MIDDLEBY Corp

Previous wording

The company has been negatively impacted by inflation in wages, logistics, energy, raw materials and component costs. Price increases and pricing strategies have been implemented to mitigate the impact of cost inflation on margins and the company continues to actively monitor costs. High inflation and uncertainty surrounding the Federal Reserve's interest rate policy decisions led to increased interest rates in 2023 and into the first quarter of 2024, which combined with global macroeconomic uncertainty, has and may continue to impact customer demand. Most notably in our residential segment, we have faced recent demand headwinds due to macroeconomic conditions. Even in light of such headwinds, we remain focused on delivering strong financial results and executing on our long-term strategy and profitability objectives.

Current wording

decisions led to increased interest rates in 2023 and into the first quarter of 2024, which combined with global macroeconomic uncertainty, has and may continue to impact customer demand. The Federal Reserve cut interest rates in the third quarter of 2024, the first in a string of cuts expected into 2025. Interest rates and global macroeconomic uncertainty has and may continue to impact customer demand across our businesses. Even in light of such headwinds, we remain focused on delivering strong financial results and executing on our long-term strategy and profitability objectives.

Previous wording

NET SALES. Net sales for the three months period ended June 29, 2024 decreased by $48.4 million or 4.7% to $991.6 million as compared to $1,040.0 million in the three months period ended July 1, 2023. Net sales increased by $3.3 million, or 0.3%, from the fiscal 2023 acquisitions of Filtration Automation, Terry, and Trade-Wind and the fiscal 2024 acquisitions of GBT GmbH Bakery and MaxMac. Excluding acquisitions, net sales decreased $51.7 million, or 5.0%, from the prior year period. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars for the three months period ended June 29, 2024 decreased net sales by approximately $2.0 million or 0.2%. Excluding the impact of foreign exchange and acquisitions, sales decreased 4.8% for the three months period ended June 29, 2024 as compared to the prior year period, including a net sales decrease of 3.9% at the Commercial Foodservice Equipment Group, a net sales decrease of 5.7% at the Food Processing Equipment Group and a net sales decrease of 6.7% at the Residential Kitchen Equipment Group.

Current wording

NET SALES. Net sales for the three months period ended September 28, 2024 decreased by $37.9 million or 3.9% to $942.8 million as compared to $980.7 million in the three months period ended September 30, 2023. Net sales increased by $1.6 million, or 0.2%, from the fiscal 2023 acquisition of Trade-Wind and the fiscal 2024 acquisitions of GBT GmbH Bakery and MaxMac. Excluding acquisitions, net sales decreased $39.5 million, or 4.0%, from the prior year period. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars for the three months period ended September 28, 2024 increased net sales by approximately $1.0 million or 0.1%. Excluding the impact of foreign exchange and acquisitions, sales decreased 4.1% for the three months period ended September 28, 2024 as compared to the prior year period, including a net sales decrease of 5.3% at the Commercial Foodservice Equipment Group, a net sales increase of 0.7% at the Food Processing Equipment Group and a net sales decrease of 4.5% at the Residential Kitchen Equipment Group.

Previous wording

•Net sales of the Commercial Foodservice Equipment Group decreased by $26.3 million, or 4.1%, to $619.4 million in the three months period ended June 29, 2024, as compared to $645.7 million in the prior year period. Excluding the impact of the acquisition of Terry, acquired July 5, 2023, net sales of the Commercial Foodservice Equipment Group decreased $26.7 million, or 4.1%, as compared to the prior year period. Excluding the impact of foreign exchange and the acquisition, net sales decreased $25.2 million, or 3.9%, at the Commercial Foodservice Equipment Group. Domestically, the company realized a sales decrease of $32.4 million, or 6.8%, to $442.4 million, as compared to $474.8 million in the prior year period. Excluding the acquisition, the net decrease in domestic sales was $32.8 million, or 6.9%. The decrease in domestic sales is related to slow market conditions. International sales increased $6.1 million, or 3.6%, to $177.0 million, as compared to $170.9 million in the prior year period. Excluding the impact of foreign exchange and the acquisition, the net sales increase in international sales was $7.6 million, or 4.4%. The increase in international sales is related to improvements in market conditions, primarily in the European and Latin American markets.

Current wording

•Net sales of the Commercial Foodservice Equipment Group decreased by $33.9 million, or 5.3%, to $600.1 million in the three months period ended September 28, 2024, as compared to $634.0 million in the prior year period. Excluding the impact of foreign exchange, net sales decreased $33.5 million, or 5.3%, at the Commercial Foodservice Equipment Group. Domestically, the company realized a sales decrease of $39.0 million, or 8.5%, to $419.5 million, as compared to $458.5 million in the prior year period. The decrease in domestic sales is related to slow market conditions. International sales increased $5.1 million, or 2.9%, to $180.6 million, as compared to $175.5 million in the prior year period. Excluding the impact of foreign exchange, net sales increase in international sales was $5.5 million, or 3.1%. The increase in international sales is related to improvements in market conditions, primarily in the European and Latin American markets.

Previous wording

•Net sales of the Residential Kitchen Equipment Group decreased by $12.8 million, or 6.2%, to $192.8 million in the three months period ended June 29, 2024, as compared to $205.6 million in the prior year period. Excluding the impact of foreign exchange and the acquisition of Trade-Wind, acquired August 1, 2023, net sales decreased $13.8 million, or 6.7% at the Residential Kitchen Equipment Group. Domestically, the company realized a sales decrease of $10.0 million, or 7.4%, to $124.8 million, as compared to $134.8 million in the prior year period. Excluding the acquisition, the net decrease in domestic sales was $11.0 million, or 8.2%. International sales decreased $2.8 million, or 4.0%, to $68.0 million, as compared to $70.8 million in the prior year period. Excluding the impact of foreign exchange, the net sales decrease in international sales was $2.8 million, or 4.0%. The decrease in net sales was primarily driven by challenging market conditions domestically and in the European markets.

Current wording

•Net sales of the Residential Kitchen Equipment Group decreased by $6.8 million, or 3.8%, to $173.2 million in the three months period ended September 28, 2024, as compared to $180.0 million in the prior year period. Excluding the impact of the acquisition of Trade-Wind, acquired August 1, 2023, net sales decreased $7.0 million, or 3.9%. Excluding the impact of foreign exchange and acquisition, net sales decreased $8.1 million, or 4.5% at the Residential Kitchen Equipment Group. Domestically, the company realized a sales decrease of $3.6 million, or 3.1%, to $112.9 million, as compared to $116.5 million in the prior year period. Excluding the acquisition, the net decrease in domestic sales was $3.8 million, or 3.3%. International sales decreased $3.2 million, or 5.0%, to $60.3 million, as compared to $63.5 million in the prior year period. Excluding the impact of foreign exchange, the net sales decrease in international sales was $4.3 million, or 6.8%. The decrease in net sales is primarily driven by challenging market conditions domestically and in the European markets.

Previous wording

GROSS PROFIT. Gross profit decreased to $379.6 million in the three months period ended June 29, 2024, as compared to $393.2 million in the prior year period, primarily driven by lower sales volumes. The impact of foreign exchange rates decreased gross profit by approximately $0.8 million. The gross margin rate was 38.3% in the three months period ended June 29, 2024, as compared to 37.8% in the prior year period primarily reflecting an improved product mix.

Current wording

GROSS PROFIT. Gross profit decreased to $355.4 million in the three months period ended September 28, 2024, as compared to $375.3 million in the prior year period, primarily driven by lower sales volumes. The impact of foreign exchange rates increased gross profit by approximately $0.8 million. The gross margin rate was 37.7% in the three months period ended September 28, 2024, as compared to 38.3% in the prior year period.

Previous wording

•Gross profit at the Food Processing Equipment Group increased by $5.4 million, or 8.3%, to $70.2 million in thethree months period ended June 29, 2024, as compared to $64.8 million in the prior year period. Gross profit from the acquisitions of Filtration Automation, GBT GmbH Bakery, and MaxMac increased gross profit by $1.2 million. The impact of foreign exchange rates decreased gross profit by approximately $0.2 million. Excluding the acquisitions, gross profit increased by $4.2 million. The gross profit margin rate increased to 39.1%, as compared to 34.3% in the prior year period. The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 38.9%.

Current wording

•Gross profit at the Food Processing Equipment Group decreased by $0.2 million, or 0.3%, to $66.2 million in thethree months period ended September 28, 2024, as compared to $66.4 million in the prior year period. Gross profit from the acquisitions of GBT GmbH Bakery and MaxMac increased gross profit by $0.4 million. The impact of foreign exchange rates increased gross profit by approximately $0.3 million. Excluding the acquisitions, gross profit decreased by $0.6 million. The gross profit margin rate decreased to 39.1%, as compared to 39.8% in the prior year period, primarily related to product mix. The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 39.0%.

Previous wording

•Gross profit at the Residential Kitchen Equipment Group decreased by $12.4 million, or 17.9%, to $57.0 million in the three months period ended June 29, 2024, as compared to $69.4 million in the prior year period. Excluding the acquisition, gross profit decreased by $12.8 million related to lower sales volume. The gross margin rate decreased to 29.6%, as compared to 33.8% in the prior year period. The gross margin rate excluding the acquisition and the impact of foreign exchange was 29.5%.

Current wording

•Gross profit at the Residential Kitchen Equipment Group decreased by $1.7 million, or 3.1%, to $52.8 million in the three months period ended September 28, 2024, as compared to $54.5 million in the prior year period. The impact of foreign exchange rates increased gross profit by approximately $0.4 million. Excluding the acquisition, gross profit decreased by $1.8 million related to lower sales volume. The gross margin rate increased to 30.5%, as compared to 30.3% in the prior year period. The gross margin rate excluding the acquisition and the impact of foreign exchange was 30.4%.

Previous wording

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Combined selling, general and administrative expenses decreased to $198.6 million in the three months period ended June 29, 2024, as compared to $203.5 million in the three months period ended July 1, 2023. As a percentage of net sales, selling, general, and administrative expenses were 20.0% in the three months period ended June 29, 2024 as compared to 19.6% in the three months period ended July 1, 2023.

Current wording

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Combined selling, general and administrative expenses decreased to $179.5 million in the three months period ended September 28, 2024, as compared to $196.4 million in the three months period ended September 30, 2023. As a percentage of net sales, selling, general, and administrative expenses were 19.0% in the three months period ended September 28, 2024 as compared to 20.0% in the three months period ended September 30, 2023.

Previous wording

Selling, general and administrative expenses reflect increased costs of $3.4 million associated with acquisitions, including $0.5 million of intangible amortization expense. Selling, general and administrative expenses decreased $4.6 million related to intangible amortization expense, $4.1 million related to professional fees and $5.8 million related to reduced compensation costs including commissions. Foreign exchange rates had an unfavorable impact of $0.5 million.

Current wording

Selling, general and administrative expenses reflect increased costs of $0.9 million associated with acquisitions, including less than $0.1 million of intangible amortization expense. Selling, general and administrative expenses decreased $9.1 million related to reduced compensation costs including commissions, $5.4 million related to professional fees, and $3.9 million related to intangible amortization expense. Foreign exchange rates had an unfavorable impact of $0.1 million.

Previous wording

RESTRUCTURING EXPENSES. Restructuring expenses increased $0.5 million to $5.4 million for the three months period ended June 29, 2024, as compared to $4.9 million for the three months period ended July 1, 2023. Restructuring expenses in the three months period ended June 29, 2024 related primarily to headcount reductions and facility consolidations within all three segments. Restructuring expenses in the three months period ended July 1, 2023 related primarily to headcount reductions and facility consolidations within the Residential Kitchen Equipment Group and Commercial Foodservice Group.

Current wording

RESTRUCTURING EXPENSES. Restructuring expenses decreased $1.9 million to $2.5 million for the three months period ended September 28, 2024, as compared to $4.4 million for the three months period ended September 30, 2023. Restructuring expenses in the three months period ended September 28, 2024 related primarily to headcount reductions and facility consolidations within all three segments. Restructuring expenses in the three months period ended September 30, 2023 related primarily to headcount reductions and facility consolidations within the Residential Kitchen Equipment Group and Commercial Foodservice Group.

Previous wording

NON-OPERATING EXPENSES. Interest and deferred financing amortization costs were $24.6 million in the three months period ended June 29, 2024, as compared to $31.5 million in the prior year period primarily reflecting the decrease in debt levels on our current debt structure. Net periodic pension benefit (other than service costs) increased $1.1 million to $3.7 million in the three months period ended June 29, 2024, as compared to $2.6 million in the prior year period related to the slight decrease in discount rate used to calculate the interest cost and increase in expected return on assets as a result of the higher assets value. Other expense was $0.1 million in the three months period ended June 29, 2024, as compared to other income of $0.3 million in the prior year period and consists mainly of foreign exchange gains and losses.

Current wording

NON-OPERATING EXPENSES. Interest and deferred financing amortization costs were $21.4 million in the three months period ended September 28, 2024, as compared to $31.1 million in the prior year period, primarily reflecting the decrease in net debt levels. Net periodic pension benefit (other than service costs) increased $1.8 million to $3.9 million in the three months period ended September 28, 2024, as compared to $2.1 million in the prior year period related to the slight decrease in discount rate used to calculate the interest cost and increase in expected return on assets as a result of the higher asset value. Other expense was $1.2 million in the three months period ended September 28, 2024, as compared to other expense of $1.1 million in the prior year period and consists mainly of foreign exchange gains and losses.

Previous wording

INCOME TAXES. A tax provision of $39.4 million, at an effective rate of 25.4%, was recorded during the three months period ended June 29, 2024, as compared to $39.3 million at an effective rate of 25.2%, in the prior year period. The effective tax rate for thethree months period ended June 29, 2024 is higher than the U.S. statutory tax rate of 21% primarily due to state taxes and foreign tax rate differentials.

Current wording

INCOME TAXES. A tax provision of $40.5 million, at an effective rate of 26.2%, was recorded during the three months period ended September 28, 2024, as compared to $35.7 million at an effective rate of 24.8%, in the prior year period. The effective tax rate for thethree months period ended September 28, 2024 is higher than the U.S. statutory tax rate of 21% primarily due to state taxes and foreign tax rate differentials.

Previous wording

NET SALES. Net sales for the six months period ended June 29, 2024 decreased by $128.9 million, or 6.3%, to $1,918.5 million as compared to $2,047.4 million in the six months period ended July 1, 2023. Net sales increased by $7.2 million, or 0.4%, from the fiscal 2023 acquisitions of Flavor Burst, Blue Sparq, Filtration Automation, Terry, and Trade-Wind and the fiscal 2024 acquisitions of GBT GmbH Bakery and MaxMac. Excluding acquisitions, net sales decreased $136.1 million, or 6.6%, from the prior year period. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars for the six months period ended June 29, 2024 increased net sales by approximately $1.6 million. Excluding the impact of foreign exchange and acquisitions, sales decreased 6.7% for the six months period ended June 29, 2024 as compared to the prior year period, including a net sales decrease of 4.0% at the Commercial Foodservice Equipment Group, a net sales decrease of 6.7% at the Food Processing Equipment Group and a net sales decrease of 14.7% at the Residential Kitchen Equipment Group.

Current wording

NET SALES. Net sales for the nine months period ended September 28, 2024 decreased by $166.7 million, or 5.5%, to $2,861.3 million as compared to $3,028.0 million in the nine months period ended September 30, 2023. Net sales increased by $8.8 million, or 0.3%, from the fiscal 2023 acquisitions of Flavor Burst, Blue Sparq, Filtration Automation, Terry, and Trade-Wind and the fiscal 2024 acquisitions of GBT GmbH Bakery and MaxMac. Excluding acquisitions, net sales decreased $175.5 million, or 5.8%, from the prior year period. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars for the nine months period ended September 28, 2024 increased net sales by approximately $2.7 million. Excluding the impact of foreign exchange and acquisitions, sales decreased 5.9% for the nine months period ended September 28, 2024 as compared to the prior year period, including a net sales decrease of 4.5% at the Commercial Foodservice Equipment Group, a net sales decrease of 4.3% at the Food Processing Equipment Group and a net sales decrease of 11.7% at the Residential Kitchen Equipment Group.

Previous wording

•Net sales of the Commercial Foodservice Equipment Group decreased by $49.9 million, or 4.0%, to $1,209.7 million in the six months period ended June 29, 2024, as compared to $1,259.6 million in the prior year period. Net sales from the acquisitions of Flavor Burst, Blue Sparq, and Terry which were acquired on January 24, 2023, April 3, 2023 and July 5, 2023, respectively, accounted for an increase of $1.5 million during the six months period ended June 29, 2024. Excluding the impact of acquisitions, net sales of the Commercial Foodservice Equipment Group decreased $51.4 million, or 4.1%, as compared to the prior year period. Excluding the impact of foreign exchange and acquisitions, net sales decreased $51.0 million, or 4.0%, at the Commercial Foodservice Equipment Group. Domestically, the company realized a sales decrease of $58.5 million, or 6.3%, to $868.9 million, as compared to $927.4 million in the prior year period. This includes an increase of $1.4 million from recent acquisitions. Excluding acquisitions, the net decrease in domestic sales was $59.9 million, or 6.5%, as compared to the prior year period. The decrease in domestic sales is related to slow market conditions. International sales increased $8.6 million, or 2.6%, to $340.8 million, as compared to $332.2 million in the prior year period. Excluding the impact of foreign exchange and acquisitions, the net sales increase in international sales was $8.9 million, or 2.7%. The increase in international revenues is related to improvements in market conditions, primarily in the European and Latin American markets.

Current wording

•Net sales of the Commercial Foodservice Equipment Group decreased by $83.8 million, or 4.4%, to $1,809.8 million in the nine months period ended September 28, 2024, as compared to $1,893.6 million in the prior year period. Net sales from the acquisitions of Flavor Burst, Blue Sparq, and Terry which were acquired on January 24, 2023, April 3, 2023 and July 5, 2023, respectively, accounted for an increase of $1.5 million during the nine months period ended September 28, 2024. Excluding the impact of acquisitions, net sales of the Commercial Foodservice Equipment Group decreased $85.3 million, or 4.5%, as compared to the prior year period. Excluding the impact of foreign exchange and acquisitions, net sales decreased $84.6 million, or 4.5%, at the Commercial Foodservice Equipment Group. Domestically, the company realized a sales decrease of $97.5 million, or 7.0%, to $1,288.4 million, as compared to $1,385.9 million in the prior year period. This includes an increase of $1.4 million from recent acquisitions. Excluding acquisitions, the net decrease in domestic sales was $98.9 million, or 7.1%, as compared to the prior year period. The decrease in domestic sales is related to slow market conditions. International sales increased $13.7 million, or 2.7%, to $521.4 million, as compared to $507.7 million in the prior year period. This includes an increase of $0.1 million from the recent acquisitions, offset by a decrease of $0.7 million related to the unfavorable impact of foreign exchange rates. Excluding the impact of foreign exchange and acquisitions, the net sales increase in international sales was $14.3 million, or 2.8%. The increase in international revenues is related to improvements in market conditions, primarily in the European and Latin American markets.

Previous wording

•Net sales of the Food Processing Equipment Group decreased by $20.2 million, or 5.6%, to $342.1 million in the six months period ended June 29, 2024, as compared to $362.3 million in the prior year period. Net sales from the acquisitions of Filtration Automation, GBT GmbH Bakery, and MaxMac acquired June 13, 2023, February 7, 2024, and April 19, 2024, respectfully, accounted for an increase of $3.7 million during the six months period ended June 29, 2024. Excluding the impact of acquisitions, net sales of the Food Processing Equipment Group decreased $23.9 million, or 6.6%, as compared to the prior year period. Excluding the impact of foreign exchange and acquisitions, net sales decreased $24.1 million, or 6.7%, at the Food Processing Equipment Group. Domestically, the company realized a sales decrease of $32.2 million, or 13.2%, to $211.7 million, as compared to $243.9 million in the prior year period. This includes an increase of $2.6 million from recent acquisitions. Excluding acquisitions, the net decrease in domestic sales was $34.8 million, or 14.3%, as compared to the prior year period. The decrease in domestic sales is driven primarily by protein products. International sales increased $12.0 million, or 10.1%, to $130.4 million, as compared to $118.4 million in the prior year period. This includes an increase of $1.1 million from the recent acquisitions and an increase of $0.2 million related to the favorable impact of exchange rates. Excluding the impact of foreign exchange and acquisitions, the net sales increase in international sales was $10.7 million, or 9.0%. The increase in international sales reflects growth driven primarily by protein products.

Current wording

•Net sales of the Food Processing Equipment Group decreased by $17.3 million, or 3.3%, to $511.6 million in the nine months period ended September 28, 2024, as compared to $528.9 million in the prior year period. Net sales from the acquisitions of Filtration Automation, GBT GmbH Bakery, and MaxMac acquired June 13, 2023, February 7, 2024, and April 19, 2024, respectively, accounted for an increase of $5.1 million during the nine months period ended September 28, 2024. Excluding the impact of acquisitions, net sales of the Food Processing Equipment Group decreased $22.4 million, or 4.2%, as compared to the prior year period. Excluding the impact of foreign exchange and acquisitions, net sales decreased $22.9 million, or 4.3%, at the Food Processing Equipment Group. Domestically, the company realized a sales decrease of $39.8 million, or 11.2%, to $315.1 million, as compared to $354.9 million in the prior year period. This includes an increase of $2.6 million from recent acquisitions. Excluding acquisitions, the net decrease in domestic sales was $42.4 million, or 11.9%, as compared to the prior year period. The decrease in domestic sales is driven primarily by protein products. International sales increased $22.5 million, or 12.9%, to $196.5 million, as compared to $174.0 million in the prior year period. This includes an increase of $2.5 million from the recent acquisitions and an increase of $0.5 million related to the favorable impact of foreign exchange rates. Excluding the impact of foreign exchange and acquisitions, the net sales increase in international sales was $19.5 million, or 11.2%. The increase in international sales reflects growth driven primarily by bakery and protein products in the European markets.

Previous wording

•Net sales of the Residential Kitchen Equipment Group decreased by $58.8 million, or 13.8%, to $366.7 million in the six months period ended June 29, 2024, as compared to $425.5 million in the prior year period. Excluding the impact of the acquisition of Trade-Wind, net sales decreased $60.8 million, or 14.3%. Excluding the impact of foreign exchange, net sales decreased $62.6 million, or 14.7%, at the Residential Kitchen Equipment Group. Domestically, the company realized a sales decrease of $46.9 million, or 16.8%, to $231.8 million, as compared to $278.7 million in the prior year period. Excluding the impact of acquisition, the net sales of the Residential Kitchen Equipment Group decreased $48.9 million, or 17.5%, as compared to the prior year period. International sales decreased $11.9 million, or 8.1%, to $134.9 million, as compared to $146.8 million in the prior year period. This includes an increase of $1.8 million related to the favorable impact of exchange rates. Excluding the impact of foreign exchange and acquisitions, the net sales decrease in international sales was $13.7 million, or 9.3%. The decrease in net sales was primarily driven by challenging market conditions domestically and in the European markets.

Current wording

•Net sales of the Residential Kitchen Equipment Group decreased by $65.6 million, or 10.8%, to $539.9 million in the nine months period ended September 28, 2024, as compared to $605.5 million in the prior year period. Excluding the impact of the acquisition of Trade-Wind, net sales decreased $67.8 million, or 11.2%. Excluding the impact of foreign exchange and acquisition, net sales decreased $70.7 million, or 11.7%, at the Residential Kitchen Equipment Group. Domestically, the company realized a sales decrease of $50.5 million, or 12.8%, to $344.7 million, as compared to $395.2 million in the prior year period. Excluding the acquisition, the net sales of the Residential Kitchen Equipment Group decreased $52.7 million, or 13.3%, as compared to the prior year period. International sales decreased $15.1 million, or 7.2%, to $195.2 million, as compared to $210.3 million in the prior year period. This includes an increase of $2.9 million related to the favorable impact of foreign exchange rates. Excluding the impact of foreign exchange, the net sales decrease in international sales was $18.0 million, or 8.6%. The decrease in net sales was primarily driven by challenging market conditions domestically and in the European markets.

Previous wording

GROSS PROFIT. Gross profit decreased to $726.0 million in the six months period ended June 29, 2024 as compared to $772.0 million in the prior year period, primarily driven by lower sales volumes at the Commercial Foodservice Equipment Group and Residential Kitchen Equipment Group. The impact of foreign exchange rates increased gross profit by approximately $0.4 million. The gross margin rate was 37.8% in the six months period ended June 29, 2024 as compared to 37.7% in the six months period ended July 1, 2023 primarily reflecting improved product mix.

Current wording

GROSS PROFIT. Gross profit decreased to $1,081.4 million in the nine months period ended September 28, 2024 as compared to $1,147.3 million in the prior year period, primarily driven by lower sales volumes at the Commercial Foodservice Equipment Group and Residential Kitchen Equipment Group. The impact of foreign exchange rates increased gross profit by approximately $1.2 million. The gross margin rate was 37.8% in the nine months period ended September 28, 2024 as compared to 37.9% in the nine months period ended September 30, 2023.

Previous wording

•Gross profit at the Commercial Foodservice Equipment Group decreased by $19.0 million, or 3.8%, to $482.4 million in the six months period ended June 29, 2024, as compared to $501.4 million in the prior year period. Gross profit from the acquisitions of Flavor Burst, Blue Sparq, and Terry increased gross profit by $0.8 million. Excluding acquisitions, gross profit decreased by $19.8 million related to lower sales volume. The impact of foreign exchange rates decreased gross profit by approximately $0.3 million. The gross margin rate increased to 39.9%, as compared to 39.8% in the prior year period. The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 39.9%.

Current wording

•Gross profit at the Commercial Foodservice Equipment Group decreased by $37.4 million, or 4.9%, to $719.3 million in the nine months period ended September 28, 2024, as compared to $756.7 million in the prior year period. Gross profit from the acquisitions of Flavor Burst, Blue Sparq, and Terry increased gross profit by $0.8 million. Excluding acquisitions, gross profit decreased by $38.2 million related to lower sales volume. The impact of foreign exchange rates decreased gross profit by approximately $0.2 million. The gross margin rate decreased to 39.7%, as compared to 40.0% in the prior year period. The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 39.7%.

Previous wording

•Gross profit at the Food Processing Equipment Group increased by $3.2 million, or 2.5%, to $133.6 million in the six months period ended June 29, 2024, as compared to $130.4 million in the prior year period. Gross profit from the acquisitions of Filtration Automation, GBT GmbH Bakery, and MaxMac increased gross profit by $2.0 million. Excluding acquisitions, gross profit increased by $1.2 million. The impact of foreign exchange rates increased gross profit by approximately $0.2 million. The gross profit margin rate increased to 39.1%, as compared to 36.0% in the prior year period primarily related to improved product mix. The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 38.9%.

Current wording

•Gross profit at the Food Processing Equipment Group increased by $3.0 million, or 1.5%, to $199.8 million in the nine months period ended September 28, 2024, as compared to $196.8 million in the prior year period. Gross profit from the acquisitions of Filtration Automation, GBT GmbH Bakery, and MaxMac increased gross profit by $2.4 million. Excluding acquisitions, gross profit increased by $0.6 million. The impact of foreign exchange rates increased gross profit by approximately $0.4 million. The gross profit margin rate increased to 39.1%, as compared to 37.2% in the prior year period, primarily related to improved product mix. The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 38.9%.

Previous wording

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Combined selling, general and administrative expenses decreased to $404.6 million in the six months period ended June 29, 2024, as compared to $418.9 million in the six months period ended July 1, 2023. As a percentage of net sales, selling, general, and administrative expenses were 21.1% in the six months period ended June 29, 2024, as compared to 20.5% in the six months period ended July 1, 2023.

Current wording

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Combined selling, general and administrative expenses decreased to $584.1 million in the nine months period ended September 28, 2024, as compared to $615.4 million in the nine months period ended September 30, 2023. As a percentage of net sales, selling, general, and administrative expenses were 20.4% in the nine months period ended September 28, 2024, as compared to 20.3% in the nine months period ended September 30, 2023.

Previous wording

Selling, general and administrative expenses reflect increased costs of $0.9 million associated with acquisitions, including $0.2 million of intangible amortization expense. Selling, general and administrative expenses decreased $2.3 million related to professional fees, $1.4 million related to lower commissions and $1.1 in reduced compensation costs. Foreign exchange rates had a favorable impact of $0.4 million.

Current wording

Selling, general and administrative expenses reflect increased costs of $4.4 million associated with acquisitions, including $0.5 million of intangible amortization expense. Selling, general and administrative expenses decreased $14.9 million related to reduced compensation costs including commissions, $9.5 million related to professional fees, $8.5 million related to intangible amortization expense and $4.6 million for contingent consideration, offset by a $1.3 million increase in marketing and advertising costs. Foreign exchange rates had an unfavorable impact of $0.6 million.

Previous wording

RESTRUCTURING EXPENSES. Restructuring expenses increased $1.2 million to $8.5 million in the six months period ended June 29, 2024 from $7.3 million in the six months period ended July 1, 2023. Restructuring expenses in the six months period ended June 29, 2024 related primarily to headcount reductions and facility consolidations within all three segments. Restructuring expenses in the six months period ended July 1, 2023 related primarily to headcount reductions and facility consolidations within the Residential Kitchen Equipment Group and Commercial Foodservice Equipment Group.

Current wording

RESTRUCTURING EXPENSES. Restructuring expenses decreased $0.7 million to $11.0 million in the nine months period ended September 28, 2024 from $11.7 million in the nine months period ended September 30, 2023. Restructuring expenses in the nine months period ended September 28, 2024 related primarily to headcount reductions and facility consolidations within all three segments. Restructuring expenses in the nine months period ended September 30, 2023 related primarily to headcount reductions and facility consolidations within the Residential Kitchen Equipment Group and Commercial Foodservice Equipment Group.

Previous wording

NON-OPERATING EXPENSES. Interest and deferred financing amortization costs were $50.8 million in the six months period ended June 29, 2024, as compared to $61.0 million in the prior year period, reflecting the decrease in debt levels on our current debt structure. Net periodic pension benefit (other than service costs) increased $2.6 million to $7.4 million in the six months period ended June 29, 2024, as compared to $4.8 million in the prior year period related to the decrease in discount rate used to calculate the interest cost and increase in expected return on assets as a result of the higher assets value. Other income was $0.2 million in the six months period ended June 29, 2024, as compared to other expense of $1.6 million in the prior year period and consists mainly of foreign exchange gains and losses.

Current wording

NON-OPERATING EXPENSES. Interest and deferred financing amortization costs were $72.2 million in the nine months period ended September 28, 2024, as compared to $92.1 million in the prior year period, reflecting the decrease in net debt levels. Net periodic pension benefit (other than service costs) increased $4.3 million to $11.2 million in the nine months period ended September 28, 2024, as compared to $6.9 million in the prior year period related to the decrease in discount rate used to calculate the interest cost and increase in expected return on assets as a result of the higher asset value. Other expense was $1.0 million in the nine months period ended September 28, 2024, as compared to other expense of $2.6 million in the prior year period and consists mainly of foreign exchange gains and losses.

Previous wording

INCOME TAXES. A tax provision of $67.7 million, at an effective rate of 25.1%, was recorded during the six months period ended June 29, 2024, as compared to $72.1 million at an effective rate of 25.0%, in the prior year period. The effective tax rate for the six months period ended June 29, 2024 is higher than the prior period year rate primarily due to an increase in the UK statutory income tax rate from a 23.5% blended rate in 2023 to 25.0% in 2024.

Current wording

INCOME TAXES. A tax provision of $108.2 million, at an effective rate of 25.5%, was recorded during the nine months period ended September 28, 2024, as compared to $107.9 million at an effective rate of 24.9%, in the prior year period. The effective tax rate for the nine months period ended September 28, 2024 is higher than the U.S. statutory tax rate of 21% primarily due to state taxes and foreign tax rate differentials.

Previous wording

Total cash and cash equivalents increased by $212.0 million to $459.5 million at June 29, 2024 from $247.5 million at December 30, 2023. Total debt amounted to $2.4 billion at June 29, 2024 and December 30, 2023.

Current wording

Total cash and cash equivalents increased by $358.5 million to $606.0 million at September 28, 2024 from $247.5 million at December 30, 2023. Total debt amounted to $2.4 billion at September 28, 2024 and December 30, 2023.

Previous wording

OPERATING ACTIVITIES. Net cash provided by operating activities after changes in assets and liabilities amounted to $290.4 million as compared to $154.0 million in the prior year.

Current wording

OPERATING ACTIVITIES. Net cash provided by operating activities after changes in assets and liabilities amounted to $447.1 million as compared to $373.1 million in the prior year.

Previous wording

During the six months period ended June 29, 2024, working capital changes meaningfully impacted operating cash flows primarily driven by a decrease in accounts receivable of $14.8 million due to lower sales levels, decreased inventory levels of $7.7 million and an increase of $13.7 million in accounts payable.

Current wording

During the nine months period ended September 28, 2024, working capital changes meaningfully impacted operating cash flows primarily driven by a decrease in accounts receivable of $31.4 million due to lower sales levels, decreased inventory levels of $33.1 million. These were offset by a $41.7 million decrease in accrued expenses and other liabilities related to impacts from the timing of payments of various customer and incentive programs.

Previous wording

INVESTING ACTIVITIES. During the six months period ended June 29, 2024, net cash used for investing activities amounted to $30.3 million. Cash used to fund acquisitions amounted to $5.6 million. Additionally, $24.7 millionwas expended, primarily for upgrades of production equipment and manufacturing facilities.

Current wording

INVESTING ACTIVITIES. During the nine months period ended September 28, 2024, net cash used for investing activities amounted to $44.0 million. Cash used to fund acquisitions amounted to $7.8 million. Additionally, $36.2 millionwas expended, primarily for upgrades of production equipment and manufacturing facilities.

Previous wording

FINANCING ACTIVITIES. Net cash flows used for financing activities amounted to $42.7 million during the six months period ended June 29, 2024. The company’s borrowing activities during 2024 included $21.9 million of net repayments under its Credit Facility. Additionally, during 2024, the company used $18.0 million to repurchase 116,155 shares of Middleby common stock that were surrendered to the company for withholding taxes related to restricted stock vestings.

Current wording

FINANCING ACTIVITIES. Net cash flows used for financing activities amounted to $45.8 million during the nine months period ended September 28, 2024. The company’s borrowing activities during 2024 included $21.9 million of net repayments under its Credit Facility. Additionally, during 2024, the company used $18.3 million to repurchase 118,026 shares of Middleby common stock that were surrendered to the company for withholding taxes related to restricted stock vestings.