The Middleby Corporation Reports Fourth Quarter Results

March 1, 2021 7:00 AM EST

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ELGIN, Ill.--(BUSINESS WIRE)-- The Middleby Corporation (NASDAQ: MIDD), a leading worldwide manufacturer of equipment for the commercial foodservice, food processing, and residential kitchen industries, today reported net earnings for the 2020 fourth quarter of $51.8 million or $0.94 diluted earnings per share on net sales of $729.3 million. Adjusted net earnings were $89.0 million or $1.62 adjusted diluted earnings per share. A full reconciliation between GAAP and non-GAAP measures is provided at the end the press release.

“While 2020 was a challenging year for our industry and customers, we have been proactive during this time of uncertainty. Our actions in 2020 have positioned Middleby to lead emerging trends and realize growth across all our platforms. We advanced our technology initiatives, expanded our sales capabilities, secured strategic acquisitions, reinforced our supply chain, expanded our global infrastructure, introduced new, innovative products and opened our state-of-the-art Middleby Innovation Kitchens. We have always been an innovative company, but our investments in technology are rapidly accelerating in this changing market. I am proud of our team and the quick and decisive actions taken in 2020, as these contributed to our strong financial performance in the fourth quarter and will carry us into 2021 with momentum. While COVID-19 vaccines are now available to many, safety precautions at our facilities remain in place, as the health and protection of our employees will always be a top priority,” said Tim FitzGerald, CEO of The Middleby Corporation.

2020 Fourth Quarter Financial Results

  • Net sales decreased 7.4% in the fourth quarter over the comparative prior year period. Excluding the impacts of acquisitions and foreign exchange rates, sales decreased 9.3% in the fourth quarter over the comparative prior year period, reflecting the impact of COVID-19.
  • Organic net sales (a non-GAAP measure) declines were reported at the Commercial Foodservice Group due to COVID-19 impacts and challenging market conditions in the fourth quarter of 2020. Residential sales growth in the fourth quarter of 2020 is primarily related to strong consumer demand. A reconciliation of reported net sales by segment is as follows:

 

Commercial
Foodservice

 

Residential
Kitchen

 

Food
Processing

 

Total
Company

Reported Net Sales Growth

(16.4

)

%

 

17.3

%

 

(0.6

)

%

 

(7.4

)

%

Acquisitions

1.7

 

%

 

1.0

%

 

 

%

 

1.3

 

%

Foreign Exchange Rates

0.5

 

%

 

1.4

%

 

(0.2

)

%

 

0.6

 

%

Organic Net Sales Growth (1) (2)

(18.7

)

%

 

14.8

%

 

(0.4

)

%

 

(9.3

)

%

 

(1) Organic net sales growth defined as total sales growth excluding impact of acquisitions and foreign exchange rates

(2) Totals may be impacted by rounding

  • Total backlog at the end of the fiscal 2020 amounted to a record level of $522.7 million as compared to $307.5 million at the end of fiscal 2019. The increase was driven by growth in excess of 60% at the Commercial Foodservice Group and 270% at the Residential Kitchen Group over prior year end when excluding backlog from businesses acquired during the year.
  • Adjusted EBITDA (a non-GAAP measure) was $145.2 million, in the fourth quarter of 2020 due to the impact of lower revenues as a result of COVID-19; however margins at all three segments were strong reflecting focus on cost control and profitability. A reconciliation of organic adjusted EBITDA (a non-GAAP measure) by segment is as follows:

 

Commercial
Foodservice

 

Residential
Kitchen

 

Food
Processing

 

Total
Company

Adjusted EBITDA

22.0

 

%

 

19.4

 

%

 

24.3

%

 

19.9

 

%

Acquisitions

(0.4

)

%

 

(1.0

)

%

 

%

 

(0.4

)

%

Foreign Exchange Rates

 

%

 

0.2

 

%

 

0.5

%

 

0.1

 

%

Organic Adjusted EBITDA (1) (2)

22.4

 

%

 

20.2

 

%

 

23.8

%

 

20.3

 

%

 

 

 

 

 

 

 

 

(1) Organic Adjusted EBITDA defined as Adjusted EBITDA excluding impact of acquisitions and foreign exchange rates

(2) Totals may be impacted by rounding

  • Operating cash inflows during the fourth quarter increased to $208.6 million in comparison to $147.7 million in the prior year period. Operating cash inflows for the twelve months period ended January 2, 2021 increased to $524.8 million in comparison to $377.4 million in the prior year period. The total leverage ratio per our credit agreements was below 3.1x. Our trailing twelve month bank agreement pro-forma EBITDA was $529.0 million.
  • Cash balances at the end of the quarter were $268.1 million. Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2021 fiscal fourth quarter amounted to $1.6 billion as compared to $1.8 billion at the end of fiscal 2019. Additionally, our current borrowing availability is approximately $1.4 billion.

"In Commercial Foodservice, orders have consistently improved since the initial impact of COVID-19. Restaurants continue to gain experience and proficiency as they perfect their procedures for delivery, carry out, drive-through and curbside pickup. Many chain restaurants who had fluid processes in place pre-pandemic have explored ways to shorten wait times, expand cooking throughput and reduce labor needs. Consumer demand has proven resilient and these operator needs continue to provide growth opportunities for our differentiated solutions. There is pent-up demand for indoor dining which has been consistently opening up across the country, as regulated by the states. This is benefiting our casual dining customers,” said Mr. FitzGerald.

“Our focus on innovation is not just equipment -- we are retooling the entire customer experience. Last week we were pleased to announce the official debut of the Middleby Innovation Kitchens in the Dallas area, which will allow us to best serve our customers and partners. The 40,000 square-foot facility has 15 live vignettes and 150 pieces of active Middleby equipment including IoT, automation, an extensive beverage offering, a full brewery and space where our customer can design and test their kitchen equipment and workflow. We believe the timing is right for this type of facility as customers want a hands-on experience as they re-invent their foodservice operations,” commented Mr. FitzGerald.

"At our Residential Kitchen businesses, we are seeing high interest in recently debuted product innovations across the portfolio of our premium brands. Favorable conditions continue in the housing market, with increased remodels and kitchen upgrades due to more time spent in the home. Our virtual sales experience and showroom tours have been in high demand. We plan to further the 2021 investments in this segment with the completion and opening of our Dallas showroom, targeted digital marketing initiatives and deeper engagement with the designer community.”

“At the Food Processing Group, travel restrictions continue to be a significant challenge with customer demonstrations and installations. Despite this, backlog levels remain strong along with customer interest in recent product introductions and full-line solutions. We remain focused on increasing our presence in fast-growing segments, such as cured meats and alternative protein. We are also positioned to support our customers growing requirements for automation solutions to address labor availability and increased employee safety concerns,” Mr. FitzGerald concluded.

Conference Call

A conference call will be held at 10 a.m. Central Time on Monday, March 1 and can be accessed by dialing (888) 391-6937 or (315) 625-3077 and providing conference code 9682787#. The conference call is also accessible through the Investor Relations section of the company website at www.middleby.com. A replay of the conference call will be available two hours after the conclusion of the call by dialing (855) 859-2056 and entering conference code 9682787#.

To access the supplemental presentation, visit the investors page at www.middleby.com.

Statements in this press release or otherwise attributable to the company regarding the company's business which are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company cautions investors that such statements are estimates of future performance and are highly dependent upon a variety of important factors that could cause actual results to differ materially from such statements. Such factors include variability in financing costs; quarterly variations in operating results; dependence on key customers; international exposure; foreign exchange and political risks affecting international sales; changing market conditions; the impact of competitive products and pricing; the timely development and market acceptance of the company's products; the availability and cost of raw materials; and other risks detailed herein and from time-to-time in the company's SEC filings. Any forward-looking statement speaks only as of the date hereof, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

The Middleby Corporation is a global leader in the foodservice equipment industry. The company develops, manufactures, markets and services a broad line of equipment used in the commercial foodservice, food processing, and residential kitchen equipment industries. The company's leading equipment brands serving the commercial foodservice industry include Anets®, APW Wyott®, Bakers Pride®, Beech®, BKI®, Blodgett®, Blodgett Combi®, Bloomfield®, Britannia®, Carter-Hoffmann®, Celfrost®, Concordia®, CookTek®, Crown®, CTX®, Desmon®, Deutsche Beverage®, Doyon®, Eswood®, EVO®, Firex®, Follett®, frifri®, Giga®, Globe®, Goldstein®, Holman®, Houno®, IMC®, Induc®, Ink Kegs®, Inline Filling Systems®, Jade®, JoeTap®, Josper®, L2F®, Lang®, Lincat®, MagiKitch'n®, Market Forge®, Marsal®, Middleby Marshall®, MPC®, Nieco®, Nu-Vu®, PerfectFry®, Pitco®, QualServ®, RAM®, Southbend®, Ss Brewtech®, Star®, Starline®, Sveba Dahlen®, Synesso®, Tank®, Taylor®, Thor®, Toastmaster®, TurboChef®, Ultrafryer®, Varimixer®, Wells®, Wild Goose® and Wunder-Bar®. The company’s leading equipment brands serving the food processing industry include Alkar®, Armor Inox®, Auto-Bake®, Baker Thermal Solutions®, Burford®, Cozzini®, CV-Tek®, Danfotech®, Deutsche Process®, Drake®, Glimek®, Hinds-Bock®, Maurer-Atmos®, MP Equipment®, Pacproinc®, RapidPak®, Scanico®, Spooner Vicars®, Stewart Systems®, Thurne® and Ve.Ma.C.®. The company’s leading equipment brands serving the residential kitchen industry include AGA® AGA Cookshop®, Brava®, EVO®, La Cornue®, Leisure Sinks®, Lynx®, Marvel®, Mercury®, Rangemaster®, Rayburn®, Redfyre®, Sedona®, Stanley®, TurboChef®, U-Line® and Viking®.

THE MIDDLEBY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in 000’s, Except Per Share Information)

(Unaudited)

 

 

Three Months Ended

 

Twelve Months Ended

 

4th Qtr, 2020

 

4th Qtr, 2019

 

4th Qtr, 2020

 

4th Qtr, 2019

Net sales

$

729,296

 

 

 

$

787,626

 

 

 

$

2,513,257

 

 

 

$

2,959,446

 

 

Cost of sales

473,313

 

 

 

497,948

 

 

 

1,631,209

 

 

 

1,855,949

 

 

 

 

 

 

 

 

 

 

Gross profit

255,983

 

 

 

289,678

 

 

 

882,048

 

 

 

1,103,497

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

147,317

 

 

 

148,813

 

 

 

531,897

 

 

 

583,697

 

 

Former Chairman and CEO transition costs

 

 

 

 

 

 

 

 

 

10,116

 

 

Restructuring expenses

2,094

 

 

 

3,674

 

 

 

12,375

 

 

 

10,480

 

 

Gain on litigation settlement

 

 

 

(14,839

)

 

 

 

 

 

(14,839

)

 

Gain on sale of plant

(1,982

)

 

 

 

 

 

(1,982

)

 

 

 

 

Impairments

15,327

 

 

 

 

 

 

15,327

 

 

 

 

 

Income from operations

93,227

 

 

 

152,030

 

 

 

324,431

 

 

 

514,043

 

 

 

 

 

 

 

 

 

 

Interest expense and deferred financing amortization, net

22,736

 

 

 

19,275

 

 

 

78,617

 

 

 

82,609

 

 

Net periodic pension benefit (other than service costs & curtailment)

(9,992

)

 

 

(7,039

)

 

 

(39,996

)

 

 

(29,722

)

 

Curtailment loss

14,682

 

 

 

415

 

 

 

14,682

 

 

 

865

 

 

Other (income) expense, net

(343

)

 

 

(1,839

)

 

 

3,071

 

 

 

(2,328

)

 

 

 

 

 

 

 

 

 

Earnings before income taxes

66,144

 

 

 

141,218

 

 

 

268,057

 

 

 

462,619

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

14,307

 

 

 

32,221

 

 

 

60,763

 

 

 

110,379

 

 

 

 

 

 

 

 

 

 

Net earnings

$

51,837

 

 

 

$

108,997

 

 

 

$

207,294

 

 

 

$

352,240

 

 

 

 

 

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.94

 

 

 

$

1.96

 

 

 

$

3.76

 

 

 

$

6.33

 

 

 

 

 

 

 

 

 

 

Diluted

$

0.94

 

 

 

$

1.96

 

 

 

$

3.76

 

 

 

$

6.33

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

55,061

 

 

 

55,663

 

 

 

55,093

 

 

 

55,647

 

 

 

 

 

 

 

 

 

 

Diluted

55,087

 

 

 

55,700

 

 

 

55,136

 

 

 

55,656

 

 

THE MIDDLEBY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in 000’s, Except Per Share Information)

(Unaudited)

 

 

Jan 2, 2021

 

Dec 28, 2019

ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

$

268,103

 

 

$

94,500

 

Accounts receivable, net

363,361

 

 

447,612

 

Inventories, net

540,198

 

 

585,699

 

Prepaid expenses and other

81,049

 

 

61,224

 

Prepaid taxes

17,782

 

 

20,161

 

Total current assets

1,270,493

 

 

1,209,196

 

 

 

 

 

Property, plant and equipment, net

344,482

 

 

352,145

 

Goodwill

1,934,261

 

 

1,849,747

 

Other intangibles, net

1,450,381

 

 

1,443,381

 

Long-term deferred tax assets

76,052

 

 

36,932

 

Other assets

126,805

 

 

110,742

 

 

 

 

 

Total assets

$

5,202,474

 

 

$

5,002,143

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Current maturities of long-term debt

$

22,944

 

 

$

2,894

 

Accounts payable

182,773

 

 

173,693

 

Accrued expenses

494,541

 

 

416,550

 

Total current liabilities

700,258

 

 

593,137

 

 

 

 

 

Long-term debt

1,706,652

 

 

1,870,246

 

Long-term deferred tax liability

147,224

 

 

133,500

 

Accrued pension benefits

469,500

 

 

289,086

 

Other non-current liabilities

202,191

 

 

169,360

 

 

 

 

 

Stockholders' equity

1,976,649

 

 

1,946,814

 

 

 

 

 

Total liabilities and stockholders' equity

$

5,202,474

 

 

$

5,002,143

 

THE MIDDLEBY CORPORATION

NON-GAAP SEGMENT INFORMATION (UNAUDITED)

(Amounts in 000’s, Except Percentages)

 

 

Commercial
Foodservice

 

Residential
Kitchen

 

Food
Processing

 

Total
Company (1)

Three Months Ended January 2, 2021

 

 

 

 

 

 

 

Net sales

$

428,432

 

 

 

$

180,069

 

 

 

$

120,795

 

 

 

$

729,296

 

 

Segment Operating Income

$

66,561

 

 

 

$

25,186

 

 

 

$

20,207

 

 

 

$

93,227

 

 

Operating Income % of net sales

15.5

 

%

 

14.0

 

%

 

16.7

 

%

 

12.8

 

%

 

 

 

 

 

 

 

 

Depreciation

6,201

 

 

 

2,949

 

 

 

1,328

 

 

 

10,583

 

 

Amortization

13,728

 

 

 

2,030

 

 

 

1,825

 

 

 

17,583

 

 

Restructuring expenses

1,008

 

 

 

833

 

 

 

253

 

 

 

2,094

 

 

Facility consolidation related expenses

2,332

 

 

 

 

 

 

350

 

 

 

2,682

 

 

Acquisition related inventory step-up charge

446

 

 

 

 

 

 

 

 

 

446

 

 

Stock compensation

 

 

 

 

 

 

 

 

 

5,191

 

 

Gain on sale of plant

(1,982

)

 

 

 

 

 

 

 

 

(1,982

)

 

Impairments (2)

6,103

 

 

 

3,881

 

 

 

5,343

 

 

 

15,327

 

 

Segment adjusted EBITDA

$

94,397

 

 

 

$

34,879

 

 

 

$

29,306

 

 

 

$

145,151

 

 

Adjusted EBITDA % of net sales

22.0

 

%

 

19.4

 

%

 

24.3

 

%

 

19.9

 

%

 

 

 

 

 

 

 

 

Three Months Ended December 28, 2019

 

 

 

 

 

 

 

Net sales

$

512,545

 

 

 

$

153,604

 

 

 

$

121,477

 

 

 

$

787,626

 

 

Segment Operating Income

$

116,464

 

 

 

$

32,092

 

 

 

$

24,458

 

 

 

$

152,030

 

 

Operating Income % of net sales

22.7

 

%

 

20.9

 

%

 

20.1

 

%

 

19.3

 

%

 

 

 

 

 

 

 

 

Depreciation

5,340

 

 

 

3,045

 

 

 

1,446

 

 

 

9,839

 

 

Amortization

11,387

 

 

 

2,588

 

 

 

1,939

 

 

 

15,914

 

 

Restructuring expenses

3,409

 

 

 

281

 

 

 

(16

)

 

 

3,674

 

 

Facility consolidation related expenses

1,841

 

 

 

2,488

 

 

 

 

 

 

4,329

 

 

Acquisition related inventory step-up charge

66

 

 

 

 

 

 

37

 

 

 

103

 

 

Stock compensation

 

 

 

 

 

 

 

 

 

4,876

 

 

Gain on litigation

 

 

 

(14,839

)

 

 

 

 

 

(14,839

)

 

Segment adjusted EBITDA

$

138,507

 

 

 

$

25,655

 

 

 

$

27,864

 

 

 

$

175,926

 

 

Adjusted EBITDA % of net sales

27.0

 

%

 

16.7

 

%

 

22.9

 

%

 

22.3

 

%

(1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $13.4 million and $16.1 million for the three months ended January 2, 2021 and December 28, 2019, respectively.

(2) Includes impairment of intangible assets, fixed assets, and assets held for sale.

THE MIDDLEBY CORPORATION

NON-GAAP SEGMENT INFORMATION (UNAUDITED)

(Amounts in 000’s, Except Percentages)

 

 

 

 

 

 

 

 

 

Commercial
Foodservice

 

Residential
Kitchen

 

Food
Processing

 

Total
Company (1)

Twelve Months Ended January 2, 2021

 

 

 

 

 

 

 

Net sales

$

1,510,279

 

 

 

$

565,706

 

 

 

$

437,272

 

 

$

2,513,257

 

 

Segment Operating Income

$

239,625

 

 

 

$

67,046

 

 

 

$

78,008

 

 

$

324,431

 

 

Operating Income % of net sales

15.9

 

%

 

11.9

 

%

 

17.8

%

 

12.9

 

%

 

 

 

 

 

 

 

 

Depreciation

21,768

 

 

 

11,691

 

 

 

5,507

 

 

39,086

 

 

Amortization

51,985

 

 

 

9,657

 

 

 

7,319

 

 

68,961

 

 

Restructuring expenses

10,123

 

 

 

1,806

 

 

 

446

 

 

12,375

 

 

Facility consolidation related expenses

3,180

 

 

 

 

 

 

350

 

 

3,530

 

 

Acquisition related inventory step-up charge

2,552

 

 

 

 

 

 

 

 

2,552

 

 

Stock compensation

 

 

 

 

 

 

 

 

19,613

 

 

Gain on sale of plant

(1,982

)

 

 

 

 

 

 

 

(1,982

)

 

Impairments (2)

6,103

 

 

 

3,881

 

 

 

5,343

 

 

15,327

 

 

Segment adjusted EBITDA

$

333,354

 

 

 

$

94,081

 

 

 

$

96,973

 

 

$

483,893

 

 

Adjusted EBITDA % of net sales

22.1

 

%

 

16.6

 

%

 

22.2

%

 

19.3

 

%

 

 

 

 

 

 

 

 

Twelve Months Ended December 28, 2019

 

 

 

 

 

 

 

Net sales

$

1,984,345

 

 

 

$

574,150

 

 

 

$

400,951

 

 

$

2,959,446

 

 

Segment Operating Income

$

429,946

 

 

 

$

89,312

 

 

 

$

68,935

 

 

$

514,043

 

 

Operating Income % of net sales

21.7

 

%

 

15.6

 

%

 

17.2

%

 

17.4

 

%

 

 

 

 

 

 

 

 

Depreciation

21,054

 

 

 

11,742

 

 

 

4,944

 

 

37,852

 

 

Amortization

45,906

 

 

 

9,896

 

 

 

8,162

 

 

63,964

 

 

Restructuring expenses

6,386

 

 

 

3,974

 

 

 

120

 

 

10,480

 

 

Facility consolidation related expenses

2,222

 

 

 

3,440

 

 

 

 

 

5,662

 

 

Acquisition related inventory step-up charge

2,560

 

 

 

 

 

 

223

 

 

2,783

 

 

Stock compensation

 

 

 

 

 

 

 

 

8,133

 

 

Gain on litigation

 

 

 

(14,839

)

 

 

 

 

(14,839

)

 

Former Chairman and CEO transition costs

 

 

 

 

 

 

 

 

10,116

 

 

Segment adjusted EBITDA

$

508,074

 

 

 

$

103,525

 

 

 

$

82,384

 

 

$

638,194

 

 

Adjusted EBITDA % of net sales

25.6

 

%

 

18.0

 

%

 

20.5

%

 

21.6

 

%

(1) Includes corporate and other general company expenses, which impact Segment Adjusted EBITDA, and amounted to $40.5 million and $55.8 million for the twelve months ended January 2, 2021 and December 28, 2019, respectively.

(2) Includes impairment of intangible assets, fixed assets, and assets held for sale.

THE MIDDLEBY CORPORATION

NON-GAAP SEGMENT INFORMATION (UNAUDITED)

(Amounts in 000’s, Except Percentages)

 

 

Three Months Ended

 

4th Qtr, 2020

 

4th Qtr, 2019

 

$

 

Diluted per
share

 

$

 

Diluted per
share

Net earnings

$

51,837

 

 

 

$

0.94

 

 

$

108,997

 

 

 

$

1.96

 

Amortization (1)

19,127

 

 

 

0.35

 

 

16,317

 

 

 

0.29

 

Amortization of discount on convertible notes

5,069

 

 

 

0.09

 

 

 

 

 

 

Restructuring expenses

2,094

 

 

 

0.04

 

 

3,674

 

 

 

0.07

 

Acquisition related inventory step-up charge

446

 

 

 

0.01

 

 

103

 

 

 

 

Facility consolidation related expenses

2,682

 

 

 

0.05

 

 

4,329

 

 

 

0.08

 

Net periodic pension benefit (other than service costs & curtailment)

(9,992

)

 

 

(0.18

)

 

(7,039

)

 

 

(0.13

)

Curtailment loss

14,682

 

 

 

0.27

 

 

415

 

 

 

0.01

 

Gain on sale of plant

(1,982

)

 

 

(0.04

)

 

 

 

 

 

Impairments

15,327

 

 

 

0.28

 

 

 

 

 

 

Gain on litigation settlement

 

 

 

 

 

(14,839

)

 

 

(0.27

)

Income tax effect of pre-tax adjustments

(10,250

)

 

 

(0.19

)

 

(675

)

 

 

(0.01

)

Adjusted net earnings

$

89,040

 

 

 

$

1.62

 

 

$

111,282

 

 

 

$

2.00

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

4th Qtr, 2020

 

4th Qtr, 2019

 

$

 

Diluted per
share

 

$

 

Diluted per
share

Net earnings

$

207,294

 

 

 

$

3.76

 

 

$

352,240

 

 

 

$

6.33

 

Amortization (1)

72,500

 

 

 

1.31

 

 

65,576

 

 

 

1.18

 

Amortization of discount on convertible notes

6,917

 

 

 

0.13

 

 

 

 

 

 

Restructuring expenses

12,375

 

 

 

0.22

 

 

10,480

 

 

 

0.19

 

Acquisition related inventory step-up charge

2,552

 

 

 

0.05

 

 

2,783

 

 

 

0.05

 

Facility consolidation related expenses

3,530

 

 

 

0.06

 

 

5,662

 

 

 

0.10

 

Net periodic pension benefit (other than service costs & curtailment)

(39,996

)

 

 

(0.73

)

 

(29,722

)

 

 

(0.54

)

Curtailment loss

14,682

 

 

 

0.27

 

 

865

 

 

 

0.02

 

Gain on sale of plant

(1,982

)

 

 

(0.04

)

 

 

 

 

 

Impairments

15,327

 

 

 

0.28

 

 

 

 

 

 

Gain on litigation settlement

 

 

 

 

 

(14,839

)

 

 

(0.27

)

Former Chairman & CEO transition costs

 

 

 

 

 

10,116

 

 

 

0.18

 

Income tax effect of pre-tax adjustments

(19,500

)

 

 

(0.35

)

 

(12,170

)

 

 

(0.22

)

Adjusted net earnings

$

273,699

 

 

 

$

4.96

 

 

$

390,991

 

 

 

$

7.02

 

(1) Includes amortization of deferred financing costs and convertible notes issuance costs.

(2) Includes impairment of intangible assets, fixed assets, and assets held for sale.

Three Months Ended

 

Twelve Months Ended

 

4th Qtr, 2020

 

4th Qtr, 2019

 

4th Qtr, 2020

 

4th Qtr, 2019

Net Cash Flows Provided By (Used In):

 

 

 

 

 

 

 

Operating activities

$

208,603

 

 

 

$

147,681

 

 

 

$

524,785

 

 

 

$

377,425

 

 

Investing activities

(53,218

)

 

 

(54,874

)

 

 

(106,757

)

 

 

(327,667

)

 

Financing activities

(117,630

)

 

 

(87,060

)

 

 

(252,468

)

 

 

(25,445

)

 

 

 

 

 

 

 

 

 

Free Cash Flow

 

 

 

 

 

 

 

Cash flow from operating activities

$

208,603

 

 

 

$

147,681

 

 

 

$

524,785

 

 

 

$

377,425

 

 

Less: Capital expenditures, net

(307

)

 

 

(12,790

)

 

 

(20,702

)

 

 

(46,609

)

 

Free cash flow

$

208,296

 

 

 

$

134,891

 

 

 

$

504,083

 

 

 

$

330,816

 

 

NON-GAAP FINANCIAL MEASURES

The company supplements its consolidated financial statements presented on a GAAP basis with this non-GAAP financial information to provide investors with greater insight, increase transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP, and the financial results prepared in accordance with GAAP and reconciliations from these results should be carefully evaluated. In addition, the non-GAAP financial measures included in this press release do not have standard meanings and may vary from similarly titled non-GAAP financial measures used by other companies.

The company believes that organic net sales growth, non-GAAP adjusted segment EBITDA, adjusted net earnings and adjusted diluted per share measures are useful as supplements to its GAAP results of operations to evaluate certain aspects of its operations and financial performance, and its management team primarily focuses on non-GAAP items in evaluating performance for business planning purposes. The Company also believes that these measures assist it with comparing its performance between various reporting periods on a consistent basis, as these measures remove from operating results the impact of items that, in its opinion, do not reflect its core operating performance including, for example, intangibles amortization expense, impairment charges, restructuring expenses, and other charges which management considers to be outside core operating results.

Under GAAP, certain convertible debt instruments that may be settled in cash (or other assets) upon conversion are required to be separately accounted for as liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate. Accordingly, for GAAP purposes the company is required to recognize imputed interest expense on the company’s $747.5 million of convertible senior notes due 2025 that were issued in a private placement in August 2020. The imputed interest rate is 4.7% for the convertible notes due 2025, while the actual coupon interest rate of the notes is 1.0%. The difference between the imputed interest expense and the coupon interest expense is excluded from management’s assessment of the Company’s operating performance because management believes that this non-cash expense is not indicative of its core, ongoing operating performance.

The company believes that free cash flow is an important measure of operating performance because it provides management and investors a measure of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, repaying debt and repurchasing our common stock.

The Company believes that its presentation of these non-GAAP financial measures is useful because it provides investors and securities analysts with the same information that Middleby uses internally for purposes of assessing its core operating performance.

Darcy Bretz, Investor and Public Relations, (847) 429-7756
Bryan Mittelman, Chief Financial Officer, (847) 429-7715

Source: The Middleby Corporation



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