MIDDLEBY Corp

Previous wording

This report contains forward-looking statements subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. The company cautions readers that these projections are based upon future results or events and are highly dependent upon a variety of important factors which could cause such results or events to differ materially from any forward-looking statements which may be deemed to have been made in this report, or which are otherwise made by or on behalf of the company. Such factors include, but are not limited to, the outcome of our strategic review; the possibility that the proposed spin-off of the company’s Food Processing business will not be consummated within the anticipated time period or at all and that the company may not realize all or any of the expected benefits of the spin-off; volatility in earnings resulting from goodwill impairment losses, which may occur irregularly and in varying amounts; variability in financing costs and interest rates; quarterly variations in operating results; dependence on key customers; international exposure; risks associated with the company’s foreign operations, including foreign exchange, tariffs and political risks affecting international sales; unfavorable tax law changes and tax authority rulings; ability to protect trademarks, copyrights and other intellectual property; cybersecurity attacks and other breaches in security; changing market conditions, including inflation; the impact of competitive products and pricing; the impact of announced management and organizational changes; the state of the residential construction, housing and home improvement markets; the state of the credit markets, including mortgages, home equity loans and consumer credit; intense competition in the company's business segments including the impact of both new and established global competitors; the timely development and market acceptance of the company’s products; the availability and cost of raw materials; the company's continued ability to realize profitable growth through the sourcing and completion of strategic acquisitions; and other risks detailed herein and from time-to-time in the company’s SEC filings, including the company’s 2024 Annual Report on Form 10-K. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included in this report are made only as of the date hereof and, except as required by federal securities laws and rules and regulations of the SEC, the company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Current wording

This report contains forward-looking statements subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. The company cautions readers that these projections are based upon future results or events and are highly dependent upon a variety of important factors which could cause such results or events to differ materially from any forward-looking statements which may be deemed to have been made in this report, or which are otherwise made by or on behalf of the company. Such factors include, but are not limited to, the possibility that the proposed spin-off of Midera Food Processing, Inc. will not be consummated within the anticipated time period or at all and that the company may not realize all or any of the expected benefits of the spin-off; volatility in earnings resulting from goodwill and trade name impairment losses, which may occur irregularly and in varying amounts; variability in financing costs and interest rates; quarterly variations in operating results; dependence on key customers; international exposure; risks associated with the company’s foreign operations, including foreign exchange, tariffs and political risks affecting international sales; unfavorable tax law changes and tax authority rulings; ability to protect trademarks, copyrights and other intellectual property; cybersecurity attacks and other breaches in security; changing market conditions, including inflation; the impact of competitive products and pricing; the impact of announced management and organizational changes; the state of the credit markets and consumer credit; intense competition in the company's business segments including the impact of both new and established global competitors; the timely development and market acceptance of the company’s products; the availability and cost of raw materials; the company's continued ability to realize profitable growth through the sourcing and completion of strategic acquisitions; and other risks detailed herein and from time-to-time in the company’s SEC filings, including the company’s 2025 Annual Report on Form 10-K. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included in this report are made only as of the date hereof and, except as required by federal securities laws and rules and regulations of the SEC, the company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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 first half 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.

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 Midera Food Processing, Inc. (the subsidiary of the company which will own and operate the company's Food Processing business), as a new independent publicly traded company, will be distributed to Middleby’s shareholders. As of the date hereof, Middleby is targeting July 6, 2026 for the completion of the separation, 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 Midera Food Processing, Inc. 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 current domestic and international political environment have contributed to uncertainty surrounding the future state of the global economy. Recent significant trade policy and tariff actions by the U.S. government and many other countries are creating significant uncertainty and potential risks for the company. The tariffs imposed to date have increased the cost of certain raw materials and components, and while the company is actively exploring opportunities to mitigate these increased costs, there can be no assurance of the company’s ability to offset the impact of these tariffs, fully or at all. Furthermore, the imposition of retaliatory tariffs from other countries on the company's exported products could negatively affect demand and future sales volumes. The long-term effects of current and future tariffs and any future trade policy changes on the global economy and the industries in which the company operates remain uncertain and could have a material adverse effect on our financial statements in any particular reporting period. Even in light of such headwinds, we remain focused on delivering strong financial results and executing on our long-term strategy and profitability objectives, as well as continuing to identify operational efficiencies in all aspects of our business.

Current wording

The current domestic and international political environment has contributed to uncertainty surrounding the future state of the global economy. Recent significant trade policy and tariff actions by the U.S. government and many other countries have created significant uncertainty and potential risks for the company. The tariffs imposed to date have increased the cost of certain raw materials and components, and while the company is actively exploring opportunities to mitigate these increased costs, there can be no assurance of the company’s ability to offset the impact of these tariffs fully. Furthermore, the imposition of retaliatory tariffs from other countries on the company's exported products could negatively affect demand and future sales volumes. The long-term effects of current and future tariffs and any future trade policy changes on the global economy and the industries in which the company operates remain uncertain and could have a material adverse effect on our financial statements in any particular reporting period. Even in light of such headwinds, we remain focused on delivering strong financial results and executing on our long-term strategy and profitability objectives, as well as continuing to identify operational efficiencies in all aspects of our business.

Previous 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.

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. 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 following table sets forth certain consolidated statements of earnings items as a percentage of net sales for the periods:

Current wording

The following table sets forth certain items in the Condensed Consolidated Statements of Comprehensive Income as a percentage of net sales for the periods presented:

Previous wording

NET SALES. Net sales for the three months period ended September 27, 2025 increased by $39.3 million or 4.2% to $982.1 million, as compared to $942.8 million in the three months period ended September 28, 2024. Net sales increased by $30.8 million, or 3.3%, from the fiscal 2024 acquisitions of Emery Thompson, JC Ford, and Gorreri and the fiscal 2025 acquisitions of Frigomeccanica and Oka. Excluding acquisitions, net sales increased $8.5 million, or 0.9%, 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 27, 2025 increased net sales by approximately $9.8 million or 1.0%. Excluding the impact of foreign exchange and acquisitions, sales decreased 0.1% for the three months period ended September 27, 2025 as compared to the prior year period, including a net sales increase of 1.6% at the Commercial Foodservice Equipment Group, a net sales decrease of 5.6% at the Food Processing Equipment Group and a net sales decrease of 0.6% at the Residential Kitchen Equipment Group.

Current wording

2025 acquisitions of Frigomeccanica and Oka. Excluding acquisitions, net sales increased $101.8 million, or 13.9%, from the prior year period. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars for the three month period ended April 4, 2026 increased net sales by approximately $14.6 million or 2.0%. Excluding the impact of foreign exchange and acquisitions, sales increased 11.9% for the three month period ended April 4, 2026 as compared to the prior year period, including a net sales increase of 8.1% at the Commercial Foodservice Equipment Group and a net sales increase of 25.0% at the Food Processing Equipment Group.

Previous wording

•Net sales of the Food Processing Equipment Group increased by $23.4 million, or 13.2%, to $201.3 million in the three months period ended September 27, 2025, as compared to $177.9 million in the prior year period. Net sales from the acquisitions of JC Ford, Gorreri, Frigomeccanica and Oka, accounted for an increase of $29.1 million during the three months period ended September 27, 2025. Excluding the impact of foreign exchange and acquisitions, net sales decreased $9.9 million, or 5.6%, at the Food Processing Equipment Group. Domestically, the company realized a sales increase of $16.3 million, or 15.6%, to $120.8 million, as compared to $104.5 million in the prior year period. Excluding acquisitions, the increase in domestic sales was $1.0 million, or 1.0%. The increase in domestic sales is primarily driven by higher sales volumes of protein products. International sales increased $7.1 million, or 9.7%, to $80.5 million, as compared to $73.4 million in the prior year period. Excluding the impact of foreign exchange and acquisitions, the decrease in international sales was $10.9 million, or 14.9%. The decrease in international sales is primarily related to slower market conditions in the European markets for the sale of protein products and Asian markets for the sale of bakery products.

Current wording

•Net sales of the Food Processing Equipment Group increased by $56.5 million, or 33.7%, to $224.4 million in the three month period ended April 4, 2026, as compared to $167.9 million in the prior year period. Net sales from the acquisitions of Frigomeccanica and Oka accounted for an increase of $7.5 million during the three month period ended April 4, 2026. Excluding the impact of foreign exchange and acquisitions, net sales increased $41.9 million, or 25.0%, at the Food Processing Equipment Group. Domestically, the company realized a sales increase of $21.9 million, or 23.5%, to $115.1 million, as compared to $93.2 million in the prior year period. Excluding acquisitions, the increase in domestic sales was $21.7 million, or 23.3%. The increase in domestic sales is primarily driven by higher sales volumes of protein, bakery and snack products. International sales increased $34.6 million, or 46.3%, to $109.3 million, as compared to $74.7 million in the prior year period. Excluding the impact of foreign exchange and acquisitions, the increase in international sales was $20.2 million, or 27.0%. The increase in international sales is primarily related to improved market conditions in the European and Latin American markets for the sale of protein, bakery and snack products.

Previous wording

GROSS PROFIT. Gross profit increased to $361.3 million in the three months period ended September 27, 2025, as compared to $355.4 million in the prior year period, primarily driven by higher sales volumes. The impact of foreign exchange rates increased gross profit by approximately $3.7 million. The gross margin rate was 36.8% in the three months period ended September 27, 2025, as compared to 37.7% in the prior year period, primarily impacted by tariffs and product mix.

Current wording

Gross profit increased to $323.2 million in the three month period ended April 4, 2026, as compared to $292.6 million in the prior year period, primarily driven by higher sales volumes. The impact of foreign exchange rates increased gross profit by approximately $5.6 million. The gross margin rate was 38.5% in the three month period ended April 4, 2026, as compared to 40.0% in the prior year period, primarily impacted by tariffs, input cost inflation and product mix.

Previous wording

•Gross profit at the Food Processing Equipment Group decreased by $0.2 million, or 0.3%, to $69.0 million in thethree months period ended September 27, 2025, as compared to $69.2 million in the prior year period. Gross profit from the acquisitions of JC Ford, Gorreri, Frigomeccanica and Oka increased gross profit by $6.2 million. The impact of foreign exchange rates increased gross profit by approximately $1.3 million. Excluding the impact of foreign exchange rates and acquisitions, gross profit decreased by$7.7 million. The gross profit margin rate decreased to 34.3%, as compared to 38.9% in the prior year period, primarily related to tariffs and product mix. The gross margin rate, excluding the impact of foreign exchange and acquisitions, was 36.6%.

Current wording

•Gross profit at the Food Processing Equipment Group increased by $16.4 million, or 26.9%, to $77.4 million in thethree month period ended April 4, 2026, as compared to $61.0 million in the prior year period. Gross profit from the acquisitions of Frigomeccanica and Oka increased gross profit by $1.4 million. The impact of foreign exchange rates increased gross profit by approximately $2.6 million. Excluding the impact of foreign exchange rates and acquisitions, gross profit increased by$12.4 million. The gross profit margin rate decreased to 34.5%, as compared to 36.3% in the prior year period, primarily related to tariffs, input cost inflation and product mix. The gross margin rate, excluding the impact of foreign exchange and acquisitions, was 35.0%.

Previous wording

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Combined selling, general and administrative expenses increased to $203.6 million in the three months period ended September 27, 2025, as compared to $179.5 million in the three months period ended September 28, 2024. As a percentage of net sales, selling, general, and administrative expenses were 20.6% in the three months period ended September 27, 2025 as compared to 19.0% in the three months period ended September 28, 2024.

Current wording

Combined selling, general and administrative expenses increased to $188.3 million in the three month period ended April 4, 2026, as compared to $161.8 million in the three month period ended March 29, 2025. As a percentage of net sales, selling, general, and administrative expenses were 22.4% in the three month period ended April 4, 2026 as compared to 22.1% in the three month period ended March 29, 2025.

Previous wording

Selling, general and administrative expenses reflect increased costs of $7.1 million associated with acquisitions, including $1.3 million of intangible amortization expense. Selling, general and administrative expenses reflect increases in strategic transaction costs of $5.9 million, professional fees of $2.5 million, advertising and trade shows of $3.8 million, commissions of $2.0 million, contingent consideration of $1.8 million and travel expenses of $1.7 million; offset by a decrease of $2.9 million in combined compensation costs and share-based compensation. Foreign exchange rates had an unfavorable impact of $2.2 million.

Current wording

Selling, general and administrative expenses reflect increased costs of $3.0 million associated with acquisitions, including $0.5 million of intangible amortization expense. Selling, general and administrative expenses reflect increases in combined compensation costs and share-based compensation of $12.6 million, strategic transaction costs of $6.5 million, professional fees of $1.7 million and commissions of $1.5 million. Foreign exchange rates had an unfavorable impact of $3.7 million.

Previous wording

RESTRUCTURING EXPENSES. Restructuring expenses increased $0.3 million to $2.8 million for the three months period ended September 27, 2025, as compared to $2.5 million for the three months period ended September 28, 2024. Restructuring expenses in the three months period ended September 27, 2025 related primarily to headcount reductions and facility consolidations within the Residential Kitchen Equipment Group. Restructuring expenses in the three months period ended September 28, 2024 related primarily to headcount reductions and facility consolidations within all three segments.

Current wording

Restructuring expenses increased $0.3 million to $1.5 million for the three month period ended April 4, 2026, as compared to $1.2 million for the three month period ended March 29, 2025. Restructuring expenses in the three month period ended April 4, 2026 related primarily to headcount reductions and facility consolidations within the Commercial Foodservice Group. Restructuring expenses in the three month period ended March 29, 2025 related primarily to headcount reductions and facility consolidations within both segments.

Previous wording

NON-OPERATING EXPENSES. Interest and deferred financing amortization costs were $63.4 million in the nine months period ended September 27, 2025, as compared to $72.2 million in the prior year period, primarily reflecting the decrease in interest rates and net debt levels. Net periodic pension benefit decreased $6.5 million to $4.7 million in the nine months period ended September 27, 2025, as compared to $11.2 million in the prior year period related to the increase in discount rate used to calculate the interest cost and decrease in expected return on assets as a result of the lower asset value and slightly lower assumed return on assets than in prior years. Other expense was $7.5 million in the nine months period ended September 27, 2025, as compared to other expense of $1.0 million in the prior year period and consists mainly of foreign exchange gains and losses.

Current wording

Interest and deferred financing amortization costs were $25.5 million in the three month period ended April 4, 2026, as compared to $18.8 million in the prior year period, primarily reflecting the increase in interest rates. Net periodic pension benefit increased $0.9 million to $2.4 million in the three month period ended April 4, 2026, as compared to $1.5 million in the prior year period, primarily due to a decrease in the discount rate used to calculate interest cost in the current year. Other income was $2.6 million in the three month period ended April 4, 2026, as compared to other expense of $1.0 million in the prior year period. The change was primarily driven by income of $1.8 million in the current year related to the change in fair value of the note receivable and $1.5 million of lower net foreign exchange losses.

Previous wording

INCOME TAXES. A tax benefit of $(66.0) million, at an effective rate of 11.4%, was recorded during the three months period ended September 27, 2025, as compared to a tax provision of $40.5 million at an effective rate of 26.2%, in the prior year period. During the three months period ended September 27, 2025, the effective tax rate was less than the prior year period due to a portion of the impairment charges within the Residential Kitchen Equipment Group being non-deductible goodwill. The effective tax rate for thethree months period ended September 27, 2025, when excluding the impairment charges within the Residential Kitchen Equipment Group, was 23.7% and is higher than the U.S. statutory tax rate of 21% primarily due to state taxes and foreign tax rate differentials.

Current wording

A tax provision of $27.6 million, at an effective rate of 24.5%, was recorded during the three month period ended April 4, 2026, as compared to a tax provision of $26.2 million at an effective rate of 23.5%, in the prior year period. During the three month period ended April 4, 2026, the effective tax rate was higher than the prior year period due to an increase in non-deductible expenses. The effective tax rate for thethree month period ended April 4, 2026 was higher than the U.S. statutory tax rate of 21% primarily due to non-deductible expenses, state taxes and foreign tax rate differentials.

Previous wording

Total cash and cash equivalents decreased by $514.4 million to $175.1 million at September 27, 2025 from $689.5 million at December 28, 2024. Total debt decreased to $2.1 billion at September 27, 2025 from $2.4 billion at December 28, 2024.

Current wording

Total cash and cash equivalents decreased by $45.1 million to $177.1 million at April 4, 2026 from $222.2 million at January 3, 2026. Total debt decreased to $1.9 billion at April 4, 2026 from $2.2 billion at January 3, 2026.

Previous wording

OPERATING ACTIVITIES. Net cash provided by operating activities after changes in assets and liabilities amounted to $439.5 million as compared to $447.1 million in the prior year.

Current wording

Net cash provided by operating activities - continuing operations after changes in assets and liabilities amounted to $87.8 million as compared to $137.3 million in the prior year.

Previous wording

During the nine months period ended September 27, 2025, working capital changes impacted operating cash flows primarily driven by increased inventory levels of $32.9 million, an increase in prepaid expenses and other assets of $26.7 million due to impacts from the timing of tax payments and status of over-time revenue contracts, an increase in accounts payable of $28.7 million and an increase of $8.4 million in accrued expenses and other liabilities, including impacts from the timing of payments made for taxes, various customer programs and incentive programs.

Current wording

During the three month period ended April 4, 2026, working capital changes impacted operating cash flows primarily driven by increased inventory levels of $40.6 million due to inflationary increases in costs, an increase in prepaid expenses and other assets of $27.1 million due to impacts from the timing of tax payments and status of over-time revenue contracts, an increase in accounts payable of $10.6 million and an increase of $3.2 million in accrued expenses and other liabilities, including impacts from the timing of payments made for taxes, various customer programs and incentive programs.

Previous wording

INVESTING ACTIVITIES. During the nine months period ended September 27, 2025, net cash used for investing activities amounted to $110.6 million. Cash used to fund acquisitions and investments amounted to $34.5 million. Additionally, $74.9 million was expended, primarilyto upgrade production equipment, manufacturing facilities, and investments in innovation centers.

Current wording

During the three month period ended April 4, 2026, net cash provided by investing activities - continuing operations amounted to $556.5 million. This included $564.6 million in proceeds received from the Residential Transaction, net of cash transferred. Cash used to fund acquisitions and investments amounted to $0.1 million. Additionally, $7.9 million was expended, primarilyto upgrade production equipment, manufacturing facilities, and investments in innovation centers.

Previous wording

FINANCING ACTIVITIES. Net cash flows used for financing activities amounted to $866.0 million during the nine months period ended September 27, 2025. The company’s borrowing activities during 2025 included $865.5 million of net proceeds under its Credit Facility, $449.3 million of net repayments under its Credit Facility and $744.5 million of payments of principal of convertible notes. On August 19, 2025, the company and its lenders entered into an agreement to amend the Credit Facility which, among other things, extended the maturity date of the Credit Agreement from October 21, 2026 to April 28, 2028.

Current wording

Net cash flows used for financing activities amounted to $684.7 million during the three month period ended April 4, 2026. The company’s borrowing activities during 2026 included $297.8 million of net repayments under its Credit Facility.

Previous wording

Additionally, in 2025 the company repurchased $514.3 million of Middleby common stock shares. This was comprised of $13.9 million to repurchase 83,089 shares of Middleby common stock that were surrendered to the company for withholding taxes related to restricted stock vestings and $500.4 million used to repurchase 3,462,088 shares of its common stock under a repurchase program.

Current wording

Additionally, in 2026 the company repurchased $374.8 million of Middleby common stock shares. This was comprised of $365.9 million used to repurchase 2,385,405 shares of its common stock under a repurchase program and $8.9 million to repurchase 56,233 shares of Middleby common stock that were surrendered to the company for withholding taxes related to restricted stock vestings.

Previous wording

Management's discussion and analysis of financial condition and results of operations are based upon the company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the company to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses as well as related disclosures. On an ongoing basis, the company evaluates its estimates and judgments based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions and any such differences could be material to the company's consolidated financial statements. There have been no changes in the company's critical accounting policies, which include revenue recognition, inventories, goodwill and indefinite-life intangibles, convertible debt, pensions benefits, and income taxes, as discussed in the company's Annual Report on Form 10-K for the year ended December 28, 2024 (the “2024 Annual Report on Form 10-K”), except for goodwill and indefinite-lived intangibles as discussed in Note 8 - Goodwill and Note 9 - Intangibles to the Condensed Consolidated Financial Statements.

Current wording

Management's discussion and analysis of financial condition and results of operations are based upon the company's Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the company to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses as well as related disclosures. On an ongoing basis, the company evaluates its estimates and judgments based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions and any such differences could be material to the company's Condensed Consolidated Financial Statements. There have been no changes in the company's critical accounting policies, which include revenue recognition, inventories, goodwill and indefinite-life intangibles, convertible debt, pensions benefits, and income taxes, as discussed in the company's Annual Report on Form 10-K for the year ended January 3, 2026 (the “2025 Annual Report on Form 10-K”), except for the adoption of new critical accounting policies pertaining to equity method investments and note receivables, which were implemented in connection with the Residential Transaction completed during the current year, as discussed in Note 4 to the Condensed Consolidated Financial Statements.