Middleby(US:MIDD)2024-10-31 11:02Financial Performance - Net sales for the third quarter were $943 million, a decrease of 3.9% compared to the prior year period[4] - Diluted earnings per share were $2.11, with adjusted net earnings per share at $2.33[1] - Operating income was $173 million, representing 18.4% of net sales[1] - Adjusted EBITDA was $213 million, with an organic adjusted EBITDA margin of 22.6%[5] - For the three months ended September 28, 2024, net sales totaled $942.8 million, a decrease from $980.7 million in the same period of 2023, representing a decline of 3.9%[13] - For the nine months ended September 28, 2024, net sales reached $2.86 billion, a decrease of 5.5% from $3.03 billion in the same period of 2023[15] - The company reported net earnings of $114.2 million for Q3 2024, with diluted earnings per share of $2.11, compared to $108.7 million and $2.01 in Q3 2023[17] Cash Flow and Debt - Operating cash flows amounted to $157 million, down from $219 million in the prior year[5] - Operating cash flow for Q3 2024 was $156,665, a decrease of 28.5% compared to $219,153 in Q3 2023[19] - Free cash flow for Q3 2024 was $145,176, down from $197,823 in Q3 2023, representing a decline of 26.5%[19] - The company reported net cash flows from operating activities of $447,082 for the nine months ended Q3 2024, an increase of 19.9% from $373,103 in the same period of 2023[19] - Net debt at the end of the third quarter was $1.8 billion, reduced from $2.2 billion at the end of fiscal 2023[6] - Financing activities resulted in cash outflows of $(3,114) in Q3 2024, compared to $(150,533) in Q3 2023, showing a significant reduction in financing needs[19] Segment Performance - The commercial foodservice segment reported a net sales decline of 5.3%[4] - Segment operating income for the Commercial Foodservice segment was $146.1 million, with an operating income margin of 24.3%, compared to $158.6 million and 25.0% in the prior year[13] - Segment adjusted EBITDA for the Commercial Foodservice segment was $492.9 million, representing 27.2% of net sales, compared to 27.5% in the prior year[15] - Adjusted EBITDA for the total company was $213.0 million, or 22.6% of net sales, down from $225.1 million and 23.0% in the same quarter of 2023[13] Expenses and Restructuring - The company incurred restructuring expenses of $2.5 million in Q3 2024, down from $4.4 million in Q3 2023[17] - Stock compensation expenses for the three months ended September 28, 2024, were $8.7 million, compared to $13.2 million in the same period of 2023[17] - Capital expenditures in Q3 2024 were $11,489, compared to $21,330 in Q3 2023, indicating a reduction of 46.1%[19] Future Outlook - The company anticipates improvement in industry macro-conditions in 2025, supporting growth across all foodservice segments[3] Charitable Contributions - Charitable support to Ukraine amounted to $286,000 in Q3 2024, up from $118,000 in the same quarter of 2023[17] Non-GAAP Measures - Non-GAAP financial measures are used by the company to provide greater insight into its financial performance, focusing on organic net sales growth and adjusted EBITDA[21] - Free cash flow is emphasized as a key measure of operating performance, available for investments and debt repayment[22] - The company believes that its non-GAAP measures assist in comparing performance across reporting periods by excluding non-core operating impacts[21] - The company aims to enhance transparency and understanding of its financial results through the use of non-GAAP measures[20] - Adjusted net earnings and diluted per share measures are considered useful for evaluating operational performance and business planning[21]