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 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.

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 company may not realize all or any of the expected benefits of the spin-off of Midera Food Processing, Inc.; 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

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.

Current wording

In addition to tariffs, the company has been negatively impacted by inflation in wages, logistics, energy, raw materials and component costs, including electronic controls and computer memory. 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

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.

Current wording

Net sales for the three month period ended July 4, 2026 increased by $78.7 million or 9.9% to $875.5 million, as compared to $796.8 million in the three month period ended June 28, 2025. Net sales increased by $23.8 million, or 3.0%, from the fiscal 2025 acquisitions of Frigomeccanica and Oka. Excluding acquisitions, net sales increased $54.9 million, or 6.9%, 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 July 4, 2026 increased net sales by approximately $3.9 million or 0.5%. Excluding the impact of foreign exchange and acquisitions, sales increased 6.4% for the three month period ended July 4, 2026 as compared to the prior year period, including a net sales increase of 8.3% at the Commercial Foodservice Equipment Group and a net sales increase of 1.3% at the Food Processing Equipment Group.

Previous wording

•Net sales of the Commercial Foodservice Equipment Group increased by $52.8 million, or 9.4%, to $615.5 million in the three month period ended April 4, 2026, as compared to $562.7 million in the prior year period. Excluding the impact of foreign exchange, net sales increased $45.3 million, or 8.1%. Domestically, the company realized a sales increase of $34.4 million, or 8.3%, to $448.3 million, as compared to $413.9 million in the prior year period. The increase in domestic sales is related to an inflection in demand and higher volumes. International sales increased $18.4 million, or 12.4%, to $167.2 million, as compared to $148.8 million in the prior year period. Excluding the impact of foreign exchange, the increase in international sales was $10.9 million, or 7.3%. The increase in international sales is related to improved market conditions, primarily in the European markets.

Current wording

•Net sales of the Commercial Foodservice Equipment Group increased by $50.0 million, or 8.6%, to $630.6 million in the three month period ended July 4, 2026, as compared to $580.6 million in the prior year period. Excluding the impact of foreign exchange, net sales increased $48.2 million, or 8.3%. Domestically, the company realized a sales increase of $24.2 million, or 5.9%, to $436.8 million, as compared to $412.6 million in the prior year period. The increase in domestic sales is related to an inflection in demand and higher volumes. International sales increased $25.8 million, or 15.4%, to $193.8 million, as compared to $168.0 million in the prior year period. Excluding the impact of foreign exchange, the increase in international sales was $24.0 million, or 14.3%. The increase in international sales is related to improved market conditions, primarily in European and Latin American markets.

Previous 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.

Current wording

•Net sales of the Food Processing Equipment Group increased by $28.7 million, or 13.3%, to $244.9 million in the three month period ended July 4, 2026, as compared to $216.2 million in the prior year period. Net sales from the acquisitions of Frigomeccanica and Oka accounted for an increase of $23.8 million during the three month period ended July 4, 2026. Excluding the impact of foreign exchange and acquisitions, net sales increased $2.8 million, or 1.3%, at the Food Processing Equipment Group. Domestically, the company realized a sales increase of $0.7 million, or 0.8%, to $126.0 million, as compared to $125.0 million in the prior year period. Excluding acquisitions, the increase in domestic sales was $0.3 million, or 0.2%. The increase in domestic sales is primarily driven by higher sales volumes of bakery and protein products, partially offset by lower sales volumes of snack products. International sales increased $27.7 million, or 30.4%, to $118.9 million, as compared to $91.2 million in the prior year period. Excluding the impact of foreign exchange and acquisitions, the increase in international sales was $2.5 million, or 2.7%. The increase in international sales is primarily related to higher sales volumes of protein and bakery products in the European market, partially offset by fewer projects in the Middle East.

Previous 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.

Current wording

Gross profit increased to $335.1 million in the three month period ended July 4, 2026, as compared to $316.1 million in the prior year period, primarily driven by higher sales volumes. The impact of foreign exchange rates increased gross profit by approximately $1.4 million. The gross margin rate was 38.3% in the three month period ended July 4, 2026, as compared to 39.7% 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 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%.

Current wording

•Gross profit at the Food Processing Equipment Group increased by $5.8 million, or 7.2%, to $86.7 million in thethree month period ended July 4, 2026, as compared to $80.9 million in the prior year period. Gross profit from the acquisitions of Frigomeccanica and Oka increased gross profit by $6.0 million. The impact of foreign exchange rates increased gross profit by approximately $0.6 million. Excluding the impact of foreign exchange rates and acquisitions, gross profit decreased by$0.8 million. The gross profit margin rate decreased to 35.4%, as compared to 37.4% 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 36.6%.

Previous 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.

Current wording

Combined selling, general and administrative expenses increased to $186.6 million in the three month period ended July 4, 2026, as compared to $167.6 million in the three month period ended June 28, 2025. As a percentage of net sales, selling, general and administrative expenses were 21.3% in the three month period ended July 4, 2026 as compared to 21.0% in the three month period ended June 28, 2025.

Previous 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.

Current wording

Selling, general and administrative expenses reflect increased costs of $3.0 million associated with acquisitions, including $0.1 million of intangible amortization expense. Selling, general and administrative expenses reflect increases in combined compensation costs and share-based compensation of $10.3 million and strategic transaction costs of $8.9 million, partially offset by a decrease in professional fees of $2.4 million and a decrease in contingent consideration of $2.3 million. Foreign exchange rates had an unfavorable impact of $1.1 million.

Previous 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.

Current wording

Restructuring expenses were $0.7 million for the three month period ended July 4, 2026 and $0.7 million for the three month period ended June 28, 2025. Restructuring expenses in the three month periods ended July 4, 2026 and June 28, 2025 related primarily to headcount reductions and facility consolidations within the Commercial Foodservice Equipment Group.

Previous 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.

Current wording

Interest and deferred financing amortization costs were $26.0 million in the three month period ended July 4, 2026, as compared to $20.3 million in the prior year period, primarily reflecting the increase in interest rates. Net periodic pension benefit increased $0.8 million to $2.4 million in the three month period ended July 4, 2026, as compared to $1.6 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 $2.2 million in the three month period ended July 4, 2026, as compared to other expense of $2.1 million in the prior year period. The change was primarily driven by income of $2.7 million in the current period related to the change in fair value of the note receivable.

Previous 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.

Current wording

A tax provision of $43.3 million, at an effective rate of 34.2%, was recorded during the three month period ended July 4, 2026, as compared to a tax provision of $25.4 million at an effective rate of 20.0% in the prior year period. During the three month period ended July 4, 2026, the effective tax rate was higher than the prior year period primarily due to discrete tax items related to certain internal restructurings associated with the Spin-off and other foreign discrete tax items. The effective tax rate was higher than the U.S. statutory tax rate of 21.0% primarily due to non-deductible expenses, state taxes and foreign rate differentials.

Previous wording

(Loss)/Earnings from Discontinued Operations, Net of Tax

Current wording

Earnings from discontinued operations, net of tax, were $0.6 million in the three month period ended July 4, 2026, as compared to $4.3 million in the three month period ended June 28, 2025. Prior year results include activity for the entire Residential Kitchen Equipment Group, whereas current period results only include activity associated with limited distribution operations in certain international locations that have not yet transferred to Composition Brands as of July 4, 2026. See Note 9 to the Condensed Consolidated Financial Statements for further details.

Previous wording

Loss from discontinued operations, net of tax, was$135.4 million in the three month period ended April 4, 2026, as compared to earnings from discontinued operations, net of tax, of$7.3 million in the three month period ended March 29, 2025. During thethree month period ended April 4, 2026, the company recorded a pre-tax loss on disposition of $94.9 million. Prior year results include activity for the full reporting period, whereas current period results only include activity through the close of the Residential Transaction on February 2, 2026. See Note 9 to the Condensed Consolidated Financial Statements for further details.

Current wording

Loss from discontinued operations, net of tax, was$134.8 million in the six month period ended July 4, 2026, as compared to earnings from discontinued operations, net of tax, of$11.6 million in the six month period ended June 28, 2025. During thesix month period ended July 4, 2026, the company recorded a pre-tax loss on disposition of $94.9 million. Prior year results include activity for the full reporting period, whereas current period results only include activity through the close of the Residential Transaction on February 2, 2026 and limited distribution operations in certain international locations that have not yet transferred to Composition Brands as of July 4, 2026. See Note 9 to the Condensed Consolidated Financial Statements for further details.

Previous 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.

Current wording

Total cash and cash equivalents decreased by $63.0 million to $159.2 million at July 4, 2026 from $222.2 million at January 3, 2026. Total debt decreased to $2.0 billion at July 4, 2026 from $2.2 billion at January 3, 2026.

Previous 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.

Current wording

Net cash provided by operating activities - continuing operations after changes in assets and liabilities amounted to $187.5 million as compared to $229.0 million in the prior year. During the six month period ended July 4, 2026, working capital changes impacted operating cash flows primarily driven by increased inventory levels of $51.7 million due to increased sales and inflationary increases in costs, an increase in prepaid expenses and other assets of $38.4 million due to impacts from the timing of tax payments and status of over-time revenue contracts, an increase in accounts receivable of $32.2 million due to higher sales volumes, an increase in accounts payable of $19.8 million and a decrease of $41.6 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

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.

Current wording

During the six month period ended July 4, 2026, net cash provided by investing activities - continuing operations amounted to $544.9 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 $1.1 million, which included payment of $0.9 million for the finalization of the working capital provision provided by the purchase agreement for a prior year acquisition. Additionally, $18.6 million was expended, primarilyto upgrade production equipment, manufacturing facilities, and investments in innovation centers.

Previous 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.

Current wording

Net cash flows used for financing activities amounted to $787.5 million during the six month period ended July 4, 2026. The company’s borrowing activities during 2026 included $419.1 million of net repayments under its Credit Facility. Additionally, in 2026 the company repurchased $575.8 million of Middleby common stock shares. This was comprised of $565.9 million used to repurchase 3,793,467 shares of its common stock under a repurchase program and $9.9 million to repurchase 62,107 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 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.

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, pension 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.