Financial Performance - Q2 2025 - Net sales decreased by 1.4% to $977.9 million compared to $991.6 million in Q2 2024[4] - Gross profit decreased by 2.2% to $371.3 million, with a gross profit margin of 38.0%[4] - Operating income decreased by 11.6% to $155.4 million[4] - Net earnings decreased by 8.1% to $106.0 million[4] - Adjusted EBITDA decreased by 7.5% to $200.2 million, representing 20.5% of net sales[4] - Operating cash flow decreased by 18.4% to $122.0 million[4] Segment Performance - Q2 2025 - Commercial Foodservice net sales decreased by 4.8% to $580.6 million, with organic net sales declining by 5.5%[8] - Residential Kitchen net sales decreased by 6.1% to $181.1 million, with organic net sales declining by 7.8%[10] - Food Processing net sales increased by 14.4% to $216.2 million, but organic net sales decreased by 2.9%[13] Revenue Breakdown - YTD 2025 - Commercial Foodservice accounted for 61% of total revenue, Food Processing 20%, and Residential Kitchen 19%[6] - The United States and Canada accounted for 67% of total revenue, Europe and the Middle East 23%, Asia 6%, and Latin America 4%[7] Financial Outlook - The company projects total revenue of $950-975 million for Q3 2025 and $3.81-3.87 billion for the full year 2025[16] - Adjusted EBITDA is projected to be $185-195 million for Q3 2025 and $770-800 million for the full year 2025[16] Capital Allocation - The company repurchased 3.1 million shares, representing 5.7% of equity, for $449 million YTD 2025[18, 20]

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]