Financial Data and Key Metrics Changes - The company authorized an additional $7.5 billion in shares for its accelerated buyback program, representing 21% of outstanding equity [3][4] - Operating cash flows reached over $141 million, the highest for the first quarter, with free cash flows totaling $107 million for the quarter and $620 million for the trailing twelve months [12] - The company has successfully reduced its leverage from three times to two times over the past two years, maintaining a strong balance sheet [12] Business Line Data and Key Metrics Changes - The residential segment saw growth primarily due to outdoor products, with margins holding well [16] - The commercial foodservice business experienced success from investments in the ice and beverage platform, although muted buying levels from major chain customers offset some gains [14] - Food processing revenues dropped due to customer-driven delivery delays, but the company anticipates higher sequential revenue in Q2 [15][19] Market Data and Key Metrics Changes - The company is facing tariff-related costs estimated to increase annual expenses by approximately $150 million to $200 million, with a significant portion attributed to foreign-sourced componentry from China [6][18] - The company expects to offset tariff impacts by the end of the year through operational actions and pricing adjustments [7][18] Company Strategy and Development Direction - The company plans to separate its food processing business into a standalone public company by early 2026, aiming to unlock shareholder value and enhance strategic focus [4][5] - The company is focusing on market expansion opportunities in adjacent markets such as poultry, pet foods, and snacks [5][22] - Strategic investments have been made to drive sustainable long-term growth, particularly in automation, digital technologies, and IoT connectivity [8][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenging market conditions affecting major chain customers but remains optimistic about sequential revenue increases throughout the year [17][20] - The company is confident in its ability to navigate tariff challenges and believes it is well-positioned to capitalize on market opportunities [7][45] - The long-term outlook for the food processing segment remains bullish, with a robust pipeline of opportunities [21][24] Other Important Information - The company plans to hold a dedicated Shareholder Day in Q4 to present further details on the strategic roadmap for the food processing business [6] - The company has received multiple industry awards for its innovative products, highlighting its commitment to innovation [10][99] Q&A Session Summary Question: 2025 sales guidance and segment outlook - Management indicated that the full-year outlook is primarily driven by the commercial segment, with expectations for improvement over the year despite current challenges [30][32] Question: Buyback decision rationale - The buyback decision was influenced by the company's strong cash flow, balance sheet position, and belief that the current share price does not reflect the business's strength [39][41] Question: Tariff impact and share gains - Management expressed confidence in offsetting tariff costs through operational initiatives and highlighted opportunities for share gains due to a strong U.S. manufacturing footprint [44][46] Question: Segment-level tariff cost allocation - The estimated tariff impact is weighted more towards commercial (approximately 70%), followed by residential (20%), and food processing (10%) [53] Question: Revenue outlook and new store openings - Management expects sequential improvement in revenue for Q2 and noted that new store openings are anticipated to be higher in the second half of the year [62] Question: Competitive pricing landscape - The company has observed competitors implementing price increases ranging from 10% to 25%, while it plans a mid-single-digit increase [83]

Financial Data and Key Metrics Changes - The company authorized an additional $7.5 billion in shares for its accelerated buyback program, representing 21% of outstanding equity, reflecting confidence in the business [2][3] - Operating cash flows reached over $141 million, the highest for the first quarter, with free cash flows totaling $107 million for the quarter and $620 million for the trailing twelve months [9][10] - The company has successfully reduced its leverage from three times to two times over the past two years, maintaining a strong balance sheet [9][10] Business Line Data and Key Metrics Changes - The residential segment saw growth primarily due to outdoor products, with margins holding steady [12][19] - The commercial foodservice business experienced success from investments in the ice and beverage platform, although muted buying levels from major chain customers offset some gains [11][12] - Food processing revenues dropped due to customer-driven delivery delays, but the company anticipates higher sequential revenue in Q2 [12][16] Market Data and Key Metrics Changes - The company is actively working to mitigate tariff-related costs, which are expected to increase annual expenses by approximately $150 million to $200 million [5][12] - The impact of tariffs is weighted more towards the commercial and residential segments, with an estimated 70% impact on commercial, 20% on residential, and 10% on food processing [49][50] Company Strategy and Development Direction - The company plans to separate its food processing business into a standalone public company by early 2026, aiming to unlock shareholder value and enhance operational focus [3][4] - Strategic investments have been made to drive sustainable long-term growth, focusing on automation, digital technologies, and expanding into adjacent markets like poultry and snacks [6][19] - The company is committed to using the majority of its free cash flow for share repurchases while maintaining strategic growth investments [2][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating current market dynamics and expects to emerge stronger despite challenges posed by tariffs and muted customer spending [5][13] - The long-term outlook for the food processing segment remains bullish, with a robust pipeline and expectations for sequential revenue increases [18][20] - Management acknowledged the uncertainty in the operating environment but remains optimistic about the company's positioning and growth potential over the next few years [22][21] Other Important Information - The company plans to hold a dedicated Shareholder Day in Q4 to present further details on the strategic roadmap for the food processing business [4] - Recent industry awards for new products highlight the company's commitment to innovation and market leadership [7][96] Q&A Session Summary Question: What is the 2025 sales guidance and where are the biggest changes? - The full-year outlook is primarily driven by the commercial segment, with changes due to macroeconomic factors and trade environment uncertainties affecting investment decisions across segments [25][26] Question: What informed the buyback decision? - The decision was influenced by the company's strong valuation, cash flow growth, and the belief that the share price does not reflect the business's strength [31][32] Question: How are tariffs impacting the business and what are the strategies to mitigate them? - Tariffs are expected to have a significant impact, particularly on commercial and residential segments, but the company is confident in offsetting these costs through pricing actions and operational initiatives [38][50] Question: What is the revenue outlook for the second half of 2025? - The company expects sequential improvement in revenue, with new store openings from major customers contributing positively, although some delays may occur [59][60] Question: Can you provide an update on new product rollouts and innovations? - The company is seeing good momentum with the Open Kitchen initiative and has several exciting new products in the pipeline, including advancements in beverage dispensing and cooking technologies [88][92]

Core Insights - Middleby (MIDD) reported revenue of $906.63 million for Q1 2025, a year-over-year decline of 2.2%, with an EPS of $2.08 compared to $1.89 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $941.15 million, resulting in a surprise of -3.67%, while the EPS exceeded the consensus estimate of $1.94 by +7.22% [1] Revenue Breakdown - Commercial Foodservice revenue was $562.72 million, below the average estimate of $579.76 million, reflecting a year-over-year decline of -4.7% [4] - Residential Kitchen revenue reached $176 million, slightly below the average estimate of $182.68 million, showing a year-over-year increase of +1.2% [4] - Food Processing revenue was reported at $167.91 million, compared to the estimated $178.72 million, marking a year-over-year increase of +3.2% [4] Segment Operating Income - Commercial Foodservice segment operating income was $132.07 million, exceeding the average estimate of $128.21 million [4] - Residential Kitchen segment operating income was $11.81 million, surpassing the average estimate of $9.20 million [4] - Food Processing segment operating income was $23.51 million, significantly lower than the estimated $34.98 million [4] Stock Performance - Over the past month, Middleby shares have returned +8.2%, compared to the Zacks S&P 500 composite's +10.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Middleby (MIDD) came out with quarterly earnings of $2.08 per share, beating the Zacks Consensus Estimate of $1.94 per share. This compares to earnings of $1.89 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 7.22%. A quarter ago, it was expected that this food preparation equipment company would post earnings of $2.50 per share when it actually produced earnings of $2.88, delivering a surprise of 15.20%.Over the last four qua ...

Financial Performance - Middleby's Q1 2025 net sales decreased by 2.2% to $906.6 million, compared to $926.9 million in Q1 2024[8] - Adjusted EBITDA for Q1 2025 was $182.1 million, a decrease of 2.0% compared to $185.8 million in Q1 2024[8] - Operating cash flow remained relatively stable at $141.1 million in Q1 2025, compared to $140.9 million in Q1 2024[8] - Middleby repurchased $29 million of common stock in Q1 2025 and an additional $21 million to date in Q2 2025[25] Segment Performance - Commercial Foodservice net sales decreased by 3.2% to $562.7 million in Q1 2025[13] - Residential Kitchen net sales increased by 1.2% to $176.0 million in Q1 2025[16] - Food Processing net sales decreased by 2.2% to $167.9 million in Q1 2025[19] Strategic Initiatives - Middleby plans to allocate the vast majority of free cash flow to share repurchases, aiming to reduce outstanding shares by 6–8% annually[2] - The company is targeting a leverage ratio of 2.0–2.5x[2] - Middleby is progressing with the Food Processing spin-off, targeted for completion by early 2026[4] - Preliminary tariff cost effect is projected to be $150–200 million annually, with China representing roughly 50% of the identified cost exposure[3] Regional Performance - In Commercial Foodservice, U S and Canada revenue was $413.9 million, a decrease of 2.8%[14] - In Residential Kitchen, U S and Canada revenue was $112.9 million, an increase of 5.5%[17] - In Food Processing, U S and Canada revenue was $93.2 million, a decrease of 10.2%[20]

[First Quarter 2025 Results Overview](index=1&type=section&id=First%20Quarter%202025%20Results%20Overview) [Key Announcements & Financial Highlights](index=1&type=section&id=Key%20Announcements%20%26%20Financial%20Highlights) The Middleby Corporation reported its first-quarter 2025 results, announcing an accelerated share repurchase program funded by free cash flow, alongside plans to separate its Food Processing business by early 2026, and a significant increase in share buyback authorization to **11.4 million shares**, representing **21%** of equity - Announced the planned separation of its Food Processing business into a separate public company, expected to be completed in early 2026[1](index=1&type=chunk) - The company will accelerate its share repurchase program, intending to use the vast majority of its free cash flow for buybacks[1](index=1&type=chunk)[3](index=3&type=chunk) - The Board of Directors increased the total share repurchase authorization by **7.5 million shares**, bringing the total to **11.4 million shares**, or **21%** of the company's outstanding equity[3](index=3&type=chunk) [Strategic & Operational Updates](index=1&type=section&id=Strategic%20%26%20Operational%20Updates) [Share Repurchasing Program](index=1&type=section&id=Share%20Repurchasing) The company prioritizes returning capital to shareholders through share repurchases, believing its market valuation is undervalued, with the Board increasing total authorization to **11.4 million shares** and approximately **$50 million** repurchased year-to-date - Management believes the current market valuation does not reflect the inherent strength of the business, prompting a focus on returning capital to shareholders[3](index=3&type=chunk) Share Repurchase Program Details | Metric | Value | | :--- | :--- | | Increased Authorization | 7.5 million shares | | Total Authorized Shares | 11.4 million shares | | % of Outstanding Equity | 21% | | Repurchased Year-to-Date | ~$50 million | [Tariff Impact](index=1&type=section&id=Tariff%20Impact) The company anticipates an annual cost increase of **$150 million to $200 million** due to recent tariffs, but expects to fully offset these costs through operating initiatives and pricing actions by year-end - Estimated annual cost increase from tariffs is between **$150 million and $200 million**[4](index=4&type=chunk) - The company expects to fully offset these cost increases through operating initiatives and pricing actions, with benefits fully implemented by year-end[4](index=4&type=chunk) [Detailed Financial Performance](index=1&type=section&id=Detailed%20Financial%20Performance) [First Quarter Financial Results](index=1&type=section&id=2025%20First%20Quarter%20Financial%20Results) In Q1 2025, net sales decreased by **2.2%** (**3.8% organically**) year-over-year, while operating income increased to **$141 million** from **$137 million**, adjusted EBITDA slightly decreased to **$182 million**, and operating cash flow remained stable at **$141 million**, with net leverage at **2.0x** Q1 2025 vs Q1 2024 Key Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales Growth | -2.2% | - | - | | Organic Sales Growth | -3.8% | - | - | | Operating Income | $141M | $137M | +2.9% | | Adjusted EBITDA | $182M | $186M | -2.2% | | Operating Cash Flow | $141M | $141M | 0% | - Net leverage was **2.0x** at the end of the first quarter[6](index=6&type=chunk)[11](index=11&type=chunk) - Net debt decreased to **$1.6 billion** from **$1.7 billion** at the end of fiscal 2024[11](index=11&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) The Commercial Foodservice segment saw a **2.8%** organic sales decline but maintained a strong **26.7%** organic adjusted EBITDA margin, while Residential Kitchen grew organic sales by **2.0%** with an improved **11.6%** margin, and Food Processing experienced a significant **12.9%** organic sales decline and a drop in its adjusted EBITDA margin to **17.9%** Q1 2025 Organic Net Sales Growth by Segment | Segment | Organic Net Sales Growth | | :--- | :--- | | Commercial Foodservice | (2.8)% | | Residential Kitchen | 2.0% | | Food Processing | (12.9)% | | **Total Company** | **(3.8)%** | Q1 2025 Organic Adjusted EBITDA Margin by Segment | Segment | Organic Adjusted EBITDA Margin | | :--- | :--- | | Commercial Foodservice | 26.7% | | Residential Kitchen | 11.6% | | Food Processing | 17.9% | | **Total Company** | **20.0%** | [Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) [Condensed Consolidated Statements of Earnings](index=3&type=section&id=THE%20MIDDLEBY%20CORPORATION%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20EARNINGS) For Q1 2025, Middleby reported net sales of **$906.6 million**, a decrease from **$926.9 million** in Q1 2024, yet net earnings increased to **$92.4 million** from **$86.6 million**, and diluted EPS rose to **$1.69** from **$1.59**, benefiting from lower interest and restructuring expenses Q1 2025 Statement of Earnings (Selected Items, in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $906,627 | $926,926 | | Gross profit | $345,933 | $346,358 | | Income from operations | $140,598 | $137,133 | | Net earnings | $92,352 | $86,568 | | Diluted EPS | $1.69 | $1.59 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=THE%20MIDDLEBY%20CORPORATION%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 29, 2025, total assets were **$7.40 billion**, a slight increase from **$7.28 billion** at year-end 2024, with total liabilities at **$3.67 billion**, stockholders' equity increasing to **$3.73 billion** from **$3.64 billion**, and cash and cash equivalents notably rising to **$745.1 million** Balance Sheet Highlights (in thousands) | Account | Mar 29, 2025 (Thousands) | Dec 28, 2024 (Thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $745,143 | $689,533 | | Total assets | $7,401,381 | $7,283,151 | | Long-term debt | $2,341,295 | $2,351,118 | | Stockholders' equity | $3,729,921 | $3,638,431 | | Total liabilities and stockholders' equity | $7,401,381 | $7,283,151 | [Non-GAAP Segment Information](index=5&type=section&id=THE%20MIDDLEBY%20CORPORATION%20NON-GAAP%20SEGMENT%20INFORMATION%20%28UNAUDITED%29) In Q1 2025, Commercial Foodservice generated the highest adjusted EBITDA at **$151.4 million** (**26.9%** margin), Residential Kitchen's adjusted EBITDA nearly doubled to **$20.6 million** (**11.7%** margin), while Food Processing's adjusted EBITDA fell to **$30.1 million** (**17.9%** margin) from **$39.8 million** (**23.2%** margin) in Q1 2024 Q1 2025 vs Q1 2024 Segment Adjusted EBITDA (in thousands) | Segment | Q1 2025 Adj. EBITDA (Thousands) | Q1 2025 Margin | Q1 2024 Adj. EBITDA (Thousands) | Q1 2024 Margin | | :--- | :--- | :--- | :--- | :--- | | Commercial Foodservice | $151,407 | 26.9% | $151,932 | 26.1% | | Residential Kitchen | $20,616 | 11.7% | $11,202 | 6.4% | | Food Processing | $30,066 | 17.9% | $39,819 | 23.2% | | **Total Company** | **$182,080** | **20.1%** | **$185,785** | **20.0%** | [Non-GAAP Reconciliations](index=6&type=section&id=THE%20MIDDLEBY%20CORPORATION%20NON-GAAP%20INFORMATION%20%28UNAUDITED%29) The company reported adjusted net earnings of **$111.3 million**, or **$2.08** per diluted share, for Q1 2025, an increase from **$101.4 million**, or **$1.89** per share, in the prior-year period, with free cash flow for the quarter at **$107.4 million**, a decrease from **$127.2 million** in Q1 2024, primarily due to increased capital expenditures Reconciliation of Net Earnings to Adjusted Net Earnings (in thousands, except per share) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net earnings | $92,352 | $86,568 | | Adjusted net earnings | $111,305 | $101,396 | | Diluted EPS | $1.69 | $1.59 | | Adjusted diluted EPS | $2.08 | $1.89 | Free Cash Flow Calculation (in thousands) | Metric | Q1 2025 (Thousands) | Q1 2024 (Thousands) | | :--- | :--- | :--- | | Cash flow from operating activities | $141,134 | $140,901 | | Less: Capital expenditures | ($33,732) | ($13,743) | | **Free cash flow** | **$107,402** | **$127,158** |

Company Overview - The Middleby Corporation (MIDD) shares increased by 14.7% to close at $143.55, following a period of 19.4% loss over the past four weeks, indicating a significant rebound in stock performance [1] - The rally is attributed to strong momentum in the Food Processing Equipment Group segment, supported by a robust backlog and strong incoming order growth [2] Financial Performance - Middleby is expected to report quarterly earnings of $1.94 per share, reflecting a year-over-year increase of 2.7%, with revenues projected at $943.61 million, up 1.8% from the previous year [3] - The consensus EPS estimate has been revised 0.8% higher in the last 30 days, suggesting a positive trend that may lead to price appreciation [4] Industry Context - Middleby operates within the Zacks Manufacturing - General Industrial industry, where another company, Xometry (XMTR), also experienced a significant stock increase of 14.1% [4] - Xometry's EPS estimate for the upcoming report remains unchanged at $0, representing a 100% increase compared to the previous year's EPS [5]

Core Viewpoint - The Middleby Corporation (MIDD) is experiencing positive momentum in its Food Processing Equipment Group segment, supported by strategic acquisitions and consistent shareholder rewards through dividends [1][3]. Group 1: Business Strength - The Food Processing Equipment Group segment is showing solid momentum, with a robust backlog and strong incoming order growth, particularly driven by increased demand for bakery and protein products in European markets [3]. - Sales in this segment increased by 14.4% year over year in the fourth quarter of 2024 [3]. Group 2: New Product Introduction - Middleby is focused on launching new products and upgrading existing ones, having introduced several new products over the past year, including MP Equipment and PIZZABOT [4]. - The company is gaining market share in new product categories, particularly in beverage and ice, and is well-positioned to benefit from strong demand for ventless cooking products [4]. Group 3: Expansion Efforts - Middleby is expanding its market presence through acquisitions, which contributed to a 2.1% year-over-year sales increase in the fourth quarter of 2024 [5]. - Recent acquisitions include Gorreri Food Processing Technology and JC Ford, which are expected to enhance Middleby's capabilities in advanced baked goods and snack food categories, respectively [5][6]. - The acquisition of Emery Thompson improved the company's offerings in the frozen dessert category, while the buyout of GBT GmbH Bakery Technology strengthened its European presence in large-scale baking [6]. Group 4: Stock Performance - Shares of Middleby have gained 2.6% over the past six months, contrasting with an 18% decline in the industry [7].

Core Insights - The Middleby Corporation announced a strategic separation of its Food Processing business into a stand-alone public company, expected to be completed by early 2026, creating two focused entities: Middleby Corporation (RemainCo) and Middleby Food Processing (SpinCo) [2][3] Financial Performance - The Food Processing segment has achieved an $800 million revenue run rate with 24% margins, indicating its readiness to operate as an independent entity [3] - Middleby reported its strongest margins of the year in Q4, with adjusted EBITDA reaching a record 24.8% [4] - The Food Processing segment achieved a 29.6% adjusted EBITDA margin in Q4, up 200 basis points year-over-year [5] - The Residential segment showed signs of recovery with Q4 revenue of $185 million, reflecting a year-over-year decline of only 2.4%, and achieved its highest margin in 18 months at 13% [6] Innovation and Growth Initiatives - Middleby is focusing on innovation, showcasing nine live cooking demonstrations at the NAFEM show, including high-volume restaurants powered by digital robotic automation [6][8] - The company introduced a new profitability tool designed to help restaurant operators optimize frying processes [7] Cash Flow and Financial Health - Middleby generated record free cash flow of $229 million in Q4 and over $640 million for the full year, achieving a 140% free cash flow conversion rate [9] - The company reduced inventory by over $250 million in two years, with operating cash flows of $687 million for the year [9] Future Outlook - For 2025, management projects low single-digit organic revenue growth with profitability expected to grow faster than revenue, particularly in the Food Processing business, which is anticipated to deliver mid-single-digit organic growth [10] - The Commercial and Residential business will continue to focus on strategic growth initiatives in automation, electrification, and digital technologies, while Food Processing will pursue expansion into adjacent markets and strategic acquisitions [11]

Financial Performance - Net sales for fiscal 2024 decreased by $161.4 million, or 4.0%, to $3,875.2 million compared to $4,036.6 million in fiscal 2023[174]. - The Commercial Foodservice Equipment Group's net sales decreased by $102.2 million, or 4.1%, to $2,419.3 million in fiscal 2024[175]. - Gross profit decreased to $1,470.4 million in fiscal 2024, with a gross margin rate of 37.9% compared to 38.0% in fiscal 2023[176]. - Selling, general and administrative expenses decreased to $762.5 million in fiscal 2024, representing 19.7% of net sales[177]. - Income from operations increased by $21.3 million to $656.2 million in fiscal 2024, with an operating income margin of 16.9%[181]. - The Food Processing Equipment Group's net sales increased by $10.4 million, or 1.4%, to $731.0 million in fiscal 2024[175]. - International sales for the Food Processing Equipment Group increased by $46.3 million, or 19.2%, to $287.6 million in fiscal 2024[175]. - Domestic sales for the Residential Kitchen Equipment Group decreased by $52.2 million, or 10.2%, to $461.1 million in fiscal 2024[175]. - Gross profit at the Commercial Foodservice Equipment Group decreased by $52.3 million, or 5.2%, to $958.3 million in fiscal 2024, while the gross margin rate slightly decreased to 39.6%[182]. - Gross profit at the Food Processing Equipment Group increased by $16.2 million, or 5.9%, to $290.6 million in fiscal 2024, with a gross margin rate of 39.8%[182]. - Gross profit at the Residential Kitchen Equipment Group decreased by $31.4 million, or 12.6%, to $218.6 million in fiscal 2024, with a gross margin rate of 30.2%[182]. - Net sales in fiscal 2023 increased by $3.7 million, or 0.1%, to $4,036.6 million, with a 3.0% increase attributed to acquisitions[186]. - Net sales of the Commercial Foodservice Equipment Group increased by $126.7 million, or 5.3%, to $2,521.5 million in fiscal 2023[188]. - Net sales of the Food Processing Equipment Group increased by $130.6 million, or 22.1%, to $720.6 million in fiscal 2023[188]. - Net sales of the Residential Kitchen Equipment Group decreased by $253.6 million, or 24.2%, to $794.5 million in fiscal 2023[188]. Cash Flow and Financial Position - Total cash and cash equivalents increased by $442.0 million to $689.5 million at December 28, 2024, from $247.5 million at December 30, 2023[198]. - Net cash provided by operating activities was $686.8 million, up from $628.8 million in the prior year[198]. - Net cash used for investing activities amounted to $158.5 million, including $111.7 million for acquisitions and $49.3 million for production equipment upgrades[201]. - Net cash flows used for financing activities totaled $73.8 million, including $32.8 million in net repayments under its Credit Facility and $34.7 million in share repurchases[202]. - The company believes its current capital resources will be sufficient to finance operations, debt service obligations, and capital expenditures for the foreseeable future[203]. - Working capital changes contributed to operating cash flows, driven by a decrease in inventory levels of $95.4 million[199]. - The company's balance sheet includes approximately 35% goodwill and 18% indefinite life intangible assets as of December 28, 2024[93]. Impairment and Taxation - The company recognized non-cash impairment of $33.4 million in fiscal 2024, primarily related to trademarks[180]. - The effective tax rate in fiscal 2024 was 25.8%, compared to 22.8% in fiscal 2023, reflecting state taxes and foreign tax rate differentials[185]. - The tax provision for fiscal 2023 was $118.5 million at an effective rate of 22.8%, compared to $127.8 million at 22.7% in fiscal 2022[197]. - The company recognized $33.4 million in impairment charges related to trademarks, primarily within the Residential Kitchen Equipment Group[222]. - The fair value of the Residential Kitchen reporting unit exceeded its carrying value by more than 8%, indicating no impairment of goodwill was recognized[217]. Strategic Initiatives and Risks - The company is targeting completion of the spin-off of its Food Processing business by early 2026, subject to customary conditions[166]. - The company is pursuing a spin-off of its Food Processing business, expected to be completed by early 2026, but there are risks of delays and unanticipated costs[116]. - The company invests substantial amounts in research and development to enhance existing products and develop new technologies[97]. - The company pursues strategic acquisitions and investments, which entail risks related to integration and management[108]. - The company plans to continue its growth strategy by pursuing acquisitions that provide opportunities for profitable growth, but may face challenges in identifying and completing suitable acquisitions[111]. - The company is expanding its international operations, which involves risks such as compliance with foreign laws and regulations, competitive conditions, and geopolitical threats[113][114]. - The company faces intense competition in its industries, with numerous competitors that may have greater financial and technological resources[95]. - Changes in purchasing patterns or loss of key customers could adversely impact the company's operating results[100]. - A significant increase in commodity prices, such as steel, could create upward pressure on operating results[101]. - The company is subject to risks associated with product liability claims, which could adversely affect its financial condition[103]. - The company's financial performance is subject to significant fluctuations due to various factors, including economic conditions and customer demand[106]. - The company may experience rapid growth, which could strain its management and operational resources[107]. - Approximately 5% of the company's workforce is unionized, and any work stoppages could materially affect operations[117]. - The company relies heavily on key personnel, and the inability to retain them could adversely impact business operations[118]. - The company faces risks related to cybersecurity, including potential data breaches that could disrupt operations and lead to financial losses[121][122]. - The company is subject to various legal and regulatory risks, including potential liabilities under environmental laws and compliance with tax regulations[123][125][128]. - The company is committed to reducing its environmental impact and has set targets for greenhouse gas emissions, but there is no assurance these goals will be met[127]. - The company may face unfavorable tax adjustments due to ongoing audits by tax authorities, which could adversely affect financial results[128][129]. Stock Performance - The impact of future transactions on the company's stock price is uncertain, and any announcements could lead to substantial fluctuations[115]. - The trading price of the company's common stock has been volatile, which may lead to substantial losses for investors[131]. - The company is preparing for the implementation of Pillar II effective January 1, 2024, and the remaining global minimum tax rules by January 1, 2025[130].