Elgin Area Chamber Of Commerce: The Middleby Corporation Reports Fourth Quarter Results

Press release from the Elgin Area Chamber of Commerce:

February 23, 2022

The Middleby Corporation Reports Fourth Quarter Results

Elgin, Ill, February 22, 2022 - 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 2021 fourth quarter of $102.7 million or $1.80 diluted earnings per share on net sales of $866.4 million. Adjusted net earnings were $117.1 million or $2.11 adjusted diluted earnings per share. A full reconciliation between GAAP and non-GAAP measures is provided at the end of the press release.

“We concluded 2021 building upon our positive momentum. We finished the year with record sales and earnings at each of our three business segments, returning us to our track record of consistent growth. We also made great strides positioning us for the future by making critical investments in technology and rapidly evolving our sales processes. We are in exciting times, with dynamic shifts in the industries we serve – we are well positioned for the future,” said Tim FitzGerald, CEO of The Middleby Corporation.

“In 2021, we continued to execute upon our long-standing acquisition strategy, strengthening our three industry-leading segments. We concluded the year with the additions of Kamado Joe, Masterbuilt and Char-Griller, further expanding our residential equipment business and significantly increasing our presence in the outdoor category,” Mr. FitzGerald further added. “We are proud of the many accomplishments this year as we navigated the significant operational challenges from supply chain disruption due to the continuing effects of COVID. I want to thank our Middleby team across the company for their tremendous efforts and delivering the achievements of 2021.”

2021 Fourth Quarter Financial Results
 Net sales increased 18.8% in the fourth quarter over the comparative prior year period. Excluding the impacts of acquisitions, a disposition and foreign exchange rates, sales increased 12.6% in the fourth quarter over the comparative prior year period, reflecting improvements in market conditions and consumer demand since the initial impact of COVID-19.
• Organic net sales (a non-GAAP measure) increases were reported for all segments due to improvements in market conditions and consumer demand in the fourth quarter of 2021. A reconciliation of reported net sales by segment is as follows:
Commercial Foodservice Residential Kitchen Food Processing Total Company Reported Net Sales Growth 24.0 % 16.3 % 4.0 % 18.8 % Acquisitions/(Disposition) 5.9 % 11.6 % — % 6.2 % Foreign Exchange Rates (0.2) % 0.7 % (0.7) % (0.1) % Organic Net Sales Growth (1) (2) 18.4 % 4.1 % 4.7 % 12.6 % (1) Organic net sales growth defined as total sales growth excluding impact of acquisitions, a disposition and foreign exchange rates (2) Totals may be impacted by rounding
• Total backlog at the end of the fourth quarter of 2021 amounted to a record level of $1.4 billion, excluding the fourth quarter acquisitions as compared $1.2 billion at the end of the third quarter and $522.7 million at the end of the fiscal 2020. The increase was driven by order growth, primarily at the Commercial Foodservice Group and Residential Kitchen Group, amounting to backlog levels in excess of 100% over the prior year end when excluding backlog from businesses acquired during the year.
• Adjusted EBITDA (a non-GAAP measure) was $193.0 million, in the fourth quarter of 2021 due to the impact of higher sales volumes and profitability initiatives. 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 25.7 % 19.2 % 23.7 % 22.3 % Acquisitions (0.3) % (1.6) % — % (0.5) % Foreign Exchange Rates — % — % — % — % Organic Adjusted EBITDA (1) (2) 26.0 % 20.8 % 23.7 % 22.8 % (1) Organic Adjusted EBITDA defined as Adjusted EBITDA excluding impact of acquisitions and foreign exchange rates. (2) Totals may be impacted by rounding
• The fourth quarter earnings and adjusted EBITDA were negatively impacted by the grill acquisitions completed in the final week of fiscal 2021, including the third-party costs associated with executing the transactions. The impact on adjusted diluted earnings per share was $0.04.
 Operating cash inflows during the fourth quarter amounted to $77.4 million in comparison to $208.6 million in the prior year period. The total leverage ratio per our credit agreements was 2.8x. The trailing twelve month bank agreement pro-forma EBITDA was $823.2 million.
• Cash balances at the end of the quarter were $180.4 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 $2.3 billion as compared to $1.6 billion at the end of fiscal 2020. Additionally, our current borrowing availability is approximately $2.2 billion.

We continued to realize strong order demand across all three segments, and we are carrying a record backlog exiting 2021. While we continue to implement our long-term growth strategies, we remain heavily focused on meeting existing customer demand and managing operational challenges driven by supply chain limitations and disruptions. As we enter 2022, we have made investments in inventory, people, fabrication equipment, and facilities, in a concerted effort to support our backlog and pipeline of developing business opportunities. We are experiencing further increases in material, labor, and shipping costs as inflationary pressures persist. This has led to proactive price increases for our customers, offsetting these significant cost pressures. We are actively managing the margin impact on our business in the near-term and remain committed to progressing our long-term profitability goals in 2022,” concluded Mr. FitzGerald.

The Middleby Corporation Reports Fourth Quarter Results

Elgin, Ill, February 22, 2022 - 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 2021 fourth quarter of $102.7 million or $1.80 diluted earnings per share on net sales of $866.4 million. Adjusted net earnings were $117.1 million or $2.11 adjusted diluted earnings per share. A full reconciliation between GAAP and non-GAAP measures is provided at the end of the press release.

“We concluded 2021 building upon our positive momentum. We finished the year with record sales and earnings at each of our three business segments, returning us to our track record of consistent growth. We also made great strides positioning us for the future by making critical investments in technology and rapidly evolving our sales processes. We are in exciting times, with dynamic shifts in the industries we serve – we are well positioned for the future,” said Tim FitzGerald, CEO of The Middleby Corporation.

“In 2021, we continued to execute upon our long-standing acquisition strategy, strengthening our three industry-leading segments. We concluded the year with the additions of Kamado Joe, Masterbuilt and Char-Griller, further expanding our residential equipment business and significantly increasing our presence in the outdoor category,” Mr. FitzGerald further added. “We are proud of the many accomplishments this year as we navigated the significant operational challenges from supply chain disruption due to the continuing effects of COVID. I want to thank our Middleby team across the company for their tremendous efforts and delivering the achievements of 2021.”

2021 Fourth Quarter Financial Results
 Net sales increased 18.8% in the fourth quarter over the comparative prior year period. Excluding the impacts of acquisitions, a disposition and foreign exchange rates, sales increased 12.6% in the fourth quarter over the comparative prior year period, reflecting improvements in market conditions and consumer demand since the initial impact of COVID-19.
• Organic net sales (a non-GAAP measure) increases were reported for all segments due to improvements in market conditions and consumer demand in the fourth quarter of 2021. A reconciliation of reported net sales by segment is as follows:
Commercial Foodservice Residential Kitchen Food Processing Total Company Reported Net Sales Growth 24.0 % 16.3 % 4.0 % 18.8 % Acquisitions/(Disposition) 5.9 % 11.6 % — % 6.2 % Foreign Exchange Rates (0.2) % 0.7 % (0.7) % (0.1) % Organic Net Sales Growth (1) (2) 18.4 % 4.1 % 4.7 % 12.6 % (1) Organic net sales growth defined as total sales growth excluding impact of acquisitions, a disposition and foreign exchange rates (2) Totals may be impacted by rounding
• Total backlog at the end of the fourth quarter of 2021 amounted to a record level of $1.4 billion, excluding the fourth quarter acquisitions as compared $1.2 billion at the end of the third quarter and $522.7 million at the end of the fiscal 2020. The increase was driven by order growth, primarily at the Commercial Foodservice Group and Residential Kitchen Group, amounting to backlog levels in excess of 100% over the prior year end when excluding backlog from businesses acquired during the year.
• Adjusted EBITDA (a non-GAAP measure) was $193.0 million, in the fourth quarter of 2021 due to the impact of higher sales volumes and profitability initiatives. 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 25.7 % 19.2 % 23.7 % 22.3 % Acquisitions (0.3) % (1.6) % — % (0.5) % Foreign Exchange Rates — % — % — % — % Organic Adjusted EBITDA (1) (2) 26.0 % 20.8 % 23.7 % 22.8 % (1) Organic Adjusted EBITDA defined as Adjusted EBITDA excluding impact of acquisitions and foreign exchange rates. (2) Totals may be impacted by rounding
• The fourth quarter earnings and adjusted EBITDA were negatively impacted by the grill acquisitions completed in the final week of fiscal 2021, including the third-party costs associated with executing the transactions. The impact on adjusted diluted earnings per share was $0.04.
 Operating cash inflows during the fourth quarter amounted to $77.4 million in comparison to $208.6 million in the prior year period. The total leverage ratio per our credit agreements was 2.8x. The trailing twelve month bank agreement pro-forma EBITDA was $823.2 million.
• Cash balances at the end of the quarter were $180.4 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 $2.3 billion as compared to $1.6 billion at the end of fiscal 2020. Additionally, our current borrowing availability is approximately $2.2 billion.

We continued to realize strong order demand across all three segments, and we are carrying a record backlog exiting 2021. While we continue to implement our long-term growth strategies, we remain heavily focused on meeting existing customer demand and managing operational challenges driven by supply chain limitations and disruptions. As we enter 2022, we have made investments in inventory, people, fabrication equipment, and facilities, in a concerted effort to support our backlog and pipeline of developing business opportunities. We are experiencing further increases in material, labor, and shipping costs as inflationary pressures persist. This has led to proactive price increases for our customers, offsetting these significant cost pressures. We are actively managing the margin impact on our business in the near-term and remain committed to progressing our long-term profitability goals in 2022,” concluded Mr. FitzGerald.

This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author’s own.