MIDDLEBY Corp

Previous wording

•risks associated with the company's foreign operations, including market acceptance and demand for the company's products and the company's ability to manage the risk associated with the exposure to foreign currency exchange rate fluctuations;

Current wording

•risks associated with the company's foreign operations, including market acceptance and demand for the company's products and the company's ability to manage the risk associated with the exposure to foreign currency exchange rate fluctuations and tariffs;

Previous wording

•the state of the credit markets, including mortgages, home equity loans and consumer credit;

Current wording

•the state of the credit markets and consumer credit;

Previous wording

On February 25, 2025, the company announced its intent to separate its Food Processing business through a spin-off of the Food Processing business, under which the stock of Food Processing, as a new independent publicly traded company, will be distributed to Middleby’s shareholders. As of the date hereof, Middleby is targeting completion of the separation by early 2026, subject to certain customary conditions, including, among others, final approval by the company’s Board of Directors and the effectiveness of appropriate filings with the SEC. The spin-off of Food Processing is expected to be tax-free for U.S. federal income tax purposes. There can be no assurance that any separation transaction will ultimately occur or, if one does occur, of its terms or timing.

Current wording

On February 25, 2025, the company announced its intent to separate its Food Processing business through a spin-off of the Food Processing business, under which the stock of Food Processing, as a new independent publicly traded company, will be distributed to Middleby’s shareholders. As of the date hereof, Middleby is targeting completion of the separation in the second quarter of 2026, subject to certain customary conditions, including, among others, final approval by the company’s Board of Directors and the effectiveness of appropriate filings with the SEC. The spin-off of Food Processing is expected to be tax-free for U.S. federal income tax purposes. There can be no assurance that any separation transaction will ultimately occur or, if one does occur, of its terms or timing.

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 let 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. 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

In addition to tariffs, 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. Recently announced interest rate cuts are expected to reduce demand headwinds in the long term; however consumer demand in the near term has and may continue to be impacted by higher inflation levels and uncertainty surrounding the Federal Reserve’s future interest rate policy decisions.

Previous wording

The company continues to actively monitor global supply chain, labor and logistics constraints, which have had a negative impact on the company's ability to source parts and complete and ship units. While the company is seeing improvement on certain supply chain and logistics constraints, supply chains for certain key components remain distressed. The decreased availability of resources and inflationary costs resulted in heightened inventory levels for certain components above current demand levels. To combat these pressures, the company has evaluated alternative sourcing, dual sourcing and collaborated across the organization, where appropriate, without materially presenting new risks or increasing current risks around quality and reliability. Our capital resources have been and the company expects they will continue to be sufficient to address these challenges.

Current wording

The company continues to actively monitor global supply chain, labor and logistics constraints, which have had a negative impact on the company's ability to source parts and complete and ship units. While the company is seeing improvement on certain supply chain and logistics constraints, supply chains for certain key components remain distressed and uncertain given trade policy and tariff actions. The decreased availability of resources and inflationary costs have resulted in heightened inventory levels. To combat these pressures, the company has evaluated alternative sourcing, dual sourcing and collaborated across the organization, where appropriate, without materially presenting new risks or increasing current risks around quality and reliability. Our capital resources have been and the company expects they will continue to be sufficient to address these challenges.

Previous wording

NET SALES. Net sales in fiscal 2023 increased by $3.7 million, or 0.1%, to $4,036.6 million as compared to $4,032.9 million in fiscal 2022. Net sales increased by $121.3 million, or 3.0%, from the fiscal 2022 acquisitions of Kloppenberg, Proxaut, Icetro, CP Packaging, Colussi Ermes, Escher, Marco, and the fiscal 2023 acquisitions of Flavor Burst, Blue Sparq, Filtration Automation, Terry, and Trade-Wind. Excluding acquisitions, net sales decreased $117.6 million, or 2.9%, from the prior year. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars for fiscal 2023 increased net sales by approximately $12.3 million. Excluding the impact of foreign exchange and acquisitions, sales decreased 3.2% for the year, including a net sales increase of 2.7% at the Commercial Foodservice Equipment Group, a net sales increase of 10.7% at the Food Processing Equipment Group and a net sales decrease of 24.7% at the Residential Kitchen Equipment Group.

Current wording

Net sales in fiscal 2025 increased by $51.0 million, or 1.6%, to $3,201.2 million as compared to $3,150.2 million in fiscal 2024. Net sales increased by $107.3 million, or 3.4%, from the fiscal 2024 acquisitions of GBT GmbH Bakery, MaxMac, Emery Thompson, JC Ford, and Gorreri and the fiscal 2025 acquisitions of Frigomeccanica and Oka. Excluding acquisitions, net sales decreased $56.3 million, or 1.8%, from fiscal 2024. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars in fiscal 2025 increased net sales by approximately $18.7 million. Excluding the impact of foreign exchange and acquisitions, sales decreased 2.4% for the year, including a net sales decrease of 1.7% at the Commercial Foodservice Equipment Group and a net sales decrease of 4.5% at the Food Processing Equipment Group.

Previous wording

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES. Combined selling, general, and administrative expenses increased by $9.7 million to $806.9 million in fiscal 2023 from $797.2 million in 2022. As a percentage of net sales, selling, general and administrative expenses amounted to 20.0% in fiscal 2023 and 19.8% in fiscal 2022.

Current wording

Combined selling, general and administrative expenses increased to $663.2 million in fiscal 2025, as compared to $590.1 million in fiscal 2024. As a percentage of net sales, selling, general, and administrative expenses were 20.7% in fiscal 2025, as compared to 18.7% in fiscal 2024.

Previous wording

Selling, general and administrative expenses reflect increased costs of $33.6 million associated with acquisitions, including $5.6 million of non-cash intangible amortization expense. Selling, general and administrative expenses reflect decreases in intangible amortization expense of $16.8 million, compensation costs including commissions of $7.8 million, and professional fees of $5.4 million. These decreases were partially offset by $8.5 million attributed to higher selling and marketing expenses. Foreign exchange rates had an unfavorable impact of $2.2 million.

Current wording

Selling, general and administrative expenses reflect increased costs of $24.0 million associated with acquisitions, including $4.9 million of intangible amortization expense. Selling, general and administrative expenses reflect increases in strategic transaction costs of $19.8 million, combined compensation costs and share-based compensation of $12.5 million, advertising and trade show expenses of $9.2 million, commissions of $5.9 million, travel expenses of $3.2 million and professional fees of $2.1 million. This was partially offset by a decrease of $7.0 million related to intangible amortization expenses. Foreign exchange rates had an unfavorable impact of $3.1 million.

Previous wording

IMPAIRMENTS. In fiscal 2023, the company recognized non-cash impairment of $78.1 million primarily associated with several trademarks in the Residential Kitchen Equipment Group in conjunction with diminution of values as we assessed recent market conditions and future business plans. See Note 3(f) to the Consolidated Financial Statements for further information on the annual impairment testing.

Current wording

In fiscal 2025, the company recognized non-cash impairment of $10.6 million primarily associated with certain trademarks in the Commercial Foodservice Equipment Group and Food Processing Equipment Group in conjunction with diminution of values as we assessed recent market conditions and future business plans. In fiscal 2024, the company recognized non-cash impairment of $10.5 million which consisted of $5.2 million impairment of certain trademarks within the Commercial Foodservice Equipment Group and an impairment charge of $5.3 million associated with the decline in recoverable value of an equity method investment. See Note 3(f) to the Consolidated Financial Statements for further information on the annual impairment testing.

Previous wording

INCOME FROM OPERATIONS. Income from operations decreased $4.7 million to $634.9 million in fiscal 2023 from $639.6 million in fiscal 2022. Operating income as a percentage of net sales amounted to 15.7% in 2023 as compared to 15.9% in 2022. During fiscal 2023, operating income included the impairment of intangible assets. Excluding the impairment, the increase in operating income resulted from increased profitability driven by product mix and execution of strategic cost initiatives.

Current wording

Income from continuing operations decreased $69.2 million to $574.9 million in fiscal 2025 from $644.1 million in fiscal 2024. Income from continuing operations as a percentage of net sales amounted to 18.0% in 2025 as compared to 20.5% in 2024. During fiscal 2025 and fiscal 2024, income from continuing operations included the impairment of intangible assets. Excluding the impairments, the decrease in operating income was primarily related to higher selling, general and administrative expenses.

Previous wording

Income from operations in 2024 included $194.8 million of non-cash expenses, including $55.6 million of depreciation expense, $64.4 million of intangible amortization related to acquisitions, $38.6 million of impairments and $36.2 million of stock based compensation. This compares to $254.5 million of non-cash expenses in the prior year, including $50.4 million of depreciation expense, $75.0 million of intangible amortization related to acquisitions, $78.1 million of impairments and $51.0 million of stock based compensation costs.

Current wording

Income from continuing operations in 2025 included $123.1 million of non-cash expenses, including $43.7 million of depreciation expense, $55.3 million of intangible amortization related to acquisitions, $10.6 million of impairments and $13.5 million of stock based compensation. This compares to $139.4 million of non-cash expenses in the prior year, including $39.8 million of depreciation expense, $57.2 million of intangible amortization related to acquisitions, $10.5 million of impairments and $31.9 million of stock based compensation costs.

Previous wording

INCOME TAXES. A tax provision of $148.9 million, at an effective rate of 25.8%, was recorded during fiscal 2024, as compared to $118.5 million at an effective rate of 22.8%, in fiscal 2023. The fiscal 2024 provision includes a $3.6 million net tax expense for the finalization of the 2023 tax returns as compared to the fiscal 2023 provision that included a net tax benefit of $7.0 million for the finalization of the 2022 tax returns. The effective tax rates in 2024 and 2023 were higher than the federal tax rate of 21% primarily due to state taxes and foreign tax rate differentials.

Current wording

A tax provision of $115.0 million, at an effective rate of 23.8%, was recorded during fiscal 2025, as compared to $145.1 million at an effective rate of 25.6%, in fiscal 2024. The effective tax rates in 2025 and 2024 were higher than the federal tax rate of 21% primarily due to state taxes and foreign tax rate differentials.

Previous wording

NET SALES. Net sales in fiscal 2024 decreased by $161.4 million, or 4.0%, to $3,875.2 million as compared to $4,036.6 million in fiscal 2023. Net sales increased by $29.7 million, or 0.7%, from the fiscal 2023 acquisitions of Flavor Burst, Blue Sparq, Filtration Automation, Terry, and Trade-Wind and the fiscal 2024 acquisitions of GBT, MaxMac, Emery Thompson, JC Ford, and Gorreri. Excluding acquisitions, net sales decreased $191.1 million, or 4.7%, from fiscal 2023. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars in fiscal 2024 increased net sales by approximately $0.5 million. Excluding the impact of foreign exchange and acquisitions, sales decreased 4.7% for the year, including a net sales decrease of 4.1% at the Commercial Foodservice Equipment Group, a net sales decrease of 1.9% at the Food Processing Equipment Group and a net sales decrease of 9.5% at the Residential Kitchen Equipment Group.

Current wording

Net sales in fiscal 2024 decreased by $91.9 million, or 2.8%, to $3,150.2 million as compared to $3,242.1 million in fiscal 2023. Net sales increased by $27.5 million, or 0.8%, from the fiscal 2023 acquisitions of Flavor Burst, Blue Sparq, Filtration Automation and Terry and the fiscal 2024 acquisitions of GBT, MaxMac, Emery Thompson, JC Ford, and Gorreri. Excluding acquisitions, net sales decreased $119.4 million, or 3.7%, from fiscal 2023. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars in fiscal 2024 decreased net sales by approximately $3.1 million. Excluding the impact of foreign exchange and acquisitions, sales decreased 3.6% for the year, including a net sales decrease of 4.2% at the Commercial Foodservice Equipment Group and a net sales decrease of 1.5% at the Food Processing Equipment Group.

Previous wording

•Net sales of the Commercial Foodservice Equipment Group decreased by $102.2 million, or 4.1%, to $2,419.3 million in fiscal 2024, as compared to $2,521.5 million in fiscal 2023. Net sales from the acquisitions of Flavor Burst, Blue Sparq, Terry, and Emery Thompson accounted for an increase of $2.8 million during fiscal 2024. Excluding the impact of acquisitions, net sales of the Commercial Foodservice Equipment Group decreased $105.0 million, or 4.2%, as compared to fiscal 2023. Excluding the impact of foreign exchange and acquisitions, net sales decreased $102.3 million, or 4.1%, at the Commercial Foodservice Equipment Group. Domestically, the company realized a sales decrease of $118.0 million, or 6.5%, to $1,710.4 million, as compared to $1,828.4 million in fiscal 2023. This includes an increase of $2.7 million from recent acquisitions. Excluding acquisitions, the net decrease in domestic sales was $120.7 million, or 6.6%. The decrease in domestic sales is related to slow market conditions. International sales increased $15.8 million, or 2.3%, to $708.9 million, as compared to $693.1 million in the prior year. This includes an increase of $0.1 million from the recent acquisitions and a decrease of $2.7 million related to the unfavorable impact of exchange rates. Excluding the impact of foreign exchange and acquisitions, the net sales increase in international sales was $18.4 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 $104.9 million, or 4.2%, to $2,380.4 million in fiscal 2024, as compared to $2,485.3 million in fiscal 2023. Net sales from the acquisitions of Flavor Burst, Blue Sparq, Terry, and Emery Thompson accounted for an increase of $2.8 million during fiscal 2024. Excluding the impact of acquisitions, net sales of the Commercial Foodservice Equipment Group decreased $107.7 million, or 4.3%, as compared to fiscal 2023. Excluding the impact of foreign exchange and acquisitions, net sales decreased $104.8 million, or 4.2%, at the Commercial Foodservice Equipment Group. Domestically, the company realized a sales decrease of $117.1 million, or 6.4%, to $1,705.9 million, as compared to $1,823.0 million in fiscal 2023. This includes an increase of $2.7 million from recent acquisitions. Excluding acquisitions, the net decrease in domestic sales was $119.8 million, or 6.6%. The decrease in domestic sales is related to slow market conditions. International sales increased $12.2 million, or 1.8%, to $674.5 million, as compared to $662.3 million in the prior year. This includes an increase of $0.1 million from the recent acquisitions and a decrease of $2.9 million related to the unfavorable impact of exchange rates. Excluding the impact of foreign exchange and acquisitions, the net sales increase in international sales was $15.0 million, or 2.3%. 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 increased by $10.4 million, or 1.4%, to $731.0 million in fiscal 2024, as compared to $720.6 million in fiscal 2023. Net sales from the acquisitions of Filtration Automation, GBT, MaxMac, JC Ford, and Gorreri accounted for an increase of $24.7 million during fiscal 2024. Excluding the impact of acquisitions, net sales of the Food Processing Equipment Group decreased $14.3 million, or 2.0%, as compared to fiscal 2023. Excluding the impact of foreign exchange and acquisitions, net sales decreased $13.9 million, or 1.9%, at the Food Processing Equipment Group. Domestically, the company realized a sales decrease of $35.9 million, or 7.5%, to $443.4 million, as compared to $479.3 million in fiscal 2023. This includes an increase of $7.3 million from recent acquisitions. Excluding acquisitions, the net decrease in domestic sales was $43.2 million, or 9.0%. The decrease in domestic sales is driven primarily by lower sales volumes of protein products. International sales increased $46.3 million, or 19.2%, to $287.6 million, as compared to $241.3 million in the prior year. This includes an increase of $17.4 million from the recent acquisitions and a decrease of $0.4 million related to the unfavorable impact of exchange rates. Excluding the impact of foreign exchange and acquisitions, the net sales increase in international sales was $29.3 million, or 12.1%. The increase in international sales reflects growth driven primarily by increased sales volumes of bakery and protein products in the European markets.

Current wording

•Net sales of the Food Processing Equipment Group increased by $13.0 million, or 1.7%, to $769.8 million in fiscal 2024, as compared to $756.8 million in fiscal 2023. Net sales from the acquisitions of Filtration Automation, GBT, MaxMac, JC Ford, and Gorreri accounted for an increase of $24.7 million during fiscal 2024. Excluding the impact of acquisitions, net sales of the Food Processing Equipment Group decreased $11.7 million, or 1.5%, as compared to fiscal 2023. Excluding the impact of foreign exchange and acquisitions, net sales decreased $11.5 million, or 1.5%, at the Food Processing Equipment Group. Domestically, the company realized a sales decrease of $36.8 million, or 7.6%, to $447.9 million, as compared to $484.7 million in fiscal 2023. This includes an increase of $7.3 million from recent acquisitions. Excluding acquisitions, the net decrease in domestic sales was $44.1 million, or 9.1%. The decrease in domestic sales is driven primarily by lower sales volumes of protein products. International sales increased $49.9 million, or 18.3%, to $322.0 million, as compared to $272.1 million in the prior year. This includes an increase of $17.4 million from the recent acquisitions and a decrease of $0.2 million related to the unfavorable impact of exchange rates. Excluding the impact of foreign exchange and acquisitions, the net sales increase in international sales was $32.7 million, or 12.0%. The increase in international sales reflects growth driven primarily by increased sales volumes of bakery and protein products in the European markets.

Previous wording

GROSS PROFIT. Gross profit decreased to $1,470.4 million in fiscal 2024 as compared to $1,534.1 million in fiscal 2023, 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 $0.3 million. The gross margin rate was 37.9% in 2024 as compared to 38.0% in 2023.

Current wording

Gross profit decreased to $1,251.8 million in fiscal 2024 as compared to $1,284.1 million in fiscal 2023, primarily driven by lower sales volumes at the Commercial Foodservice Equipment Group. The impact of foreign exchange rates decreased gross profit by approximately $0.8 million. The gross margin rate was 39.7% in 2024 as compared to 39.6% in 2023.

Previous wording

•Gross profit at the Commercial Foodservice Equipment Group decreased by $52.3 million, or 5.2%, to $958.3 million in fiscal 2024, as compared to $1,010.6 million in fiscal 2023. Gross profit from the acquisitions of Flavor Burst, Blue Sparq, Terry, and Emery Thompson increased gross profit by $1.5 million. Excluding acquisitions, gross profit decreased by $53.8 million related to lower sales volume. The impact of foreign exchange rates decreased gross profit by approximately $0.7 million. The gross margin rate increased to 39.6%, as compared to 40.1% in fiscal 2023. The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 39.6%.

Current wording

•Gross profit at the Commercial Foodservice Equipment Group decreased by $53.1 million or 5.3%, to $943.5 million in fiscal 2024, as compared to $996.6 million in fiscal 2023. Gross profit from the acquisitions of Flavor Burst, Blue Sparq, Terry, and Emery Thompson increased gross profit by $1.5 million. Excluding acquisitions, gross profit decreased by $54.6 million related to lower sales volume. The impact of foreign exchange rates decreased gross profit by approximately $0.7 million. The gross margin rate decreased to 39.6%, as compared to 40.1% in fiscal 2023. The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 39.6%.

Previous wording

•Gross profit at the Food Processing Equipment Group increased by $16.2 million, or 5.9%, to $290.6 million in fiscal 2024, as compared to $274.4 million in fiscal 2023. Gross profit from the acquisitions of Filtration Automation, GBT, MaxMac, JC Ford, and Gorreri increased gross profit by $9.7 million. Excluding acquisitions, gross profit increased by $6.5 million related to improved product mix and acquisition integration benefits. The impact of foreign exchange rates decreased gross profit by approximately $0.1 million. The gross margin rate increased to 39.8%, as compared to 38.1% in fiscal 2023 primarily related to improved product mix. The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 39.8%.

Current wording

•Gross profit at the Food Processing Equipment Group increased by $17.1 million, or 5.9%, to $305.4 million in fiscal 2024, as compared to $288.3 million in fiscal 2023. Gross profit from the acquisitions of Filtration Automation, GBT, MaxMac, JC Ford, and Gorreri increased gross profit by $9.7 million. Excluding acquisitions, gross profit increased by $7.4 million related to improved product mix and acquisition integration benefits. The impact of foreign exchange rates decreased gross profit by approximately $0.1 million. The gross margin rate increased to 39.7%, as compared to 38.1% in fiscal 2023 primarily related to improved product mix. The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 39.7%.

Previous wording

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Combined selling, general and administrative expenses decreased to $762.5 million in fiscal 2024, as compared to $806.9 million in fiscal 2023. As a percentage of net sales, selling, general, and administrative expenses were 19.7% in fiscal 2024, as compared to 20.0% in fiscal 2023.

Current wording

Combined selling, general and administrative expenses decreased to $590.1 million in fiscal 2024, as compared to $624.9 million in fiscal 2023. As a percentage of net sales, selling, general, and administrative expenses were 18.7% in fiscal 2024, as compared to 19.3% in fiscal 2023.

Previous wording

Selling, general and administrative expenses reflect increased costs of $8.9 million associated with acquisitions, including $1.6 million of intangible amortization expense. Selling, general and administrative expenses decreased $31.2 million related to compensation cost including commissions, $12.3 million related to intangible amortization expense and $10.9 million in professional fees. Foreign exchange rates had a favorable impact of $0.3 million.

Current wording

Selling, general and administrative expenses reflect increased costs of $7.8 million associated with acquisitions, including $1.5 million of intangible amortization expense. Selling, general and administrative expenses decreased $19.8 million related to combined compensation costs and share-based compensation, $12.5 million in professional fees, $10.3 million related to intangible amortization expense and $4.0 million in lower commissions. Foreign exchange rates had a favorable impact of $0.5 million.

Previous wording

RESTRUCTURING EXPENSES. Restructuring expenses increased $0.1 million to $14.2 million in fiscal 2024 from $14.1 million in fiscal 2023. Restructuring expenses in fiscal 2024 related primarily to headcount reductions and facility consolidations within all three segments. Restructuring expenses in fiscal 2023 related primarily to headcount reductions and facility consolidations within the Residential Kitchen Equipment Group and Commercial Foodservice Equipment Group.

Current wording

Restructuring expenses decreased $3.5 million to $8.2 million in fiscal 2024 from $4.7 million in fiscal 2023. Restructuring expenses in fiscal 2024 related primarily to headcount reductions and facility consolidations within both segments. Restructuring expenses in fiscal 2023 related primarily to headcount reductions and facility consolidations within the Commercial Foodservice Equipment Group.

Previous wording

IMPAIRMENTS. In fiscal 2024, the company recognized non-cash impairment of $33.4 million primarily associated with several trademarks in the Residential Kitchen Equipment Group, as well as a few in the Commercial Foodservice Group in conjunction with diminution of values as we assessed recent market conditions and future business plans. In addition, the company recorded an impairment charge of approximately $5.2 million associated with the decline in recoverable value of an equity method investment. In fiscal 2023, the company recognized non-cash impairment of $78.1 million primarily associated with several trademarks in the Residential Kitchen Equipment Group in conjunction with diminution of values as we assessed recent market conditions and future business plans. See Note 3(f) to the Consolidated Financial Statements for further information on the annual impairment testing.

Current wording

In fiscal 2024, the company recognized non-cash impairment of $5.2 million primarily associated with several trademarks in the Commercial Foodservice Group in conjunction with diminution of values as we assessed recent market conditions and future business plans. In addition, the company recorded an impairment charge of $5.3 million associated with the decline in recoverable value of an equity method investment. In fiscal 2023, the company recognized non-cash impairment of $2.0 million primarily associated with several trademarks in the Commercial Foodservice Group in conjunction with diminution of values as we assessed recent market conditions and future business plans. See Note 3(f) to the Consolidated Financial Statements for further information on the annual impairment testing.

Previous wording

INCOME FROM OPERATIONS. Income from operations increased $21.3 million to $656.2 million in fiscal 2024 from $634.9 million in fiscal 2023. Operating income as a percentage of net sales amounted to 16.9% in 2024 as compared to 15.7% in 2023. During fiscal 2024 and fiscal 2023, operating income included the impairment of intangible assets. Excluding the impairments, the decrease in operating income was primarily related to lower sales volume.

Current wording

Income from continuing operations decreased $8.3 million to $644.1 million in fiscal 2024 from $652.4 million in fiscal 2023. Income from continuing operations as a percentage of net sales amounted to 20.4% in 2024 as compared to 20.1% in 2023. During fiscal 2024 and fiscal 2023, income from continuing operations included the impairment of intangible assets. Excluding the impairments, the decrease in operating income was primarily related to lower sales volume.

Previous wording

Income from operations in 2023 included $254.5 million of non-cash expenses, including $50.4 million of depreciation expense, $75.0 million of intangible amortization related to acquisitions, $78.1 million of impairments of trademarks and $51.0 million of stock based compensation. This compares to $189.3 million of non-cash expenses in the prior year, including $44.6 million of depreciation expense, $86.3 million of intangible amortization related to acquisitions and $58.4 million of stock based compensation costs.

Current wording

Income from continuing operations in 2024 included $139.4 million of non-cash expenses, including $39.8 million of depreciation expense, $57.2 million of intangible amortization related to acquisitions, $10.5 million of impairments and $31.9 million of stock based compensation. This compares to $150 million of non-cash expenses in the prior year, including $36.8 million of depreciation expense, $66.0 million of intangible amortization related to acquisitions, $2.0 million of impairments and $45.2 million of stock based compensation costs.

Previous wording

NON-OPERATING EXPENSES. Interest and deferred financing amortization costs were $92.2 million in fiscal 2024, as compared to $120.3 million in fiscal 2023, reflecting the decrease in net debt levels. Net periodic pension benefit (other than service costs) increased $5.8 million to $14.9 million in fiscal 2024, as compared to $9.1 million in fiscal 2023, 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 expense was $1.5 million in fiscal 2024, as compared to $4.2 million in fiscal 2023 and consists mainly of foreign exchange gains and losses.

Current wording

Interest and deferred financing amortization costs were $93.4 million in fiscal 2024, as compared to $121.1 million in fiscal 2023, reflecting the decrease in net debt levels. Net periodic pension benefit (other than service costs) increased $5.8 million to $14.9 million in fiscal 2024, as compared to $9.0 million in fiscal 2023, related to a decrease in discount rates used to calculate interest costs and an increase in expected return on assets as a result of the higher assets value. Other expense was $0.5 million in fiscal 2024, as compared to $4.3 million in fiscal 2023 and consists mainly of foreign exchange gains and losses.

Previous wording

INCOME TAXES. A tax provision of $118.5 million, at an effective rate of 22.8%, was recorded for fiscal 2023 as compared to $127.8 million at an effective rate of 22.7%, in fiscal 2022. The fiscal 2023 tax provision includes a $7.0 million tax benefit for the finalization of the 2022 tax returns. The fiscal 2022 tax provision included a deferred tax benefit of approximately $13 million associated with legal entity restructuring the company undertook to integrate and simplify the company’s business operations. The effective rates in 2023 and 2022 were higher than the federal tax rate of 21% primarily due to state taxes and foreign tax rate differentials.

Current wording

A tax provision of $145.1 million, at an effective rate of 25.6%, was recorded during fiscal 2024, as compared to $123.1 million at an effective rate of 23.0%, in fiscal 2023. The effective tax rates in 2024 and 2023 were higher than the federal tax rate of 21% primarily due to state taxes and foreign tax rate differentials.

Previous wording

Total cash and cash equivalents increased by $442.0 million to $689.5 million at December 28, 2024 from $247.5 million at December 30, 2023. Total debt amounted to $2.4 billion at December 28, 2024 and December 30, 2023.

Current wording

Total cash and cash equivalents decreased by $416.6 million to $222.2 million at January 3, 2026 from $638.8 million at December 28, 2024. Total debt amounted to $2.2 billion and $2.4 billion at January 3, 2026 and December 28, 2024.

Previous wording

OPERATING ACTIVITIES. Net cash provided by operating activities after changes in assets and liabilities amounted to $686.8 million as compared to $628.8 million in the prior year.

Current wording

Net cash provided by operating activities - continuing operations after changes in assets and liabilities amounted to $564.6 million as compared to $614.5 million in the prior year.

Previous wording

During fiscal 2024, working capital changes contributed to operating cash flows primarily driven by decreased inventory levels of $95.4 million, offset by an increase in prepaid expenses and other assets of $45.5 million, including impacts from the timing of payments and status of over-time revenue contracts, and a decrease in accounts payable of $21.9 million.

Current wording

During fiscal 2025, working capital changes contributed to operating cash flows primarily driven by an increase in accounts payable of $18.1 million, offset by an increase in accounts receivable of $14.5 million and prepaid expenses. including impacts from the timing of payments and status of over-time revenue contracts.

Previous wording

INVESTING ACTIVITIES. During fiscal 2024, net cash used for investing activities amounted to $158.5 million. Cash used to fund acquisitions amounted to $111.7 million. Additionally, $49.3 million was expended, primarily for upgrades of production equipment and manufacturing facilities. Proceeds from the sale of property, plant and equipment amounted to $2.5 million.

Current wording

During fiscal 2025, net cash used for investing activities - continuing operations amounted to $103.8 million. Cash used to fund acquisitions amounted to $32.0 million. Additionally, $70.7 million was expended, primarily for upgrades of production equipment and manufacturing facilities.

Previous wording

FINANCING ACTIVITIES. Net cash flows used for financing activities amounted to $73.8 million in 2024. The company’s borrowing activities during 2024 included $32.8 million of net repayments under its Credit Facility. Additionally, the company repurchased $34.7 million of Middleby common shares during 2024. This was comprised of $18.3 million to repurchase 118,171 shares of Middleby common stock that were surrendered to the company for withholding taxes related to restricted stock vestings and $16.4 million used to repurchase 117,526 shares of its common stock under a repurchase program.

Current wording

Additionally, the company repurchased $723.6 million of Middleby common shares during 2025. This was comprised of $14.0 million to repurchase 83,889 shares of Middleby common stock that were surrendered to the company for withholding taxes related to restricted stock vestings and $709.6 million used to repurchase 4,911,050 shares of its common stock under a repurchase program.

Previous wording

The company's material cash requirements from contractual obligations primarily consist of long-term debt obligations, operating lease obligations, tax obligations and contingent purchase price payments to the sellers that were deferred in conjunction with various acquisitions. See Notes 3, 5 and 7 to the Consolidated Financial Statements for further information.

Current wording

The company's material cash requirements from contractual obligations primarily consist of long-term debt obligations, operating lease obligations, tax obligations and contingent purchase price payments to the sellers that were deferred in conjunction with various acquisitions. See Notes 2, 3, 5 and 7 to the Consolidated Financial Statements for further information.

Previous wording

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and represents the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The company’s contracts can have multiple performance obligations or just a single performance obligation. For contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation using the company’s best estimate of the standalone selling price of each distinct good or service in the contract.

Current wording

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The company’s contracts can have multiple performance obligations or just a single performance obligation. For contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation using the company’s best estimate of the standalone selling price of each distinct good or service in the contract.

Previous wording

Within the Commercial Foodservice Equipment and Residential Foodservice Equipment Groups, the estimated standalone selling price of equipment is based on observable prices. Within the Food Processing Equipment Group, the company estimates the standalone selling price based on expected cost to manufacture the good or complete the service plus an appropriate profit margin.

Current wording

Within the Commercial Foodservice Equipment, the estimated standalone selling price of equipment is based on observable prices. Within the Food Processing Equipment Group, the company estimates the standalone selling price for equipment and services based on expected cost to manufacture the good or complete the service plus an appropriate profit margin. The estimated standalone selling price of aftermarket parts is based on observable prices.

Previous wording

Control may pass to the customer over time or at a point in time. In general, the Commercial Foodservice Equipment and Residential Foodservice Equipment Groups recognize revenue at the point in time control transfers to their customers based on contractual shipping terms. Revenue from equipment sold under our long-term contracts within the Food Processing Equipment group is recognized over time as the equipment is manufactured and assembled. Installation services provided in connection with the delivery of the equipment are also generally recognized as those services are rendered. Over time transfer of control is measured using an appropriate input measure (e.g., costs incurred or direct labor hours incurred in relation to total estimate). These measures include forecasts based on the best information available and therefore reflect the company's judgment to faithfully depict the transfer of the goods.

Current wording

Control may pass to the customer over time or at a point in time. In general, the Commercial Foodservice Equipment Group recognizes revenue at the point in time control transfers to their customers based on contractual shipping terms. Revenue from equipment sold under our long-term contracts within the Food Processing Equipment group is recognized over time as the equipment is manufactured and assembled. Equipment that is highly customized and for which we have a contractual, enforceable right to collect payment upon customer cancellation for performance completed to date qualifies for over time revenue recognition. With control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. Installation services provided in connection with the delivery of the equipment are also generally recognized as those services are rendered. We generally use the cost-to-cost input method of progress for our contracts because it best depicts the transfer of control to the customer that occurs as we incur costs.

Previous wording

Inventories are stated at the lower of cost or net realizable value using the first-in, first-out method for the majority of the company’s inventories. The company evaluates the need to record valuation adjustments for inventory on a regular basis. The company’s policy is to evaluate all inventories including raw material, work-in-process, finished goods, and spare parts. Inventory in excess of estimated usage requirements is written down to its estimated net realizable value. Inherent in the estimates of net realizable value are estimates related to our future manufacturing schedules, customer demand, possible alternative uses, and ultimate realization of potentially excess inventory.

Current wording

Inventories are stated at the lower of cost or net realizable value using the first-in, first-out method for the majority of the company’s inventories. The company evaluates the need to record valuation adjustments for inventory on a regular basis. The company’s policy is to evaluate all inventories including raw material, work-in-process, and finished goods. Inventory in excess of estimated usage requirements is written down to its estimated net realizable value. Inherent in the estimates of net realizable value are estimates related to our future manufacturing schedules, customer demand, possible alternative uses, and ultimate realization of potentially excess inventory.

Previous wording

The reporting units at which we test goodwill for impairment are our operating segments. These consist of the Commercial Foodservice Equipment Group, the Food Processing Equipment Group and the Residential Kitchen Equipment Group. If the fair value is less than its carrying value, an impairment loss, if any, is recorded for the difference between the implied fair value and the carrying value of goodwill.

Current wording

The reporting units at which we test goodwill for impairment are our operating segments: the Commercial Foodservice Equipment Group and the Food Processing Equipment Group. If the fair value is less than its carrying value, an impairment loss, if any, is recorded for the difference between the implied fair value and the carrying value of goodwill.

Previous wording

In performing a quantitative assessment, if required, the company estimates each reporting unit's fair value under an income approach using a discounted cash flow model. The income approach uses each reporting unit's projection of estimated operating results and cash flows that are discounted using a market participant discount rate based on a weighted-average cost of capital. The financial projections reflect management's best estimate of economic and market conditions over the projected period including forecasted revenue growth, operating margins, tax rate, capital expenditures, depreciation, amortization and changes in working capital requirements. Other assumptions include discount rate and terminal growth rate. The estimated fair value of each reporting unit is compared to their respective carrying values.

Current wording

In performing a quantitative assessment, if required, the company estimates each reporting unit's fair value under an income approach using a discounted cash flow model. The income approach uses each reporting unit's projection of estimated operating results and cash flows that are discounted using a market participant discount rate based on a weighted-average cost of capital. The financial projections reflect management's best estimate of economic and market conditions over the projected period including forecasted revenue growth, operating margins, tax rate, capital expenditures, depreciation, amortization and changes in working capital requirements. Other assumptions include discount rate and terminal growth rate. The estimated fair value of each reporting unit is compared to their respective carrying values. Additionally, the company validates the estimates of fair value under the income approach by comparing the fair value estimate using a market approach. A market approach estimates fair value by applying cash flow multiples to the reporting unit's operating performance. The multiples are derived from comparable publicly traded companies with similar operating and investment characteristics of the reporting units. The company considers the implied control premium and conclude whether it is reasonable based on other recent market transactions.

Previous wording

As a result of the qualitative assessment for the other two reporting units, the company determined it is more likely than not that the fair value of our reporting units are greater than the carrying amounts.

Current wording

Based on the qualitative assessment as of September 28, 2025, the company determined it is more likely than not that the fair value of our reporting units are greater than the carrying amounts.

Previous wording

In performing a quantitative assessment of indefinite-life intangible assets other than goodwill, primarily trademarks and trade names, we analyze the variety of events or factors that may impact the fair value of the indefinite-life intangible, including, but not limited to: macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant factors. We estimate the fair value of these intangible assets using the relief-from-royalty method which requires assumptions related to projected revenues from our long-range plans; assumed royalty rates that could be payable if we did not own the trademark; and a discount rate using a market based weighted-average cost of capital. If the estimated fair value of the indefinite-life intangible asset is less than its carrying value, we would recognize an impairment loss.

Current wording

In performing a quantitative assessment of indefinite-life intangible assets other than goodwill, primarily trademarks and trade names, we analyze the variety of events or factors that may impact the fair value of the indefinite-life intangible, including, but not limited to: macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant factors. We estimate the fair value of these intangible assets using the relief-from-royalty method which requires assumptions related to projected revenues from our long-range plans; assumed royalty rates that could be payable if we did not own the trademark or trade name; and a discount rate using a market based weighted-average cost of capital. If the estimated fair value of the indefinite-life intangible asset is less than its carrying value, we would recognize an impairment loss.