Financial Data and Key Metrics Changes - The company reported a modest revenue decline in 2024 to approximately $3.9 billion, with adjusted EBITDA of $866 million at a margin of 22.4%, slightly ahead of the previous year [19][20] - Free cash flow reached a record $229 million in Q4, contributing to a total of over $640 million for the year [18][23] - Q4 revenues surpassed $1 billion, with adjusted EBITDA of over $251 million at a margin of 24.8% [20][22] Business Line Data and Key Metrics Changes - Food Processing segment achieved 4.7% organic revenue growth in Q4, resulting in revenues exceeding $219 million and an adjusted EBITDA margin of 29.6%, up 200 basis points year-over-year [20][21] - Residential segment reported Q4 revenues of $185 million, a sequential increase from Q3, but down 2.4% year-over-year, with an adjusted EBITDA margin of 13% [21][22] - Commercial segment's Q4 revenues were over $609 million, with organic revenues down 2.8% year-over-year, maintaining healthy margins over 28% [22] Market Data and Key Metrics Changes - The company noted gradual improvement in macro conditions for both commercial and residential businesses, despite challenges persisting [14][15] - The Food Processing business finished the year strongly, with expectations for continued growth driven by favorable long-term market drivers [15][19] Company Strategy and Development Direction - The company announced plans to separate its Food Processing business into a stand-alone public company, aiming to enhance strategic and operational focus for both entities [5][6] - The remaining Middleby Corporation will focus on commercial and residential kitchen equipment, with an emphasis on innovation and automation [9][10] - The company is positioned to capture market opportunities through strategic acquisitions and investments in new product categories [10][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the residential business, anticipating gradual improvement in 2025 [50][110] - The company expects low single-digit organic revenue growth across segments in 2025, with profitability growth rates exceeding organic revenue growth [30][31] - Management highlighted the importance of M&A activities and strategic investments to drive future growth [62][66] Other Important Information - The company added two new Board members, enhancing its governance and strategic direction [11][12] - The separation of the Food Processing business is expected to be executed through a tax-free spinoff by early 2026 [10] Q&A Session Summary Question: Can you walk us through the decision to separate Food Processing? - Management indicated that the decision was based on a long-term strategic review, believing that separation will accelerate growth for both entities [41][44] Question: What are the expected free cash flow conversions for the separate businesses? - Management suggested that both businesses could achieve 100% or greater free cash flow conversion, although specific long-range guidance for Food Processing is still being developed [46][47] Question: How do you view the recovery in the residential business? - Management noted that the residential business is at a cyclical trough but has significant growth potential, with expectations for gradual recovery in 2025 [49][50] Question: What is the leverage profile expected post-spin? - Management anticipates less leverage on the Food Processing business, allowing for more focus on M&A opportunities [95] Question: Are there any strategic alternatives being considered for the residential business? - Management confirmed that the residential business is continuously reviewed, but currently, it is seen as a strong platform with potential for margin expansion [72][110]

Financial Data and Key Metrics Changes - The company reported revenues for 2024 at approximately $3.9 billion, a modest decline compared to the previous year. Adjusted EBITDA was $866 million with a margin of 22.4%, slightly ahead of last year [19] - In Q4, revenues exceeded $1 billion, with adjusted EBITDA of over $251 million, marking a record margin of 24.8%. GAAP earnings per share were $2.07, while adjusted EPS was $2.88 [20] - Free cash flow reached $229 million in Q4, contributing to a total of over $640 million for the year, with a free cash flow conversion rate of 140% [18][23] Business Line Data and Key Metrics Changes - The Food Processing segment achieved 4.7% organic revenue growth in Q4, resulting in revenues of over $219 million and an adjusted EBITDA margin of 29.6%, up 200 basis points year-over-year [20] - Residential revenues in Q4 were $185 million, down 2.4% year-over-year, but marked the slowest decline of the year. The adjusted EBITDA margin was 13%, the highest in 1.5 years [21] - Commercial revenues in Q4 were over $609 million, with organic revenues down 2.8% year-over-year, maintaining healthy margins over 28% [22] Market Data and Key Metrics Changes - The company noted that macro conditions remained challenging for both commercial and residential businesses but showed signs of gradual improvement moving forward [14] - The Food Processing business finished the year exceptionally strong, with expectations for continued growth into 2025 driven by favorable long-term market drivers [15] Company Strategy and Development Direction - The company announced plans to separate its Food Processing business into a stand-alone public company, aiming to create two independent industry leaders and enhance strategic focus [5][6] - The remaining Middleby Corporation will focus on commercial and residential kitchen equipment, with an emphasis on innovation and capturing market opportunities in automation and digital technologies [9][10] - The company plans to execute the separation through a tax-free spinoff expected to be completed by early 2026 [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the residential business, anticipating gradual improvement in the coming years due to strategic investments made during the downturn [49][50] - The company expects organic revenue growth in the low single digits for 2025, with profitability growth rates exceeding organic revenue growth [30] - Management highlighted the importance of M&A opportunities for both the Food Processing and remaining businesses, with a balanced approach to capital allocation [63] Other Important Information - The company added two new Board members, enhancing the Board's capabilities and perspectives as part of a refreshment process [11][12] - The company is focused on increasing the mix of parts and services across its business segments, leveraging IoT and data to enhance customer experience [124] Q&A Session Summary Question: Can you walk us through the decision to separate Food Processing? - Management indicated that the decision was based on a long-term strategic review, believing that separation will accelerate growth for both entities [42][44] Question: What are the expected free cash flow conversions for the separate businesses? - Management suggested that both businesses could achieve 100% or greater free cash flow conversion, given their similar cash flow characteristics [46] Question: How does the company view the recovery in the residential business? - Management noted that the residential business is at a cyclical trough but sees significant opportunities for growth and margin expansion in the coming years [50][72] Question: What is the outlook for organic growth in Commercial Foodservice? - Management expects a slow start to the year but anticipates improving conditions throughout 2025, with new store openings and increased consultant activity driving growth [80][86] Question: What is the leverage profile expected post-spin? - Management indicated that the Food Processing business would likely have less leverage, allowing for more focus on M&A opportunities [95]

Core Insights - Middleby (MIDD) reported revenue of $1.01 billion for the quarter ended December 2024, reflecting a 0.5% increase year-over-year and exceeding the Zacks Consensus Estimate of $995.24 million by 1.87% [1] - Earnings per share (EPS) for the quarter was $2.88, up from $2.65 in the same quarter last year, representing a surprise of 15.20% against the consensus estimate of $2.50 [1] Revenue Breakdown - Commercial Foodservice revenue was $609.45 million, surpassing the four-analyst average estimate of $599.71 million, but showing a year-over-year decline of 2.9% [4] - Residential Kitchen revenue reached $185.04 million, slightly below the four-analyst average estimate of $186.56 million, with a year-over-year decrease of 2.1% [4] - Food Processing revenue was $219.39 million, exceeding the average estimate of $208.71 million, and showing a significant year-over-year increase of 14.5% [4] Operational Performance - Income from operations in the Commercial Foodservice segment was $145.31 million, lower than the average estimate of $155.48 million [4] - The Residential Kitchen segment reported an operating loss of $12.65 million, contrasting with the average estimate of a $7.11 million profit [4] - Food Processing segment income was $58.07 million, outperforming the average estimate of $50.56 million [4] Stock Performance - Over the past month, Middleby shares have returned -2.1%, compared to a -1.8% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - Middleby exceeded expectations for Q4 2024 with strong earnings and strategic growth initiatives despite challenges in specific segments [1][2] Financial Performance - Adjusted EPS for Q4 2024 was $2.88, surpassing the analyst estimate of $2.52 by $0.36, reflecting a 14.3% increase [2][3] - Revenue reached $1.014 billion, exceeding forecasts by $18 million, with a year-over-year change of 0.5% [2][3] - Adjusted EBITDA was $251.2 million, marking a 6.8% increase from Q4 2023 [3] - Free cash flow was $229.1 million, down 4.6% from the previous year [3] Business Segments Overview - Middleby operates through three main segments: Commercial Foodservice, Food Processing, and Residential Kitchen, which cater to diverse market demands [4] - The Food Processing segment saw a 14.4% sales increase, with recent acquisitions contributing 10.2% to this growth [6] - Commercial Foodservice and Residential Kitchen segments experienced sales declines of 2.9% and 2.1%, respectively, due to decreased restaurant traffic and a slowdown in home sales [6] Strategic Initiatives - The company has focused on strategic acquisitions and innovation, with recent acquisitions aimed at strengthening its niche market presence [5] - Continuous investment in R&D is crucial, emphasizing automation and IoT solutions to enhance efficiency and reduce costs [5][12] Financial Health - Middleby achieved a record operating cash flow of $687 million for the year and reduced net leverage to 2.0 times, indicating improved financial flexibility [8] - The company repurchased $16.4 million in shares, reflecting confidence in its long-term prospects [8] Macroeconomic Context - Macroeconomic challenges, such as reduced restaurant traffic and housing market slowdowns, have impacted certain business segments [9] - The company is taking proactive measures, including focusing on innovation and strategic acquisitions, to counterbalance these external pressures [9] Future Outlook - Management anticipates a positive recovery trajectory, supported by expectations of improved market conditions and sustained demand for innovative products [11] - Continued emphasis on automation and IoT advancements is expected to drive future product development [12]

Core Insights - Middleby (MIDD) reported quarterly earnings of $2.88 per share, exceeding the Zacks Consensus Estimate of $2.50 per share, and showing an increase from $2.65 per share a year ago, resulting in an earnings surprise of 15.20% [1] - The company achieved revenues of $1.01 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.87%, with revenues remaining unchanged compared to the previous year [2] - Middleby shares have increased approximately 24.1% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.7% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.90 on revenues of $933.9 million, while for the current fiscal year, the estimate is $9.61 on revenues of $3.98 billion [7] - The estimate revisions trend for Middleby is mixed, leading to a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Industry Context - The Manufacturing - General Industrial industry, to which Middleby belongs, is currently ranked in the bottom 45% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another company in the same industry, Chart Industries (GTLS), is expected to report quarterly earnings of $3.19 per share, reflecting a year-over-year increase of 41.8%, with revenues projected at $1.17 billion, up 15.5% from the previous year [9][10]

1400 Toastmaster Drive, Elgin, Illinois 60120 (847) 741-3300 www.middleby.com "We closed 2024 by delivering our strongest margins of the year. Exceptional profitability achievements by our Food Processing and Commercial Foodservice platforms, and a strong result in the residential segment given the depressed market conditions, led us to record cash flow for the year. These results are being delivered while also making critical investments across all our businesses that are uniquely positioning us for the fu ...

The Middleby Corporation (MIDD) has been benefiting from a robust product portfolio and accretive acquisitions. MIDD’s efforts to reward its shareholders add to its appeal.Elgin, IL-based Middleby provides cooking, warming, food preparation and packaging equipment to the commercial, industrial processing and residential markets. Formerly known as Oven Company, it was acquired by TMC Industries Ltd. in 1983.In the year-to-date period, this Zacks Rank #3 (Hold) company’s shares have gained 25.4% compared with ...

Middleby (MIDD) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report. On the other hand, if they miss, the stock may mo ...

The Middleby Corporation (MIDD) has failed to impress investors with its recent operational performance due to weakness across its businesses and high debt levels.Based in Elgin, IL, the company provides cooking, warming, food preparation and packaging equipment to commercial, industrial processing and residential markets.Let us discuss the factors that continue to take a toll on the firm.Factors Affecting MiddlebyBusiness Weakness: Lower demand for residential kitchen products due to weakness in the housin ...

Group 1: Acquisition Details - The Middleby Corporation has completed the acquisition of Gorreri Food Processing Technology, with financial terms undisclosed [1] - Gorreri, based in Italy, specializes in equipment for the baked goods industry and generates approximately $20 million in annual revenue [2] - The acquisition is expected to enhance Middleby's position in the food processing market by adding advanced baked goods solutions and innovative manufacturing processes [3] Group 2: Strategic Alignment - This acquisition aligns with Middleby's strategy of expanding market share, product offerings, and customer base through acquisitions [4] - Previous acquisitions include Emery Thompson in September 2024, which enhanced frozen dessert offerings, and GBT GmbH Bakery Technology in February 2024, strengthening its European presence in large-scale baking [4] Group 3: Market Performance and Challenges - Middleby's shares fell by 3.3% to close at $142.18, with a market capitalization of $7.6 billion [2][5] - The company faces challenges in the Residential Kitchen Equipment Group due to lower demand linked to a weak housing market and in the Commercial Foodservice Equipment Group due to declining restaurant traffic and rising costs [6] - Over the past three months, Middleby's shares have increased by 2.1%, compared to the industry's growth of 13.4% [7]