Middleby(MIDD) - 2025 Q2 - Quarterly Results

Press Release Overview This section provides an overview of Middleby Corporation's Q2 2025 net earnings report, including company information and CEO commentary Company Information Middleby Corporation (NASDAQ: MIDD), a global leader in commercial foodservice, food processing, and residential kitchen equipment, released its second-quarter 2025 net earnings report - Middleby Corporation (NASDAQ: MIDD) is a global leader in commercial foodservice, food processing, and residential kitchen equipment[2] CEO Commentary CEO Tim FitzGerald highlighted strong operational performance, new product launches, and customer collaboration despite economic uncertainties, emphasizing the company's fundamental transformation for long-term growth and significant share repurchases due to undervalued market perception - The CEO noted strong operational performance, new product launches, and customer collaboration despite economic uncertainties[3] - The company has undergone a fundamental business transformation to drive long-term growth, particularly in innovation and market expansion capabilities, positioning it for outsized growth post-market rebound[3] - The company repurchased $323 million in stock this quarter and expects to continue opportunistically deploying capital to enhance EPS, believing current market valuation does not reflect its significant growth opportunities[3] Second Quarter 2025 Financial Highlights This section summarizes Middleby's overall financial performance, segment-specific organic sales and adjusted EBITDA, and cash flow with capital allocation for Q2 2025 Overall Performance Summary Middleby's Q2 2025 net sales decreased by 1.4% year-over-year, with organic net sales down 5.4%, while adjusted EBITDA fell to $200.2 million, including a $10 million tariff headwind, and operating income also declined Overall Performance Summary (in millions USD) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :----------- | | Net Sales | $977.86 | $991.55 | (1.4%) | | Operating Income | $155.39 | $175.71 | (11.6%) | | Adjusted EBITDA | $200.2 | $216.4 | (7.5%) | - Adjusted EBITDA for Q2 2025 includes a $10 million tariff headwind[4] Segment Organic Sales and Adjusted EBITDA In Q2 2025, all segments experienced a decline in organic net sales, with Residential Kitchen showing the largest decrease at 7.8%, while Food Processing reported a 14.4% net sales increase driven by acquisitions, though its organic sales also declined, and all segments saw a year-over-year decrease in adjusted EBITDA as a percentage of net sales Segment Performance (Q2 2025) | Segment | Reported Net Sales Growth (Q2 2025) | Organic Net Sales Growth (Q2 2025) | Adjusted EBITDA as % of Net Sales (Q2 2025) | Adjusted EBITDA as % of Net Sales (Q2 2024) | | :---------------- | :--------------------------------- | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | | Commercial Foodservice | (4.8)% | (5.5)% | 27.0% | 28.1% | | Residential Kitchen | (6.1)% | (7.8)% | 10.3% | 9.1% | | Food Processing | 14.4% | (2.9)% | 21.2% | 24.2% | | Total Company | (1.4)% | (5.4)% | 20.5% | 21.8% | - Food Processing segment's reported net sales growth of 14.4% was primarily driven by acquisitions (15.4%), while its organic net sales decreased by 2.9%[4] Cash Flow and Capital Allocation Operating cash flow in Q2 2025 decreased to $122 million from $149.5 million in the prior year, with the company repurchasing $322.7 million in stock, resulting in a net leverage ratio of 2.3x, and net debt increasing to $1.9 billion by quarter-end from $1.7 billion at FY2024 end Cash Flow and Capital Allocation (in millions USD) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :----------- | | Operating Cash Flow | $122.0 | $149.5 | (18.4%) | | Stock Repurchases (Q2) | $322.7 | N/A | N/A | - Net leverage ratio was 2.3x as of the end of Q2 2025[5][11] - Net debt increased to $1.9 billion as of the end of Q2 2025, up from $1.7 billion at the end of fiscal year 2024[11] 2025 Outlook This section provides Middleby's financial guidance for the third quarter and full year of 2025 Third Quarter 2025 Guidance Middleby projects Q3 2025 total revenue between $950 million and $975 million, adjusted EBITDA between $185 million and $195 million, and adjusted EPS between $2.04 and $2.19 Q3 2025 Guidance (in millions USD, except EPS) | Metric | Q3 2025 Guidance | | :----- | :--------------- | | Total Revenue | $950-975 million | | Commercial Foodservice Revenue | $580-590 million | | Residential Kitchen Revenue | $170-180 million | | Food Processing Revenue | $195-205 million | | Adjusted EBITDA | $185-195 million | | Adjusted EPS | $2.04-2.19 | Full Year 2025 Guidance The company forecasts full-year 2025 total revenue between $3.81 billion and $3.87 billion, adjusted EBITDA between $770 million and $800 million, and adjusted EPS between $8.65 and $9.05 Full Year 2025 Guidance (in billions/millions USD, except EPS) | Metric | Full Year 2025 Guidance | | :----- | :--------------- | | Total Revenue | $3.81-3.87 billion | | Adjusted EBITDA | $770-800 million | | Adjusted EPS | $8.65-9.05 | Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated statements of earnings, balance sheets, and cash flows for Middleby Corporation Statements of Earnings Net sales for Q2 2025 were $977.86 million, down from $991.55 million in Q2 2024, with net earnings decreasing to $105.96 million ($1.99 diluted EPS) from $115.40 million ($2.13 diluted EPS) in the prior year Statements of Earnings (in thousands USD, except EPS) | Metric | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | Six Months Ended June 28, 2025 | Six Months Ended June 29, 2024 | | :----- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net Sales | $977,859 | $991,546 | $1,884,486 | $1,918,472 | | Gross Profit | $371,291 | $379,642 | $717,224 | $726,000 | | Operating Income | $155,392 | $175,708 | $295,990 | $312,841 | | Net Earnings | $105,956 | $115,395 | $198,308 | $201,963 | | Diluted EPS | $1.99 | $2.13 | $3.68 | $3.72 | Balance Sheets Total assets as of June 28, 2025, were $7.34 billion, a slight increase from $7.28 billion at December 28, 2024, with cash and cash equivalents decreasing while receivables and inventory rose, and total liabilities also increased, though long-term debt remained relatively stable Balance Sheets (in thousands USD) | Metric | June 28, 2025 | December 28, 2024 | | :----- | :----------- | :----------- | | Total Assets | $7,335,883 | $7,283,151 | | Cash and Cash Equivalents | $511,499 | $689,533 | | Accounts Receivable, Net | $665,833 | $643,355 | | Inventories, Net | $888,670 | $841,567 | | Total Current Assets | $2,259,590 | $2,330,043 | | Total Current Liabilities | $880,782 | $829,322 | | Long-Term Debt | $2,331,772 | $2,351,118 | | Total Stockholders' Equity | $3,622,555 | $3,638,431 | Statements of Cash Flows Net cash provided by operating activities in Q2 2025 was $122 million, down from $149.5 million in Q2 2024, with $24.4 million used in investing activities and $346.4 million in financing activities, primarily for stock repurchases, resulting in $101.1 million in free cash flow for the quarter Statements of Cash Flows (in thousands USD) | Metric | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | Six Months Ended June 28, 2025 | Six Months Ended June 29, 2024 | | :----- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Operating Activities | $122,003 | $149,516 | $263,137 | $290,417 | | Investing Activities | $(24,419) | $(14,228) | $(59,256) | $(30,317) | | Financing Activities | $(346,368) | $(14,117) | $(403,459) | $(42,675) | | Free Cash Flow | $101,084 | $138,579 | $208,486 | $265,737 | Non-GAAP Financial Measures and Reconciliations This section details Middleby's non-GAAP financial metrics, including segment information and reconciliations to GAAP measures, along with an explanation of their use Non-GAAP Segment Information This section presents non-GAAP financial data by segment, including net sales, operating income, and adjusted EBITDA for the three and six months ended June 28, 2025, compared to prior periods, also noting the reclassification of the Food Processing segment - To align with current year presentation, certain prior year amounts have been reclassified, including the performance of a segment previously reported within Commercial Foodservice now being reported within Food Processing[19][21] Three Months Ended June 28, 2025 In Q2 2025, the Commercial Foodservice segment had the highest net sales and adjusted EBITDA, though its adjusted EBITDA as a percentage of net sales slightly decreased year-over-year, while Residential Kitchen saw an increase in this percentage despite lower net sales, and Food Processing experienced a decline Segment Performance (Q2 2025, in thousands USD) | Segment | Net Sales (Q2 2025) | Segment Operating Income (Q2 2025) | Adjusted EBITDA (Q2 2025) | Adjusted EBITDA as % of Net Sales (Q2 2025) | | :---------------- | :------------------ | :------------------------------- | :------------------------ | :--------------------------------------- | | Commercial Foodservice | $580,605 | $137,902 | $156,548 | 27.0% | | Residential Kitchen | $181,059 | $9,327 | $18,603 | 10.3% | | Food Processing | $216,195 | $42,677 | $45,846 | 21.2% | | Total Company | $977,859 | $155,392 | $200,193 | 20.5% | Six Months Ended June 28, 2025 For the first six months of 2025, Commercial Foodservice remained the largest segment in terms of net sales and adjusted EBITDA, with all segments experiencing a slight year-over-year decrease in adjusted EBITDA as a percentage of net sales Segment Performance (H1 2025, in thousands USD) | Segment | Net Sales (H1 2025) | Segment Operating Income (H1 2025) | Adjusted EBITDA (H1 2025) | Adjusted EBITDA as % of Net Sales (H1 2025) | | :---------------- | :------------------- | :-------------------------------- | :------------------------- | :--------------------------------------- | | Commercial Foodservice | $1,143,322 | $269,976 | $307,955 | 26.9% | | Residential Kitchen | $357,063 | $21,134 | $39,219 | 11.0% | | Food Processing | $384,101 | $66,189 | $75,912 | 19.8% | | Total Company | $1,884,486 | $295,990 | $382,273 | 20.3% | Reconciliation of Net Earnings to Adjusted Net Earnings This section reconciles GAAP net earnings and diluted EPS to adjusted net earnings and adjusted diluted EPS by excluding non-recurring or non-core items such as amortization, restructuring charges, acquisition-related adjustments, and strategic transaction costs Three Months Ended June 28, 2025 In Q2 2025, adjusted net earnings were $123.91 million and adjusted diluted EPS was $2.35, compared to GAAP net earnings of $105.96 million and diluted EPS of $1.99, with key adjustments including amortization, restructuring charges, and strategic transaction costs Net Earnings Reconciliation (Q2, in thousands USD, except EPS) | Metric | Q2 2025 (GAAP) | Q2 2025 (Adjusted) | Q2 2024 (GAAP) | Q2 2024 (Adjusted) | | :----- | :------------- | :----------------- | :------------- | :----------------- | | Net Earnings | $105,956 | $123,906 | $115,395 | $128,479 | | Diluted EPS | $1.99 | $2.35 | $2.13 | $2.39 | | Amortization Adjustment | $17,192 | | $18,066 | | | Restructuring Charges Adjustment | $2,288 | | $5,350 | | | Strategic Transaction Costs Adjustment | $6,788 | | — | | Six Months Ended June 28, 2025 For the first six months of 2025, adjusted net earnings were $235.09 million and adjusted diluted EPS was $4.43, compared to GAAP net earnings of $198.31 million and diluted EPS of $3.68 Net Earnings Reconciliation (H1, in thousands USD, except EPS) | Metric | H1 2025 (GAAP) | H1 2025 (Adjusted) | H1 2024 (GAAP) | H1 2024 (Adjusted) | | :----- | :-------------- | :------------------ | :-------------- | :------------------ | | Net Earnings | $198,308 | $235,086 | $201,963 | $229,829 | | Diluted EPS | $3.68 | $4.43 | $3.72 | $4.28 | | Amortization Adjustment | $34,981 | | $37,202 | | | Restructuring Charges Adjustment | $5,017 | | $8,527 | | | Strategic Transaction Costs Adjustment | $10,261 | | — | | Use of Non-GAAP Financial Measures Explanation The company utilizes non-GAAP financial measures such as organic net sales growth, adjusted EBITDA, net debt, adjusted net earnings, and free cash flow to provide deeper insights, enhance transparency, and aid management decision-making, as these metrics help assess core operating performance and facilitate period-over-period comparisons by excluding items not reflective of core operations - Non-GAAP measures (organic net sales growth, adjusted EBITDA, net debt, adjusted net earnings, and adjusted diluted EPS) are intended to provide deeper insights, enhance transparency, and assist management in financial and operational decision-making[25][26][28] - Free cash flow is considered an important measure of operating performance as it provides cash generated from operating activities available for mandatory payment obligations and investment opportunities, such as funding acquisitions, repaying debt, and repurchasing common stock[27] Additional Information This section provides details on Middleby's upcoming conference call, forward-looking statements, and company profile with contact information Conference Call Middleby has scheduled a conference call for August 6 at 11 AM ET/10 AM CT to discuss Q2 results, accessible via the company's investor relations website or by phone - The company has scheduled a conference call for August 6 at 11 AM ET/10 AM CT to discuss Q2 results, accessible via www.middleby.com or by calling (844) 676-5090[9] Forward-Looking Statements The press release contains forward-looking statements subject to various risks and uncertainties, including financing costs, operating performance fluctuations, reliance on key customers, international risks, market conditions, and raw material costs, with no obligation to update these statements unless legally required - Statements in the press release that are not historical facts are forward-looking statements, subject to various significant factors including financing costs, quarterly fluctuations in operating results, reliance on key customers, international risks, foreign exchange and political risks, changes in market conditions, competitive product and pricing impacts, timely product development and market acceptance, and raw material availability and costs[10] - The company undertakes no obligation to publicly update or revise any forward-looking statements unless required by law[10] Company Profile and Contact Middleby Corporation is a global leader in the foodservice industry, providing solutions for commercial foodservice, food processing, and residential kitchens, known for innovation and philanthropic partnerships, with investor relations contact information provided - Middleby Corporation is a global leader in the foodservice industry, developing and manufacturing a wide range of solutions for commercial foodservice, food processing, and residential kitchens, and prides itself on its state-of-the-art innovation and philanthropic partnerships[12] - Contact information for John Joyner, Vice President of Investor Relations, is jjoyner@middleby.com[13]