceding table.
Subsequent to the end of the first quarter, in May 2025, the company's Board of Directors approved the repurchase of an additional 7,500,000 shares of its outstanding common stock under the current program.
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Item 6. Exhibits
| Exhibits: | |||||
| Exhibit 10.1 – |
|
||||
| Exhibit 31.1 – | |||||
| Exhibit 31.2 – | |||||
| Exhibit 32.1 – | |||||
| Exhibit 32.2 – | |||||
| Exhibit 101 – |
Financial statements on Form 10-Q for the quarter ended March 29, 2025, filed on May 8, 2025, formatted in Inline Extensive Business Reporting Language (iXBRL); (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of earnings, (iii) condensed statements of cash flows, (iv) notes to the condensed consolidated financial statements.
|
||||
| Exhibit 104 – | Cover Page Interactive Data File (formatted as Inline Extensive Business Reporting Language (iXBRL) and contained in Exhibit 101). | ||||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| THE MIDDLEBY CORPORATION | ||||||||||||||
| (Registrant) | ||||||||||||||
| Date: | May 8, 2025 | By: | /s/ Bryan E. Mittelman | |||||||||||
| Bryan E. Mittelman | ||||||||||||||
| Chief Financial Officer | ||||||||||||||
31
TABLE OF CONTENTS
Part I. Financial InformationItem 1. Condensed Consolidated Financial StatementsItem 2. Management's Discussion and Analysis Of Financial Condition and Results Of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPart II. Other InformationItem 2. Unregistered Sales Of Equity Securities and Use Of ProceedsItem 6. Exhibits