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What changed in MIDDLEBY Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of MIDDLEBY Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+201 added−205 removedSource: 10-K (2024-02-28) vs 10-K (2023-03-01)

Top changes in MIDDLEBY Corp's 2024 10-K

201 paragraphs added · 205 removed · 166 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

45 edited+6 added−8 removed67 unchanged
Biggest changeCommercial Foodservice Equipment Group • September 2021: The company completed its acquisition of all of the capital stock of Imperial Commercial Cooking Equipment ("Imperial"), a manufacturer of ranges, fryers, ovens, countertop equipment, and other specialty cooking products for the commercial kitchen, located in Corona, California. • November 2021: The company completed its acquisition of all of the assets of Gate CFV Solutions, Inc. and Newton CFV, LLC ("Newton CFV"), a business that manufactures and sells valves for beverage dispensing and other applications utilizing patented CFV technology that provides constant pressure, flow and ratio control, located in Sebastian, Florida. • April 2022: The company completed its acquisition of all of the assets of Kloppenberg LLC ("Kloppenberg"), a manufacturer of ice bins, dispensers, carts, and ice transportation systems, located in Englewood, Colorado. • June 2022: The company completed its acquisition of all of the capital stock of Icetro Co., Ltd.
Biggest changeCommercial Foodservice Equipment Group • April 2022: The company completed its acquisition of all of the assets of Kloppenberg LLC ("Kloppenberg"), a manufacturer of ice bins, dispensers, carts, and ice transportation systems, located in Englewood, Colorado. • June 2022: The company completed its acquisition of all of the capital stock of Icetro Co., Ltd.
The company also provides a comprehensive portfolio of complementary food preparation equipment such as tumblers, massagers, grinders, slicers, reduction and emulsion systems, mixers, blenders, formers, battering equipment, breading equipment, seeding equipment, water cutting systems, food presses, food suspension equipment, filling and depositing solutions and forming equipment, as well as a variety of automated loading and unloading systems, automated washing systems, auto-guided vehicles, food safety, food handling, freezing, defrosting and packaging equipment.
The company also provides a comprehensive portfolio of complementary food preparation equipment such as tumblers, massagers, grinders, slicers, reduction and emulsion systems, mixers, blenders, battering equipment, breading equipment, seeding equipment, water cutting systems, food presses, food suspension equipment, filling and depositing solutions and forming equipment, as well as a variety of automated loading and unloading systems, automated washing systems, auto-guided vehicles, food safety, food handling, freezing, defrosting and packaging equipment.
The company strongly believes that business success is a direct correlation of its reputation for fairness and integrity. Accordingly, it is essential that the company’s board members and employees practice the highest standards of conduct and professionalism in any interactions with stakeholders including customers, creditors, stockholders, suppliers and other employees.
The company strongly believes that business success is a direct correlation of its reputation for fairness and integrity. Accordingly, it is essential that the company’s board members and employees practice the highest standards of conduct and professionalism in any interactions with stakeholders including customers, creditors, stockholders, suppliers and other employees. 10
Macro-economic factors such as GDP growth, employment rates, inflation, interest rates and consumer confidence, which impact the overall economy, impact the residential kitchen equipment industry and cause variability in the revenues at this segment. The residential kitchen appliance industry is estimated to be in excess of $260.0 billion worldwide.
Macro-economic factors such as GDP growth, employment rates, inflation, interest rates and consumer confidence, which impact the overall economy, impact the residential kitchen equipment industry and cause variability in the revenues at this segment. The residential kitchen appliance industry is estimated to be in excess of $250.0 billion worldwide.
In industrialized regions, such as Western Europe and the U.S., consumers are demanding more pre-cooked and convenience food products, such as deli tray variety packs, frozen food products and ready-to-eat varieties of ethnic foods. The global food processing equipment industry is highly fragmented, large and growing.
In industrialized regions, such as Western Europe and the U.S., consumers are demanding more pre-cooked and convenience food products, such as deli tray variety packs, frozen food products and ready-to-eat varieties of ethnic foods. The global food processing equipment industry is large and growing.
The products offered by this group include conveyor ovens, combi-ovens, convection ovens, baking ovens, proofing ovens, deck ovens, speed cooking ovens, hydrovection ovens, ranges, fryers, rethermalizers, steam cooking equipment, food warming equipment, catering equipment, heated cabinets, charbroilers, ventless cooking systems, kitchen ventilation, induction cooking equipment, countertop cooking equipment, toasters, griddles, charcoal grills, professional mixers, stainless steel fabrication, custom millwork, professional refrigerators, blast chillers, coldrooms, ice machines, freezers, soft serve ice cream equipment, coffee and beverage dispensing equipment, home and professional craft brewing equipment, fry dispensers, bottle filling and canning equipment, and IoT solutions. 1 Food Processing Equipment Group The Food Processing Equipment Group offers a broad portfolio of processing solutions for customers producing protein products, such as bacon, salami, hot dogs, dinner sausages, poultry and lunchmeats and bakery products, such as muffins, cookies, crackers, pies, bread and buns.
The products offered by this group include conveyor ovens, combi-ovens, convection ovens, baking ovens, proofing ovens, deck ovens, speed cooking ovens, hydrovection ovens, ranges, fryers, rethermalizers, steam cooking equipment, food warming equipment, catering equipment, heated cabinets, charbroilers, ventless cooking systems, kitchen ventilation, induction cooking equipment, countertop cooking equipment, toasters, griddles, charcoal grills, professional mixers, stainless steel fabrication, custom millwork, professional refrigerators, blast chillers, coldrooms, ice machines, freezers, soft serve ice cream equipment, coffee and beverage dispensing equipment, home and professional craft brewing equipment, fry dispensers, bottle filling and canning equipment, IoT solutions and controls development and manufacturing. 1 Food Processing Equipment Group The Food Processing Equipment Group offers a broad portfolio of processing solutions for customers producing protein products, such as bacon, salami, hot dogs, dinner sausages, poultry and lunchmeats and bakery products, such as muffins, cookies, crackers, pastries, bread and buns.
The company estimates demand for food processing equipment is in excess of $55.0 billion worldwide. 4 Residential Kitchen Equipment Industry The company’s end-users include customers with high-end residential kitchens as well as retail dealers of residential cooking equipment.
The company estimates demand for food processing equipment is in excess of $50.0 billion worldwide. 4 Residential Kitchen Equipment Industry The company’s end-users include customers with high-end residential kitchens as well as retail dealers of residential cooking equipment.
Business General The Middleby Corporation, a Delaware corporation (“Middleby” or the “company”), through its operating subsidiary Middleby Marshall Inc., a Delaware corporation (“Middleby Marshall”) and its subsidiaries, is a leader in the design, manufacture, marketing, distribution, and service of a broad line of (i) foodservice equipment used in all types of commercial restaurants and institutional kitchens, (ii) food preparation, cooking, baking, chilling and packaging equipment for food processing operations, and (iii) premium kitchen equipment including ranges, ovens, refrigerators, ventilation, dishwashers and outdoor cooking equipment primarily used in the residential market.
Business General The Middleby Corporation, a Delaware corporation (“Middleby” or the “company”), through its operating subsidiary Middleby Marshall Inc., a Delaware corporation (“Middleby Marshall”) and its subsidiaries, is a leader in the design, manufacture, marketing, distribution, and service of a broad line of (i) foodservice equipment, integrated IoT solutions and universal controllers used in all types of commercial restaurants and institutional kitchens, (ii) food preparation, cooking, baking, chilling and packaging equipment for food processing operations, and (iii) premium kitchen equipment including ranges, ovens, refrigerators, ventilation, dishwashers and outdoor cooking equipment primarily used in the residential market.
A large portion of the company's revenues have been generated from producers of protein products such as bacon, salami, hot dogs, dinner sausages, poultry, lunchmeats and plant based/alternative protein and producers of bakery products, such as muffins, cookies, crackers, pies, bread and buns; however, the company believes that it can leverage its expertise and product development capabilities in thermal processing to organically grow into new end markets and offers unique full processing line solutions.
A large portion of the company's revenues have been generated from producers of protein products such as bacon, salami, hot dogs, dinner sausages, poultry, lunchmeats, sous vide prepared meals and plant based/alternative protein and producers of bakery products, such as muffins, cookies, crackers, pies, bread and buns; however, the company believes that it can leverage its expertise and product development capabilities in thermal processing to organically grow into new end markets and offers unique, automated full processing line solutions.
The company can offer highly integrated full processing line solutions that provide a food processing operation a uniquely integrated solution providing for the highest level of food quality, product consistency, and reduced operating costs resulting from increased product yields, increased capacity, greater throughput and reduced labor costs through automation.
The company can offer highly integrated full processing line solutions that provide a food processing operation with a uniquely integrated solution ensuring the highest level of food quality, product consistency, and reduced operating costs resulting from increased product yields, increased capacity, greater throughput and reduced labor costs through automation.
At its Algona, Iowa facility, the company has a union contract with the United Food and Commercial Workers that expires on December 31, 2026. Management believes that the relationships between employees, unions and management are good. Residential Kitchen Equipment Group As of December 31, 2022, 2,581 persons were employed within the Residential Kitchen Equipment Group.
At its Algona, Iowa facility, the company has a union contract with the United Food and Commercial Workers that expires on December 31, 2026. Management believes that the relationships between employees, unions and management are good. Residential Kitchen Equipment Group As of December 30, 2023, 2,245 persons were employed within the Residential Kitchen Equipment Group.
The company's leading portfolio of trade names of its Commercial Foodservice Equipment Group 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, Globe, Goldstein, Holman, Houno, Hydra Rinse, Icetro, IMC, Imperial, Induc, Inline Filling Systems, Jade, JoeTap, Josper, Kloppenberg, L2F, Lang, Lincat, Marco, MagiKitch’n, Market Forge, Marsal, Meheen, Middleby Marshall, MPC, Newton CFV, Nieco, Nu-Vu, Perfect Fry, Pitco, Powerhouse Dynamics, QualServ, RAM, Southbend, Ss Brewtech, Star, Starline, Sveba Dahlen, Synesso, Tank, Taylor, Thor, Toastmaster, TurboChef, U-Line, Ultrafryer, Varimixer, Wells, Wild Goose Filling and Wunder-Bar.
The company's leading portfolio of trade names of its Commercial Foodservice Equipment Group include Anets, APW Wyott, Bakers Pride, Beech Ovens, BKI, Blodgett, Blodgett Combi, Bloomfield, Blue Sparq, Britannia, Carter-Hoffmann, Celfrost, Concordia, CookTek, Crown, CTX, Desmon, Deutsche Beverage, Doyon, Eswood, EVO, Firex, Flavor Burst, Follett, Frifri, Globe, Goldstein, Holman, Houno, Hydra Rinse, Icetro, IMC, Imperial, Induc, Jade, JoeTap, Josper, Kloppenberg, L2F, Lang, Lincat, Marco, MagiKitch’n, Market Forge, Marsal, Marvel Scientific, Middleby Marshall, Newton CFV, Nieco, Nu-Vu, Perfect Fry, Pitco, Powerhouse Dynamics, QualServ, RAM, Southbend, Ss Brewtech, Star, Starline, Sveba Dahlen, Synesso, Tank, Taylor, Terry, Thor, Toastmaster, TurboChef, U-Line Commercial, Ultrafryer, Varimixer, Wells, Wild Goose Filling and Wunder-Bar.
Included in these totals were 1,070 individuals employed outside of the United States, of which 617 were management, sales, administrative and engineering personnel and 453 were hourly production non-union workers. At its Lodi, Wisconsin facility, the company has a contract with the International Association of Bridge, Structural, Ornamental and Reinforcing Ironworkers that expires on December 31, 2024 .
Included in these totals were 1,094 individuals employed outside of the United States, of which 652 were management, sales, administrative and engineering personnel and 442 were hourly production non-union workers. At its Lodi, Wisconsin facility, the company has a contract with the International Association of Bridge, Structural, Ornamental and Reinforcing Ironworkers that expires on December 31, 2024 .
At its Easton, Pennsylvania facility, the company has a union contract with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union that expires on May 4, 2023. The company also has a union workforce at its manufacturing facility in the Philippines, under a contract that expires on June 30, 2026.
At its Easton, Pennsylvania facility, the company has a union contract with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union that expires on June 15, 2027. The company also has a union workforce at its manufacturing facility in the Philippines, under a contract that expires on June 30, 2026.
This commercial foodservice equipment is marketed under a portfolio of seventy-two brands, including 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, Globe, Goldstein, Holman, Houno, Hydra Rinse, Icetro, IMC, Imperial, Induc, Inline Filling Systems, Jade, JoeTap, Josper, Kloppenberg, L2F, Lang, Lincat, Marco, MagiKitch’n, Market Forge, Marsal, Meheen, Middleby Marshall, MPC, Newton CFV, Nieco, Nu-Vu, Perfect Fry, Pitco, Powerhouse Dynamics, QualServ, RAM, Southbend, Ss Brewtech, Star, Starline, Sveba Dahlen, Synesso, Tank, Taylor, Thor, Toastmaster, TurboChef, U-Line, Ultrafryer, Varimixer, Wells, Wild Goose Filling and Wunder-Bar.
This commercial foodservice equipment is marketed under a portfolio of seventy-three brands, including Anets, APW Wyott, Bakers Pride, Beech Ovens, BKI, Blodgett, Blodgett Combi, Bloomfield, Blue Sparq, Britannia, Carter-Hoffmann, Celfrost, Concordia, CookTek, Crown, CTX, Desmon, Deutsche Beverage, Doyon, Eswood, EVO, Firex, Flavor Burst, Follett, Frifri, Globe, Goldstein, Holman, Houno, Hydra Rinse, Icetro, IMC, Imperial, Induc, Jade, JoeTap, Josper, Kloppenberg, L2F, Lang, Lincat, Marco, MagiKitch’n, Market Forge, Marsal, Marvel Scientific, Middleby Marshall, Newton CFV, Nieco, Nu-Vu, Perfect Fry, Pitco, Powerhouse Dynamics, QualServ, RAM, Southbend, Ss Brewtech, Star, Starline, Sveba Dahlen, Synesso, Tank, Taylor, Terry, Thor, Toastmaster, TurboChef, U-Line Commercial, Ultrafryer, Varimixer, Wells, Wild Goose Filling and Wunder-Bar.
("Colussi"), a leading manufacturer of automated washing solutions, located in Italy. • November 2022: The company completed its acquisition of all of the capital stock of Escher Mixers S.r.l ("Escher"), a leading manufacturer of highly engineered spiral and planetary mixers for the industrial baking industry, located in Italy.
("Colussi"), a leading manufacturer of automated washing solutions, located in Italy. • November 2022: The company completed its acquisition of all of the capital stock of Escher Mixers S.r.l ("Escher"), a leading manufacturer of highly engineered spiral and planetary mixers for the industrial baking industry, located in Italy. • June 2023: The company completed its acquisition of all of the capital stock of Filtration Automation, Inc.
These products are sold and marketed under a portfolio of twenty-three brands, including AGA, AGA Cookshop, Brava, Char-Griller, EVO, Kamado Joe, La Cornue, Leisure Sinks, Lynx, Marvel, Masterbuilt, Mercury, Novy, Rangemaster, Rayburn, Redfyre, Sedona, Ss Brewtech, Stanley, TurboChef, U-Line, Varimixer and Viking.
These products are sold and marketed under a portfolio of twenty-four brands, including AGA, AGA Cookshop, Brava, Char-Griller, EVO, Kamado Joe, La Cornue, Leisure Sinks, Lynx, Marvel, Masterbuilt, Mercury, Novy, Rangemaster, Rayburn, Sedona, Ss Brewtech, Stanley, Synesso, Trade-Wind, TurboChef, U-Line, Varimixer and Viking.
The goal is to create a workplace that enables employees to develop their individual paths toward their career goals and encourages a long-term working relationship with the company. Commercial Foodservice Equipment Group As of December 31, 2022, 6,556 persons were employed within the Commercial Foodservice Equipment Group.
The goal is to create a workplace that enables employees to develop their individual paths toward their career goals and encourages a long-term working relationship with the company. Commercial Foodservice Equipment Group As of December 30, 2023, 6,276 persons were employed within the Commercial Foodservice Equipment Group.
Corporate As of December 31, 2022, 63 persons were employed at the corporate office. 9 Employee Advancement The company believes offering opportunities for career development within the company is integral to building and retaining an outstanding workforce. The company is dedicated to the professional development of all employees.
Corporate As of December 30, 2023, 71 persons were employed at the corporate office. 9 Employee Advancement The company believes offering opportunities for career development within the company is integral to building and retaining an outstanding workforce. The company is dedicated to the professional development of all employees.
At its Windsor, California facility, the company has a union contract with the Sheet Metal Workers International Association that expires on December 31, 2023. At its Elgin, Illinois facility, the company has a union contract with the International Brotherhood of Teamsters that expires on July 31, 2025.
At its Windsor, California facility, the company has a union contract with the Sheet Metal Workers International Association that expires on February 26, 2027. At its Elgin, Illinois facility, the company has a union contract with the International Brotherhood of Teamsters that expires on July 31, 2025.
This food processing equipment is marketed under a portfolio of twenty-six brands, including Alkar, Armor Inox, Auto-Bake, Baker Thermal Solutions, Burford, Colussi Ermes, Cozzini, CV-Tek, Danfotech, Drake, Escher, Glimek, Hinds-Bock, Key-Log, Maurer-Atmos, MP Equipment, Pacproinc, Proxaut, RapidPak, Scanico, Spooner Vicars, Stewart Systems, Sveba Dahlen, Thurne, Ve.Ma.C., and Visionpak.
This food processing equipment is marketed under a portfolio of twenty-eight brands, including Alkar, Armor Inox, Auto-Bake, Baker Thermal Solutions, Burford, Colussi Ermes, Cozzini, CV-Tek, Danfotech, Drake, Escher, Filtration Automation, Glimek, Hinds-Bock, Inline Filling Systems, Key-Log, Maurer-Atmos, MP Equipment, Pacproinc, Proxaut, RapidPak, Scanico, Spooner Vicars, Stewart Systems, Sveba Dahlen, Thurne, Vemac, and VisionPak.
Included in these totals were 2,718 individuals employed outside of the United States, of which 1,374 were management, sales, administrative and engineering personnel, 1,199 were hourly production non-union workers and 145 were hourly production union workers, who participate in an employee cooperative.
Included in these totals were 2,651 individuals employed outside of the United States, of which 1,405 were management, sales, administrative and engineering personnel, 1,108 were hourly production non-union workers and 138 were hourly production union workers, who participate in an employee cooperative.
Of this amount, 1,158 were management, administrative, sales, engineering and supervisory personnel and 1,423 were hourly production workers. Included in these totals were 1,208 individuals employed outside of the United States, of which 567 were management, sales, administrative and engineering personnel and 641 were hourly non-union production workers. Management believes that the relationships between employees and management are good.
Of this amount, 1,107 were management, administrative, sales, engineering and supervisory personnel and 1,138 were hourly production workers. Included in these totals were 1,059 individuals employed outside of the United States, of which 549 were management, sales, administrative and engineering personnel and 510 were hourly non-union production workers. Management believes that the relationships between employees and management are good.
Of this amount, 2,700 were management, administrative, sales, engineering and supervisory personnel; 3,411 were hourly production non-union workers; and 445 were hourly production union members.
Of this amount, 2,695 were management, administrative, sales, engineering and supervisory personnel; 3,173 were hourly production non-union workers; and 408 were hourly production union members.
Human Capital As of December 31, 2022, 11,268 persons were employed by the company and its subsidiaries among the various groups as described below. 6,272 employees are located in the United States and the remaining employees are located outside of the United States. Unionized employees accounted for approximately 5% of the company’s workforce as of December 31, 2022.
Human Capital As of December 30, 2023, 10,722 persons were employed by the company and its subsidiaries among the various groups as described below. 5,918 employees are located in the United States and the remaining employees are located outside of the United States. Unionized employees accounted for approximately 5% of the company’s workforce as of December 30, 2023.
Management believes that the relationships between employees, unions and management are good. Food Processing Equipment Group As of December 31, 2022, 2,068 persons were employed within the Food Processing Equipment Group. Of this amount, 1,080 were management, administrative, sales, engineering and supervisory personnel; 844 were hourly production non-union workers; and 144 were hourly production union members.
Management believes that the relationships between employees, unions and management are good. Food Processing Equipment Group As of December 30, 2023, 2,130 persons were employed within the Food Processing Equipment Group. Of this amount, 1,174 were management, administrative, sales, engineering and supervisory personnel; 842 were hourly production non-union workers; and 114 were hourly production union members.
The company believes that these trademarks and trade names help the company compete in the marketplace due to their recognition with customers, restaurant operators, distribution partners, sales and service agents, and foodservice consultants that specify foodservice equipment.
Trademarks, Patents and Licenses The company has developed, acquired and assembled a leading portfolio of trademarks and trade names. The company believes that these trademarks and trade names help the company compete in the marketplace due to their recognition with customers, restaurant operators, distribution partners, sales and service agents, and foodservice consultants that specify foodservice equipment.
The Commercial Foodservice Equipment Group manufactures its products in twenty-three domestic and twenty international production facilities. The Food Processing Equipment Group manufactures its products in twelve domestic and nine international production facilities. The Residential Kitchen Equipment Group manufactures its products in six domestic and five international production facilities. See Item 2.
The Commercial Foodservice Equipment Group manufactures its products in twenty-four domestic and twenty international production facilities. The Food Processing Equipment Group manufactures its products in thirteen domestic and ten international production facilities. The Residential Kitchen Equipment Group manufactures its products in seven domestic and five international production facilities. See Item 2.
Services and Product Warranty The company is an industry leader in equipment installation programs and after-sales support and service. The company provides a warranty on its products typically for a one-year period and in certain instances greater periods.
The company in certain cases offers incentive based financial programs to invest in local marketing activities with these sales partners. Services and Product Warranty The company is an industry leader in equipment installation programs and after-sales support and service. The company provides a warranty on its products typically for a one-year period and in certain instances greater periods.
("Icetro"), a manufacturer of ice, soft serve and slush machines, located in South Korea. 2 • December 2022: The company completed its acquisition of all the capital stock of Marco Beverage Systems ("Marco"), a leading designer and manufacturer of innovative and energy-efficient beverage dispense solutions, located in Ireland.
("Icetro"), a manufacturer of ice, soft serve and slush machines, located in South Korea. • December 2022: The company completed its acquisition of all the capital stock of Marco Beverage Systems ("Marco"), a leading designer and manufacturer of innovative and energy-efficient beverage dispense solutions, located in Ireland. • January 2023: The company completed its acquisition of all of the outstanding equity securities of Flavor Burst Co., LLP ("Flavor Burst"), an innovative technology used in a variety of flavored beverage and soft serve products, located in Danville, Indiana. 2 • April 2023: The company completed its acquisition of all of the capital stock of Blue Sparq, Inc.
Food processing has quickly become a highly competitive landscape dominated by a few large conglomerates that possess a variety of food brands. The consolidation of food processing plants associated with industry consolidation drives a need for more flexible and efficient equipment that is capable of processing large volumes in quicker cycle times.
The consolidation of food processing plants associated with industry consolidation drives a need for more flexible and efficient equipment that is capable of processing large volumes of consistent quality products in quicker cycle times.
The acquired Proxaut, CP Packaging, Colussi, and Escher businesses accounted for $42.2 million of the backlog. Residential Kitchen Equipment Group The backlog of orders for the Residential Kitchen Equipment Group was $175.0 million at December 31, 2022, all of which is expected to be filled during 2023. The Residential Kitchen Equipment Group's backlog was $443.4 million at January 1, 2022.
Residential Kitchen Equipment Group The backlog of orders for the Residential Kitchen Equipment Group was $112.1 million at December 30, 2023, all of which is expected to be filled during 2024. The Residential Kitchen Equipment Group's backlog was $175.0 million at December 31, 2022. The acquired Trade-Wind business accounted for $1.1 million of the backlog.
Backlog Commercial Foodservice Equipment Group The backlog of orders for the Commercial Foodservice Equipment Group was $754.8 million at December 31, 2022, most all of which is expected to be filled during 2023. The Commercial Foodservice Equipment Group's backlog was $881.9 million at January 1, 2022. The acquired Kloppenberg, Icetro and Marco businesses accounted for $8.8 million of the backlog.
Backlog Commercial Foodservice Equipment Group The backlog of orders for the Commercial Foodservice Equipment Group was $395.2 million at December 30, 2023, most all of which is expected to be filled during 2024. The Commercial Foodservice Equipment Group's backlog was $750.9 million at December 31, 2022.
Acquisition Strategy The company has pursued a strategy to acquire and assemble a leading portfolio of brands and technologies for each of its three business segments. Over the past two years, the company has completed seventeen acquisitions to add to its portfolio of brands and technologies of the Commercial Foodservice Equipment Group and the Residential Kitchen Equipment Group.
Acquisition Strategy The company has pursued a strategy to acquire and assemble a leading portfolio of brands and technologies for each of its three business segments.
The company holds a broad portfolio of patents and licenses covering technology and applications related to various products, equipment and systems. Management believes the expiration of any one of these patents would not have a material adverse effect on the overall operations or profitability of the company.
Management believes the expiration of any one of these patents would not have a material adverse effect on the overall operations or profitability of the company.
Research and Development The company believes its future success will depend in part on its ability to develop new products and to improve existing products.
Certain equipment and accessories are manufactured by other suppliers for sale by the company. The company believes it enjoys good relationships with its suppliers. Research and Development The company believes its future success will depend in part on its ability to develop new products and to improve existing products.
Food Processing Equipment Group The backlog of orders for the Food Processing Equipment Group was $313.2 million at December 31, 2022, which is expected to be filled by the end of fiscal 2024. The Food Processing Equipment Group's backlog was $187.5 million at January 1, 2022.
Food Processing Equipment Group The backlog of orders for the Food Processing Equipment Group was $250.4 million at December 30, 2023, which is expected to be filled by the end of fiscal 2025. The Food Processing Equipment Group's backlog was $317.1 million at December 31, 2022. The acquired Filtration Automation business accounted for less than $0.1 million of the backlog.
The company’s leading portfolio of trade names of its Food Processing Equipment Group include Alkar, Armor Inox, Auto-Bake, Baker Thermal Solutions, Burford, Colussi Ermes, Cozzini, CV-Tek, Danfotech, Drake, Escher, Glimek, Hinds-Bock, Key-Log, Maurer-Atmos, MP Equipment, Pacproinc, Proxaut, RapidPak, Scanico, Spooner Vicars, Stewart Systems, Sveba Dahlen, Thurne, Ve.Ma.C., and Visionpak. 8 The company’s leading portfolio of trade names of its Residential Kitchen Equipment Group include AGA, AGA Cookshop, Brava, Char-Griller, EVO, Kamado Joe, La Cornue, Leisure Sinks, Lynx, Marvel, Masterbuilt, Mercury, Novy, Rangemaster, Rayburn, Redfyre, Sedona, Ss Brewtech, Stanley, TurboChef, U-Line, Varimixer and Viking.
The company’s leading portfolio of trade names of its Food Processing Equipment Group include Alkar, Armor Inox, Auto-Bake, Baker Thermal Solutions, Burford, Colussi Ermes, Cozzini, CV-Tek, Danfotech, Drake, Escher, Filtration Automation, Glimek, Hinds-Bock, Inline Filling Systems, Key-Log, Maurer-Atmos, MP Equipment, Pacproinc, Proxaut, RapidPak, Scanico, Spooner Vicars, Stewart Systems, Sveba Dahlen, Thurne, Vemac, and VisionPak.
All other acquisitions were acquired for an aggregate purchase price totaling $598.4 million, net of cash acquired.
These acquisitions were not individually material and were acquired for an aggregate purchase price totaling $397.5 million, net of cash acquired.
The sales strategy of the company is fostered with Protein and Bakery Innovation Centers in Chicago, Dallas and India, which are available for development with technical performance and product testing for customers. Residential Kitchen Equipment Group The company’s products are marketed through a network of distributors, dealers, designers, select online retailers and home builders to the residential customers.
The sales strategy of the company is fostered by its own food technologists and with Protein and Bakery Innovation Centers in Chicago, Dallas and India, which are available for development with technical performance and product testing for customers.
Marketing support is provided to and coordinated with its network of dealers, designers, and home builders' sales partners to allow for coordinated efforts to market jointly to the end-user customers. The company in certain cases offers incentive based financial programs to invest in local marketing activities with these sales partners.
To supplement the sales and distribution network, the company has invested in Middleby branded residential showrooms in Chicago, New York City, Orange County, California and Dallas. Marketing support is provided to and coordinated with its network of dealers, designers, and home builders' sales partners to allow for coordinated efforts to market jointly to the end-user customers.
The company markets and sells its products to these channels through a company-employed sales force. The company’s products are distributed through a combination of an independent network of distributors and its wholly owned distribution operations.
Residential Kitchen Equipment Group The company’s products are marketed through a network of distributors, dealers, designers, select online retailers and home builders to the residential customers. The company markets and sells its products to these channels through a company-employed sales force.
The company's wholly owned distribution operations include two primary customer support centers and regional logistic warehouse operations, which stock products and service parts for the respective region. To supplement the sales and distribution network, the company has invested in Middleby branded residential showrooms in Chicago, New York City, Orange County, California and Dallas.
The company’s products are distributed through a combination of an independent network of distributors and its wholly owned distribution operations. The company's wholly owned distribution operations include two primary customer support centers and regional logistic warehouse operations, which stock products and service parts for the respective region.
These acquisitions have added fourteen brands to the Middleby portfolio and positioned the company as a leading provider of equipment in each respective industry. Significant acquisitions included Novy and Kamado Joe and Masterbuilt, acquired for a purchase price of $250.9 million and $403.6 million, net of cash acquired, respectively.
Over the past two years, the company has completed eighteen acquisitions to add to its portfolio of brands and technologies of the Commercial Foodservice Equipment Group, Food Processing Equipment Group, and the Residential Kitchen Equipment Group. These acquisitions have added thirteen brands to the Middleby portfolio and positioned the company as a leading provider of equipment in each respective industry.
The backlog is not necessarily indicative of the level of business expected for the year and the growth in backlog represents impacts from COVID-19 pandemic related market conditions and supply chain challenges.
The acquired Flavor Burst and Systems IV businesses accounted for $0.2 million of the backlog. The backlog is not necessarily indicative of the level of business expected for the year.
Removed
Residential Kitchen Equipment Group • July 2021: The company completed its acquisition of all of the capital stock of Novy Invest NV ("Novy"), a leader in cooker hoods and hobs, located in Belgium. • December 2021: The company completed its acquisition of all of the capital stock of A&J Structure Services, LLC ("Char-Griller"), a leader in residential outdoor charcoal and gas cooking products, located in Atlanta, Georgia. • December 2021: The company completed its acquisition of all of the member interests of Masterbuilt Holdings, LLC ("Kamado Joe and Masterbuilt") and their residential outdoor brands Kamado Joe and Masterbuilt, a leader in outdoor residential cooking equipment, located in the Atlanta, Georgia area.
Added
("Blue Sparq"), a custom hardware and software development company also offering manufacturing services, located in Cape Coral, Florida. • July 2023: The company completed its acquisition of all of the capital stock of Systems IV and its subsidiary Terry, LLC ("Systems IV" or "Terry"), a leader in environmentally friendly solutions to eliminate and prevent scale build up associated with water usage in commercial foodservice equipment including steam, ice and beverage products, located in Chandler, Arizona.
Removed
Certain equipment and accessories are manufactured by other suppliers for sale by the company. The company believes it enjoys good relationships with its suppliers. The present sources of supply have been impacted by COVID-19 pandemic market conditions, however, are adequate for the company's present and anticipated future requirements.
Added
("Filtration Automation"), a leading manufacturer of industrial cooking oil filtration machines for the protein, snack, and fish industries, located in Mansfield, Texas.
Removed
As a result of the COVID-19 pandemic, typical patterns of seasonality as previously mentioned were disrupted. Trademarks, Patents and Licenses The company has developed, acquired and assembled a leading portfolio of trademarks and trade names.
Added
Residential Kitchen Equipment Group • July 2023: The company completed its acquisition of all of the capital stock of Trade-Wind Manufacturing, LLC ("Trade-Wind"), a premier manufacturer of ventilation innovation for indoor and outdoor residential use, located in Phoenix, Arizona.
Removed
Cybersecurity Governance The company dedicates significant resources in an effort to secure its confidential information as well as the data and any personal information the company receives and stores about its customers and employees. The company has systems in place designed to securely receive and store that information and to detect, contain, and respond to data security incidents.
Added
Food processing historically was highly fragmented; however has quickly become a highly competitive landscape with the emergence of large conglomerates that possess a variety of food brands.
Removed
The company has a robust information security training and compliance program for all new and existing employees. Training is provided at least annually, with a formal communication cadence of additional components of training being provided throughout the year. The company has not experienced a material cybersecurity or information security breach in the last three years.
Added
To supplement the sales strategy, the company has invested in opening Middleby Innovation Kitchens (the MIK) in Dallas and Spain, which provide chef-driven demonstration and live cooking on over 150 pieces of live Middleby commercial kitchen innovation.
Removed
Oversight responsibility for information security matters is shared by the Board (primarily through the Audit Committee) and senior management. The Audit Committee oversees the company’s cybersecurity and information security program and receives periodic updates (more frequently than annually) from senior management on cybersecurity and information security matters.
Added
The company’s leading portfolio of trade names of its Residential Kitchen Equipment Group include AGA, AGA Cookshop, Brava, Char-Griller, EVO, Kamado Joe, La Cornue, Leisure Sinks, Lynx, Marvel, Masterbuilt, Mercury, Novy, Rangemaster, Rayburn, Sedona, Ss Brewtech, Stanley, Synesso, Trade-Wind, TurboChef, U-Line, Varimixer and Viking. 8 The company holds a broad portfolio of patents and licenses covering technology and applications related to various products, equipment and systems.
Removed
The company maintains a program, overseen by the company’s Chief Financial Officer, that is designed to protect and preserve the confidentiality, integrity and continued availability of all information owned by or in the care of the company.
Removed
The company has implemented a cyber incident response plan that provides controls and procedures for timely and accurate reporting of any material cybersecurity incident. 10

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

33 edited+11 added−10 removed111 unchanged
Biggest changeThe company is subject to currency fluctuations and other risks from its operations outside the United States. The company has manufacturing and distribution operations located in Asia, Europe and Latin America. The company’s operations are subject to the impact of economic downturns, political instability and foreign trade restrictions, which may adversely affect the company’s business, financial condition and operating results.
Biggest changeAdditionally, the company may experience difficulties in scaling its operations due to economic pressures in the U.S. and international markets. The company is subject to currency fluctuations and other risks from its operations outside the United States. The company has manufacturing and distribution operations located in Asia, Europe and Latin America.
The company’s level of indebtedness could have adverse consequences to its business and operations, including the following: • the company may be unable to obtain additional financing for working capital, capital expenditures, product development, acquisitions and other general corporate purposes; • a significant portion of the company’s cash flow from operations must be dedicated to debt service, which reduces the amount of cash the company has available for other purposes; • the company may be more vulnerable in the event of a downturn in the company’s business or general economic and industry conditions and have limited flexibility in planning for, or reacting to, changes in its business and/or industry; • the company may be disadvantaged compared to its competitors that are less leveraged and thereby have greater financial flexibility; and • the company may be restricted in its ability to make strategic acquisitions and to pursue new business opportunities.
The company’s level of indebtedness could have adverse consequences to its business and operations, including the following: • the company may be unable to obtain additional financing for working capital, capital expenditures, product development, acquisitions and other general corporate purposes; 11 • a significant portion of the company’s cash flow from operations must be dedicated to debt service, which reduces the amount of cash the company has available for other purposes; • the company may be more vulnerable in the event of a downturn in the company’s business or general economic and industry conditions and have limited flexibility in planning for, or reacting to, changes in its business and/or industry; • the company may be disadvantaged compared to its competitors that are less leveraged and thereby have greater financial flexibility; and • the company may be restricted in its ability to make strategic acquisitions and to pursue new business opportunities.
If the company’s estimates or the underlying assumptions change in the future, the company may be required to record impairment charges that, if incurred, could have a material adverse effect on the company’s reported net earnings. The company's defined benefit pension plans are subject to financial market risks that could adversely affect the company's results of operations and cash flows.
If the company’s estimates or the underlying assumptions change in the future, the company may be required to record impairment charges that, if incurred, could have a material adverse effect on the company’s reported net earnings. 13 The company's defined benefit pension plans are subject to financial market risks that could adversely affect the company's results of operations and cash flows.
These risk factors should be carefully considered together with the other information in this Annual Report on Form 10-K, including the risks and uncertainties described under the heading Special Note Regarding Forward-Looking Statements . Economic Risks Current and future economic conditions could adversely affect the company’s business and financial performance.
These risk factors should be carefully considered together with the other information in this Annual Report on Form 10-K, including the risks and uncertainties described under the heading Special Note Regarding Forward-Looking Statements . Economic Risks Current and future economic conditions could materially adversely affect the company’s business and financial performance.
The company’s business and financial performance, including collection of its accounts receivable, may be adversely affected by current and future economic conditions that may cause a decline in business and consumer spending, a reduction in the availability of credit and decreased growth of its existing customers, resulting in customers electing to delay the replacement of aging equipment.
The company’s business and financial performance, including collection of its accounts receivable, may be materially adversely affected by current and future economic conditions that may cause a decline in business and consumer spending, a reduction in the availability of credit and decreased growth of its existing customers, resulting in customers electing to delay the replacement of aging equipment.
Environmental laws and regulations are constantly evolving, and it is impossible to accurately predict the effect they may have upon the financial condition, results of operations, or cash flows of the company. We are subject to risks associated with possible climate change legislation, regulation and international accords.
Environmental laws and regulations are constantly evolving, and it is impossible to accurately predict the effect they may have upon the financial condition, results of operations, or cash flows of the company. We are subject to risks associated with climate change legislation, regulation and international accords.
The company’s information systems, or those of its third-party service providers, could also be penetrated by outside parties intent on extracting information, corrupting information or disrupting business processes. Such unauthorized access could disrupt the company’s business, increase costs and/or result in the loss of assets.
The company’s information systems, or those of its third-party service providers, could also be penetrated by outside parties intent on extracting information, corrupting information or disrupting business processes. Such unauthorized access could materially disrupt the company’s business, increase costs and/or result in the loss of assets.
For additional detail related to this risk, see Part II, Item 7A, "Quantitative and Qualitative Disclosure About Market Risk." 13 The company has a significant amount of goodwill and indefinite life intangibles could suffer losses due to asset impairment charges.
For additional detail related to this risk, see Part II, Item 7A, "Quantitative and Qualitative Disclosure About Market Risk." The company has a significant amount of goodwill and indefinite life intangibles could suffer losses due to asset impairment charges.
Unanticipated delays in delivery of raw materials and component inventories by suppliers—including delays due to capacity constraints, labor disputes, impaired financial condition of suppliers, natural disasters, extreme weather patterns and climate change, pandemics or other events outside our control— may increase the company's production costs, cause delays in the shipment of products or impair the ability of the company to satisfy customer demand.
Unanticipated delays in delivery of raw materials and component inventories by suppliers—including delays due to capacity constraints, labor disputes, impaired financial condition of suppliers, natural disasters, extreme weather patterns and climate change, pandemics or other events outside our control— have and may continue to increase the company's production costs, cause delays in the shipment of products or impair the ability of the company to satisfy customer demand.
Approximately 2% of the company's workforce is covered by collective bargaining agreements that expire within one year. Any future strikes, employee slowdowns or similar actions by one or more unions, in connection with labor contract negotiations or otherwise, could have a material adverse effect on the company’s ability to operate the company’s business.
Approximately 1% of the company's workforce is covered by collective bargaining agreements that expire within one year. Any future strikes, employee slowdowns or similar actions by one or more unions, in connection with labor contract negotiations or otherwise, could have a material adverse effect on the company’s ability to operate the company’s business.
The company has union contracts with employees at its facilities in Windsor, California; Algona, Iowa; Elgin, Illinois; Easton, Pennsylvania and Lodi, Wisconsin that extend through December 2023, December 2026, July 2025, May 2023 and December 2024, respectively. The company also has a union workforce at its manufacturing facility in the Philippines under a contract that extends through June 2026.
The company has union contracts with employees at its facilities in Windsor, California; Algona, Iowa; Elgin, Illinois; Easton, Pennsylvania and Lodi, Wisconsin that extend through February 2027, December 2026, July 2025, June 2027 and December 2024, respectively. The company also has a union workforce at its manufacturing facility in the Philippines under a contract that extends through June 2026.
Information technology system failures, including suppliers’ or vendors’ system failures, could disrupt the company’s operations by causing transaction errors, processing inefficiencies, delays or cancellation of customer orders, the loss of customers, impediments to the manufacture or shipment of products, other business disruptions, or the loss of or damage to intellectual property through a security breach.
Information technology system failures, including suppliers’ or vendors’ system failures, have and could in the future disrupt the company’s operations by causing transaction errors, processing inefficiencies, delays or cancellation of customer orders, the loss of customers, impediments to the manufacture or shipment of products, other business disruptions, or the loss of or damage to intellectual property through a security breach.
Because the company has a significant number of workers whose employment is subject to collective bargaining agreements and labor union representation, the company is vulnerable to possible organized work stoppages and similar actions. Unionized employees accounted for approximately 5% of the company’s workforce as of December 31, 2022.
Because the company has a significant number of workers whose employment is subject to collective bargaining agreements and labor union representation, the company is vulnerable to possible organized work stoppages and similar actions. Unionized employees accounted for approximately 5% of the company’s workforce as of December 30, 2023.
The company’s business exposes it to potential liability risks that arise from the manufacturing, marketing and selling of the company’s products. In addition to direct expenditures for damages, settlement and defense costs, there is a possibility of adverse publicity as a result of product liability claims.
Product liability is a significant commercial risk to the company. The company’s business exposes it to potential liability risks that arise from the manufacturing, marketing and selling of the company’s products. In addition to direct expenditures for damages, settlement and defense costs, there is a possibility of adverse publicity as a result of product liability claims.
These risks include: • extensive regulations and oversight, tariffs, including with respect to certain products imported from China or exported to China, retaliatory tariffs by China and certain other countries in response to tariffs implemented by the United States, and other trade barriers; • withdrawal from or renegotiation of international trade agreements and other restrictions on trade between the United States and China, the European Union, Canada, Mexico and other countries; • effects of the United Kingdom's decision to exit the European Union and related potential disruption to trade; • uncertain impact on operations, suppliers and customers related to business disruptions and restrictions due to the COVID-19 pandemic; • reduced protection for intellectual property rights; • difficulties in staffing and managing foreign operations; • potentially adverse tax consequences; • limitations on ownership and on repatriation of earnings; • transportation delays and interruptions; • political, social, and economic instability and disruptions; • labor unrests or shortages; • potential for nationalization of enterprises; and • limitations on the company’s ability to enforce legal rights and remedies.
These risks include: • extensive regulations and oversight, tariffs, including with respect to certain products imported from China or exported to China, retaliatory tariffs by China and certain other countries in response to tariffs implemented by the United States, and other trade barriers; • withdrawal from or renegotiation of international trade agreements and other restrictions on trade between the United States and China, the European Union, Canada, Mexico and other countries; • uncertain impact on operations, suppliers and customers related to business disruptions in international jurisdictions; • reduced protection for intellectual property rights; • difficulties in staffing and managing foreign operations; • potentially adverse tax consequences; • limitations on ownership and on repatriation of earnings; • transportation delays and interruptions; • political, social, and economic instability and disruptions; • labor unrests or shortages; • potential for nationalization of enterprises; and • limitations on the company’s ability to enforce legal rights and remedies.
The company’s balance sheet includes a significant amount of goodwill and indefinite life intangible assets, which represent approximately 35% and 20%, respectively, of its total assets as of December 31, 2022. The excess of the purchase price over the fair value of assets acquired, including identifiable intangible assets, and liabilities assumed in conjunction with acquisitions is recorded as goodwill.
The company’s balance sheet includes a significant amount of goodwill and indefinite life intangible assets, which represent approximately 36% and 19%, respectively, of its total assets as of December 30, 2023. The excess of the purchase price over the fair value of assets acquired, including identifiable intangible assets, and liabilities assumed in conjunction with acquisitions is recorded as goodwill.
The company’s ability to compete successfully will depend, in large part, on its ability to enhance and improve its existing products, to continue to bring innovative products to market in a timely fashion, to adapt the company’s products to the needs and standards of its current and potential customers and to continue to improve operating efficiencies and lower manufacturing costs.
The company’s ability to compete successfully will depend, in large part, on its ability to enhance and improve its existing products, including its energy efficient products and products manufactured through a process designed to reduce emissions, to continue to bring innovative products to market in a timely fashion, to adapt the company’s products to the needs and standards of its current and potential customers and to continue to improve operating efficiencies and lower manufacturing costs.
Although the company believes that the performance and price characteristics of its products will provide competitive solutions for its customers’ needs, there can be no assurance that the company’s customers will continue to choose the company’s products over products offered by its competitors. Further, the markets for the company’s products are characterized by changing technology and evolving industry standards.
Although the company believes that the performance and price characteristics of its products will provide competitive solutions for its customers’ needs, there can be no assurance that the company’s customers will continue to choose the company’s products over products offered by its competitors.
In addition, even if holders do not elect to convert their Convertible Notes in such circumstances, the company could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Convertible Notes as a current rather than long-term liability, which would result in a material reduction in net working capital.
In addition, even if holders do not elect to convert their Convertible Notes in such circumstances, the company could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Convertible Notes as a current rather than long-term liability, which would result in a material reduction in net working capital. 12 The capped call transactions expose the company to counterparty risk and may affect the value of the company's common stock.
A significant increase in the price of steel or any other commodity, due to tariffs or otherwise, would adversely affect the company’s operating results. In addition, we have experienced disruptions to parts of our supply chain as a result of COVID-19.
A significant increase in the price of steel or any other commodity, due to tariffs or otherwise, has and may continue to adversely affect the company’s operating results. In addition, we have experienced and continue to experience disruptions to parts of our supply chain.
The capped call transactions expose the company to counterparty risk and may affect the value of the company's common stock. In connection with the Convertible Notes, the company has entered into and may in the future enter into, capped call transactions with certain financial institutions, referred to as the capped call counterparties.
In connection with the Convertible Notes, the company has entered into and may in the future enter into, capped call transactions with certain financial institutions, referred to as the capped call counterparties.
Governmental requirements directed at regulating greenhouse gas emissions could cause us to incur expenses that we cannot recover or that will require us to increase the price of products we sell, which could impact the demand for those products. Unfavorable tax law changes and tax authority rulings may adversely affect financial results.
Governmental requirements directed at regulating greenhouse gas emissions could cause us to incur expenses that we cannot recover or that will require us to increase the price of products we sell, which could impact the demand for those products.
The spread of COVID-19 and other contagious diseases, or other adverse public health developments, has had a material and adverse effect on our business operations. These effects have included and could continue to include disruptions or restrictions on our ability to travel, as well as temporary closures of our facilities or the facilities of our suppliers or customers.
The spread of contagious diseases or other adverse public health developments, has had a material and adverse effect on our business operations. These effects have included and may in the future include disruptions or restrictions on our ability to travel, temporary closures of our or our customers' facilities and disruptions to our supply chain.
Any disruption of our suppliers' or customers' businesses would likely impact our sales and operating results. The company may be the subject of product liability claims or product recalls, and it may be unable to obtain or maintain insurance adequate to cover potential liabilities. Product liability is a significant commercial risk to the company.
Any disruption of our, our suppliers' or our customers' businesses due to adverse public health developments could have a material impact on our sales and operating results. The company may be the subject of product liability claims or product recalls, and it may be unable to obtain or maintain insurance adequate to cover potential liabilities.
Government mandates, standards or regulations intended to reduce greenhouse gas emissions or projected climate change impacts have resulted in, and are likely to continue resulting in, increased energy, manufacturing, transportation and raw material costs.
In addition, failure to achieve or demonstrate progress towards our climate goals may expose us to liability and reputational harm. Government mandates, standards or regulations intended to reduce greenhouse gas emissions or projected climate change impacts have resulted in, and are likely to continue resulting in, increased energy, manufacturing, transportation and raw material costs.
At December 31, 2022, the company had $2.7 billion of borrowings and $1.9 million in letters of credit outstanding.
At December 30, 2023, the company had $2.4 billion of borrowings and $1.6 million in letters of credit outstanding.
Higher energy costs, rising interest rates, weakness in the residential construction, housing and home improvement markets, financial market volatility, inflation, recession, global hostilities and acts of terrorism may also adversely affect the company’s business and financial performance. Additionally, the company may experience difficulties in scaling its operations due to economic pressures in the U.S. and international markets.
Higher energy costs, fluctuating interest rates, weakness in the residential construction, housing and home improvement markets, financial market volatility, inflation, recession, global hostilities and acts of terrorism have and may in the future also adversely affect the company’s business and financial performance.
Fluctuations in interest rates could adversely affect the company's results of operations and financial position. The company's profitability has been and may continue to be adversely affected during any periods of unexpected or rapid increases in interest rates. The company maintains a revolving credit facility, which, at December 31, 2022, bore interest at 1.625% above LIBOR per annum.
Fluctuations in interest rates could adversely affect the company's results of operations and financial position. The company's profitability has been and may continue to be adversely affected during any periods of unexpected or rapid increases in interest rates.
These restrictive covenants, among others, could negatively affect the company’s ability to finance its future capital needs, engage in other business activities or withstand a future downturn in the company’s business or the economy. 12 Under the company’s current credit agreement, the company is required to maintain certain specified financial ratios and meet financial tests, including certain ratios of secured leverage and interest coverage.
These restrictive covenants, among others, could negatively affect the company’s ability to finance its future capital needs, engage in other business activities or withstand a future downturn in the company’s business or the economy.
As a result, operating margins may also be negatively impacted by worldwide currency fluctuations that result in higher costs for certain cross-border transactions. Business and Operational Risks The COVID-19 pandemic has adversely impacted, and likely will continue to, adversely impact and pose risks to the company, the nature and extent of which are highly uncertain and unpredictable.
As a result, operating margins may also be negatively impacted by worldwide currency fluctuations that result in higher costs for certain cross-border transactions. Business and Operational Risks The company’s level of indebtedness could adversely affect its business, results of operations and growth strategy. The company now has and may continue to have a significant amount of indebtedness.
Any such increased level of investment could adversely affect our financial condition or results of operations. Further, as governmental authorities around the world continue to consider legislative and regulatory proposals concerning data protection, we may face substantial penalties if we fail to comply with regulations and laws regarding data protection.
Further, as governmental authorities around the world continue to consider legislative and regulatory proposals concerning data protection in addition to those already in place, we are and may continue to be subject to substantial penalties if we fail to comply with data protection laws and regulations.
The company anticipates that international sales will continue to account for a significant portion of consolidated net sales in the foreseeable future.
The company’s operations are subject to the impact of economic downturns, political instability and foreign trade restrictions, which may adversely affect the company’s business, financial condition and operating results. The company anticipates that international sales will continue to account for a significant portion of consolidated net sales in the foreseeable future.
If these audits result in assessments different from amounts recorded, future financial results may include unfavorable tax adjustments. The trading price of the company's common stock has been volatile, and investors in the company's common stock may experience substantial losses. The trading price of the company's common stock has been volatile and may become volatile again in the future.
The trading price of the company's common stock has been volatile and may become volatile again in the future.
Removed
The company is monitoring the global outbreak of the COVID-19 pandemic and taking steps to mitigate the risks posed by its spread, including working with its customers, employees, suppliers and other stakeholders. The pandemic has adversely affected, the company's financial results, condition and outlook.
Added
Under the company’s current credit agreement, the company is required to maintain certain specified financial ratios and meet financial tests, including certain ratios of secured leverage and interest coverage.
Removed
Certain elements of the company's business (including its supply chain, distribution systems, production levels and research and development activities) and operations have been negatively impacted due to significant portions of the company's workforce being unable to work effectively due to quarantines, government orders and guidance, facility closures, illness, travel restrictions, implementation of precautionary measures and other restrictions.
Added
The company maintains a revolving credit facility, which, at December 30, 2023, bore interest at 1.625% above Secured Overnight Financing Rate ("SOFR") plus a spread adjustment of 0.10% per annum.
Removed
The company also has experienced, and expects to continue to experience, volatility in demand given disruptions in global health, economic and market conditions, consumer behavior and global restaurant operations.
Added
Further, the markets for the company’s products are characterized by changing technology and evolving industry standards, including a focus on developing and manufacturing energy efficient products in a sustainable way.
Removed
If the pandemic continues and conditions worsen, the company expects to experience additional adverse impacts on operational and commercial activities, costs, customer orders and purchases and collections of accounts receivable, which may be material, and the extent of these exposures remains uncertain even if conditions begin to improve.
Added
Any such increased investment could materially increase our costs and adversely affect our financial condition or results of operations.
Removed
The pandemic has also increased the risk related to the company's ability to ensure business continuity during a potential disruption, including increased cybersecurity attacks related to the work-from-home environment.
Added
Additionally, as discussed further in our 2023 Sustainability Report, accessible at www.middleby.com/sustainability, we have made commitments to reduce the environmental impact of our operations and provide sustainable solutions to our customers, including setting targets for reducing our Greenhouse Gas (“GHG”) emission and consumption of non-renewable resources.
Removed
Furthermore, the pandemic has impacted and may further impact the broader economies of affected countries, including adversely impacting economic growth, the proper functioning of financial and capital markets, foreign currency exchange rates, inflation and interest rates, all of which could continue to negatively impact the company.
Added
There can be no assurance that we will achieve our climate-related goals on the timeline anticipated or at all. Further, future events or circumstances could lead us to prioritize other business interests over progressing toward our current climate goals due to factors such as business strategy, economic conditions, regulatory changes or pressure from stakeholders.
Removed
Due to the global breadth of the pandemic's spread and the range of governmental and community reactions, there is uncertainty around the pandemic's ultimate impact and the timing of recovery.
Added
If we fail or are perceived to fail to progress toward achieving our climate-related goals and commitments or if our investors, customers or other stakeholders become dissatisfied with the level of GHG emissions produced by our production process or our products, we could face adverse publicity, which could have a material adverse impact on our business, financial condition and results of operations Unfavorable tax law changes and tax authority rulings may adversely affect financial results.
Removed
The lingering effects of the pandemic could lead to an extended disruption of economic activity and the impact on the company's consolidated results of operations, financial position and cash flows could be material.
Added
If these audits result in assessments different from amounts recorded, future financial results may include unfavorable tax adjustments. In December 2021, The Organisation for Economic Co-operation and Development ("OECD") issued Pillar II model rules which would establish a global per-country minimum tax of 15%.
Removed
In addition, the continuation or a resurgence of the pandemic could exacerbate the other risk factors. 11 The company’s level of indebtedness could adversely affect its business, results of operations and growth strategy. The company now has and may continue to have a significant amount of indebtedness.
Added
The directive requires the rules to initially become effective for fiscal years starting on or after December 31, 2023.
Removed
Item 1B. Unresolved Staff Comments Not applicable. 21
Added
While it is uncertain whether the United States will enact legislation to adopt Pillar II, numerous countries have enacted legislation, or have indicated their intent to adopt legislation, to implement certain aspects of Pillar II effective January 1, 2024, and the remaining global minimum tax rules by January 1, 2025.
Added
The OECD and implementing countries are expected to continue to make further revisions to their legislation and release additional guidance. 21 The trading price of the company's common stock has been volatile, and investors in the company's common stock may experience substantial losses.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed1 unchanged
Biggest changeThe principal properties of the company used to conduct business operations are listed below: Location Principal Function Square Footage Owned/ Leased Lease Expiration Commercial Foodservice: Fort Smith, AR Manufacturing, Warehousing and Offices 712,600 Leased Jan-26 Brea, CA Manufacturing, Warehousing and Offices 86,600 Leased Sep-26 Corona, CA Manufacturing and Offices 86,000 Owned N/A Vacaville, CA Manufacturing, Warehousing and Offices 128,800 Leased Nov-29 Windsor, CA Manufacturing, Warehousing and Offices 75,000 Leased Apr-32 Englewood, CO Manufacturing, Warehousing and Offices 105,000 Owned N/A Louisville, CO Manufacturing, Warehousing and Offices 37,700 Leased Jul-28 Venice, FL Manufacturing, Warehousing and Offices 23,300 Leased Jun-24 Elgin, IL Manufacturing, Warehousing and Offices 191,200 Owned N/A Mundelein, IL Manufacturing, Warehousing and Offices 70,000 Owned N/A Rockton, IL Manufacturing, Warehousing and Offices 339,400 Owned N/A South Beloit, IL Warehousing 171,700 Leased Mar-24 Menominee, MI Manufacturing, Warehousing and Offices 60,000 Owned N/A Charlotte, NC Manufacturing, Warehousing and Offices 44,000 Leased Feb-24 Fuquay-Varina, NC Manufacturing, Warehousing and Offices 183,900 Owned N/A Bow, NH Manufacturing, Warehousing and Offices 100,000 Owned N/A Pembroke, NH Warehousing 136,200 Leased Jul-24 Dayton, OH Manufacturing, Warehousing and Offices 37,700 Owned N/A Moraine, OH Warehousing 38,300 Leased Jun-27 Tualatin, OR Manufacturing, Warehousing and Offices 29,500 Leased May-28 Easton, PA Manufacturing, Warehousing and Offices 246,700 Owned N/A Smithville, TN Manufacturing, Warehousing and Offices 268,000 Owned N/A Carrollton, TX Manufacturing, Warehousing and Offices 132,400 Leased Aug-32 Essex Junction, VT* Manufacturing, Warehousing and Offices 372,500 Owned N/A Renton, WA Manufacturing, Warehousing and Offices 72,400 Leased Sep-28 New South Wales, Australia Manufacturing, Warehousing and Offices 204,900 Owned N/A Toronto, Canada* Manufacturing, Warehousing and Offices 87,700 Owned N/A Humen, China Manufacturing, Warehousing 6,600 Leased Mar-23 Ningbo, China Manufacturing, Warehousing and Offices 64,300 Leased Oct-25 Qingdao City, China Manufacturing, Warehousing and Offices 113,500 Leased Jul-29 Zhuhai City, China Manufacturing, Warehousing and Offices 104,500 Leased Dec-22 Brøndby, Denmark Manufacturing, Warehousing and Offices 50,900 Owned N/A Randers, Denmark Manufacturing, Warehousing and Offices 50,100 Owned N/A Viljandi, Estonia Manufacturing and Offices 47,000 Owned N/A Dublin, Ireland Manufacturing, Warehousing and Offices 17,100 Leased Sep-24 Nusco, Italy Manufacturing, Warehousing and Offices 260,600 Owned N/A Sedico, Italy Manufacturing, Warehousing and Offices 52,500 Leased Jan-23 Nogales, Mexico Manufacturing, Warehousing and Offices 129,000 Owned N/A Wiślina, Poland Manufacturing, Warehousing and Offices 77,500 Owned N/A Incheon, South Korea Manufacturing, Warehousing and Offices 227,400 Owned N/A Pineda de Mar, Spain Manufacturing, Warehousing and Offices 50,100 Owned N/A Fristad, Sweden Manufacturing, Warehousing and Offices 173,800 Owned N/A Laguna, the Philippines Manufacturing, Warehousing and Offices 115,200 Owned N/A Lincoln, the United Kingdom Manufacturing, Warehousing and Offices 100,000 Owned N/A 22 Location Principal Function Square Footage Owned/ Leased Lease Expiration Food Processing: Gainesville, GA Manufacturing, Warehousing and Offices 107,400 Owned N/A Algona, IA Manufacturing, Warehousing and Offices 70,100 Owned N/A Elgin, IL Manufacturing, Warehousing and Offices 75,000 Owned N/A Elk Grove, IL Manufacturing, Warehousing and Offices 101,500 Leased Nov-29 Clayton, NC Manufacturing, Warehousing and Offices 65,000 Leased Oct-24 Maysville, OK Manufacturing, Warehousing and Offices 36,700 Owned N/A Souderton, PA Manufacturing, Warehousing and Offices 50,000 Owned N/A Plano, TX Manufacturing, Warehousing and Offices 339,100 Leased Apr-25 Waynesboro, VA Manufacturing, Warehousing and Offices 26,400 Owned N/A Bothell, WA Manufacturing, Warehousing and Offices 23,600 Leased May-25 Appleton, WI Manufacturing, Warehousing and Offices 20,000 Owned N/A Lodi, WI Manufacturing, Warehousing and Offices 114,600 Owned N/A Aalborg, Denmark Manufacturing, Warehousing and Offices 68,300 Leased Dec-25 Mauron, France Manufacturing, Warehousing and Offices 107,200 Leased Jan-23 Reichenau, Germany Manufacturing, Warehousing and Offices 57,900 Owned N/A Bangalore, India Manufacturing, Warehousing and Offices 75,000 Leased Mar-24 Casarsa della Delizia, Italy Manufacturing, Warehousing and Offices 109,200 Leased May-33 Castelnuovo Rangone, Italy Manufacturing, Warehousing and Offices 26,800 Leased Aug-24 Piumazzo, Italy Manufacturing, Warehousing and Offices 32,900 Leased Mar-30 Vicenza, Italy Manufacturing, Warehousing and Offices 53,500 Owned N/A Norwich, the United Kingdom Manufacturing, Warehousing and Offices 30,000 Owned N/A Residential Kitchen: Chino, CA Warehousing and Offices 100,000 Leased Apr-27 Redwood City, CA Warehousing and Offices 20,600 Leased Jul-24 Atlanta, GA Warehousing and Offices 169,200 Leased Dec-24 Buford, GA Warehousing and Offices 178,100 Leased Jun-23 Columbus, GA Warehousing and Offices 148,800 Leased Jun-23 Greenville, MI Manufacturing, Warehousing and Offices 225,000 Owned N/A Greenwood, MS** Manufacturing, Warehousing and Offices 740,600 Owned N/A Brown Deer, WI Manufacturing, Warehousing and Offices 165,700 Leased Nov-26 Kuurne, Belgium Manufacturing and Offices 242,300 Owned N/A Saint Ouen L'aumone, France Manufacturing and Warehousing 30,400 Owned N/A Waterford, Ireland Warehousing and Offices 73,000 Leased Jul-27 Ketley, the United Kingdom Manufacturing and Offices 217,300 Owned N/A Leamington Spa, the United Kingdom Manufacturing and Offices 270,200 Owned N/A Leamington Spa, the United Kingdom Manufacturing and Offices 100,300 Leased Aug-29 Nottingham, the United Kingdom Warehousing and Offices 153,100 Owned N/A * Contains two separate manufacturing facilities. ** Contains four separate manufacturing facilities.
Biggest changeThe principal properties of the company used to conduct business operations are listed below: Location Principal Function Square Footage Owned/Leased Lease Expiration Commercial Foodservice: Fort Smith, AR Manufacturing, Warehousing and Offices 712,600 Leased Jan-26 Chandler, AZ Manufacturing and Offices 14,400 Owned N/A Brea, CA Manufacturing, Warehousing and Offices 86,600 Leased Sep-26 Corona, CA Manufacturing and Offices 86,000 Owned N/A Vacaville, CA Manufacturing, Warehousing and Offices 128,800 Leased Nov-29 Windsor, CA Manufacturing, Warehousing and Offices 75,000 Leased Apr-32 Englewood, CO Manufacturing, Warehousing and Offices 105,000 Owned N/A Louisville, CO Manufacturing, Warehousing and Offices 37,700 Leased Jul-28 Cape Coral, FL Warehousing and Offices 16,000 Owned N/A Elgin, IL Manufacturing, Warehousing and Offices 191,200 Owned N/A Mundelein, IL Manufacturing, Warehousing and Offices 70,000 Owned N/A Rockton, IL Manufacturing, Warehousing and Offices 339,400 Owned N/A South Beloit, IL Warehousing 171,700 Leased Mar-24 Danville, IN Manufacturing and Offices 32,500 Owned N/A Menominee, MI Manufacturing, Warehousing and Offices 60,000 Owned N/A Charlotte, NC Manufacturing, Warehousing and Offices 44,000 Leased Feb-24 Fuquay-Varina, NC Manufacturing, Warehousing and Offices 183,900 Owned N/A Bow, NH Manufacturing, Warehousing and Offices 100,000 Owned N/A Pembroke, NH Warehousing 171,300 Leased Jul-24 Dayton, OH Manufacturing, Warehousing and Offices 37,700 Owned N/A Moraine, OH Warehousing 38,300 Leased Jun-27 Tualatin, OR Manufacturing, Warehousing and Offices 29,500 Leased May-28 Easton, PA Manufacturing, Warehousing and Offices 246,700 Owned N/A Smithville, TN Manufacturing, Warehousing and Offices 268,000 Owned N/A Carrollton, TX Manufacturing, Warehousing and Offices 148,500 Leased Aug-32 Essex Junction, VT* Manufacturing, Warehousing and Offices 372,500 Owned N/A Renton, WA Manufacturing, Warehousing and Offices 72,400 Leased Sep-28 New South Wales, Australia Manufacturing, Warehousing and Offices 204,900 Owned N/A Toronto, Canada* Manufacturing, Warehousing and Offices 87,700 Owned N/A Humen, China Manufacturing, Warehousing 10,900 Leased Mar-24 Ningbo, China Manufacturing, Warehousing and Offices 64,300 Leased Oct-25 Qingdao City, China Manufacturing, Warehousing and Offices 113,500 Leased Jul-29 Zhuhai City, China Manufacturing, Warehousing and Offices 134,900 Leased Dec-25 Brøndby, Denmark Manufacturing, Warehousing and Offices 50,900 Owned N/A Randers, Denmark Manufacturing, Warehousing and Offices 50,100 Owned N/A Viljandi, Estonia Manufacturing and Offices 47,000 Owned N/A Dublin, Ireland Manufacturing, Warehousing and Offices 17,100 Owned N/A Nusco, Italy Manufacturing, Warehousing and Offices 260,600 Owned N/A Sedico, Italy Manufacturing, Warehousing and Offices 52,500 Owned N/A Nogales, Mexico Manufacturing, Warehousing and Offices 129,000 Owned N/A Wiślina, Poland Manufacturing, Warehousing and Offices 77,500 Owned N/A Incheon, South Korea Manufacturing, Warehousing and Offices 227,400 Owned N/A Pineda de Mar, Spain Manufacturing, Warehousing and Offices 69,200 Owned N/A Arenys, Spain Warehousing and Offices 63,500 Leased Dec-41 Fristad, Sweden Manufacturing, Warehousing and Offices 173,800 Owned N/A Laguna, the Philippines Manufacturing, Warehousing and Offices 115,200 Owned N/A Lincoln, the United Kingdom Manufacturing, Warehousing and Offices 100,000 Owned N/A 24 Location Principal Function Square Footage Owned/Leased Lease Expiration Food Processing: Venice, FL Manufacturing, Warehousing and Offices 23,300 Leased Jun-24 Gainesville, GA Manufacturing, Warehousing and Offices 107,400 Owned N/A Algona, IA Manufacturing, Warehousing and Offices 70,100 Owned N/A Elgin, IL Manufacturing, Warehousing and Offices 75,000 Owned N/A Elk Grove, IL Manufacturing, Warehousing and Offices 101,500 Leased Nov-29 Clayton, NC Manufacturing, Warehousing and Offices 65,000 Leased Oct-24 Maysville, OK Manufacturing, Warehousing and Offices 36,300 Owned N/A Souderton, PA Manufacturing, Warehousing and Offices 50,000 Owned N/A Mansfield, TX Manufacturing, Warehousing and Offices 46,200 Owned N/A Plano, TX Manufacturing, Warehousing and Offices 339,100 Leased Apr-25 Waynesboro, VA Manufacturing, Warehousing and Offices 24,700 Owned N/A Appleton, WI Manufacturing, Warehousing and Offices 20,000 Owned N/A Lodi, WI Manufacturing, Warehousing and Offices 114,600 Owned N/A Aalborg, Denmark Manufacturing, Warehousing and Offices 68,300 Leased Jan-26 Mauron, France Manufacturing, Warehousing and Offices 107,200 Owned N/A Reichenau, Germany Manufacturing, Warehousing and Offices 57,900 Owned N/A Bangalore, India Manufacturing, Warehousing and Offices 141,100 Leased Jul-30 Casarsa della Delizia, Italy Manufacturing, Warehousing and Offices 130,700 Owned N/A Casarsa della Delizia, Italy Manufacturing, Warehousing and Offices 83,300 Leased May-33 Castelnuovo Rangone, Italy Manufacturing, Warehousing and Offices 26,800 Leased Dec-26 Piumazzo, Italy Manufacturing, Warehousing and Offices 32,900 Leased Mar-30 Vicenza, Italy Manufacturing, Warehousing and Offices 53,500 Leased Sep-32 Norwich, the United Kingdom Manufacturing, Warehousing and Offices 30,000 Owned N/A Residential Kitchen: Phenix City, AL Warehousing and Offices 335,000 Leased Dec-30 Phoenix, AZ Manufacturing, Warehousing and Offices 65,400 Owned N/A Chino, CA Warehousing and Offices 100,000 Leased Apr-27 Redwood City, CA Warehousing and Offices 20,600 Leased Jul-24 Buford, GA Warehousing and Offices 178,100 Leased Jun-28 Greenville, MI Manufacturing, Warehousing and Offices 225,000 Owned N/A Greenwood, MS** Manufacturing, Warehousing and Offices 738,300 Owned N/A York, PA Warehousing and Offices 204,300 Leased Jun-30 Brown Deer, WI Manufacturing, Warehousing and Offices 165,600 Leased Nov-26 Kuurne, Belgium Manufacturing, Warehousing and Offices 242,300 Owned N/A Saint Ouen L'aumone, France Manufacturing and Warehousing 30,400 Owned N/A Waterford, Ireland Warehousing and Offices 73,000 Leased Jul-27 Ketley, the United Kingdom Manufacturing and Offices 217,300 Owned N/A Leamington Spa, the United Kingdom Manufacturing and Offices 270,200 Owned N/A Leamington Spa, the United Kingdom Manufacturing and Offices 100,300 Leased Aug-29 Nottingham, the United Kingdom Warehousing and Offices 153,100 Owned N/A * Contains two separate manufacturing facilities. ** Contains four separate manufacturing facilities.
Item 2. Properties The company's principal executive offices are located in Elgin, Illinois. The company operates forty-one manufacturing facilities in the U.S. and thirty-four manufacturing facilities internationally.
Item 2. Properties The company's principal executive offices are located in Elgin, Illinois. The company operates forty-four manufacturing facilities in the U.S. and thirty-five manufacturing facilities internationally.
Management believes that these facilities are adequate for the operation of the company's business as presently conducted. 23
Management believes that these facilities are adequate for the operation of the company's business as presently conducted. 25

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSuch routine claims are vigorously contested and management does not believe that the outcome of any such pending litigation will have a material effect upon the financial condition, results of operations or cash flows of the company. Item 4. Mine Safety Issues Not applicable. 24 PART II
Biggest changeSuch routine claims are vigorously contested and management does not believe that the outcome of any such pending litigation will have a material effect upon the financial condition, results of operations or cash flows of the company. Item 4. Mine Safety Issues Not applicable. 26 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(“Bluezone”), the company issued 46,365 unregistered shares of the company’s common stock to a certain stockholder of Bluezone (“Bluezone Stockholder”) in exchange for 36,764 shares of series A preferred stock of Bluezone. The shares of company common stock were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended ("Securities Act").
Biggest changeOn January 26, 2023, in connection with the company’s purchase of assets from Appliance Innovation, Inc ("Appliance"), the company issued 27,395 unregistered shares of the company’s common stock to Appliance. The shares of company common stock were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act.
These withheld shares are not considered common stock repurchases under the authorized common stock repurchase plan and accordingly are not included in the common stock repurchase totals in the preceding table. Item 6. [Reserved] 26
These withheld shares are not considered common stock repurchases under the authorized common stock repurchase plan and accordingly are not included in the common stock repurchase totals in the preceding table. Item 6. [Reserved] 28
The company relied on such exemption based in part upon representations made by Appliance, including its status as an accredited investor, as such term is defined in Rule 501 of the Securities Act.
The company relied on such exemption based in part upon representations made by Filtration Automation, including its status as an accredited investor, as such term is defined in Rule 501 of the Securities Act.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Principal Market The company's Common Stock trades on the Nasdaq Global Select Market under the symbol "MIDD". Stockholders The company estimates there were approximately 54,820 record holders of the company's common stock as of February 27, 2023.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Principal Market The company's Common Stock trades on the Nasdaq Global Select Market under the symbol "MIDD". Stockholders The company estimates there were approximately 78,823 record holders of the company's common stock as of February 26, 2024.
The company relied on such exemption based in part upon representations made by Kamado Joe and Masterbuilt, including its status as an accredited investor, as such term is defined in Rule 501 of the Securities Act. 25 Issuer Purchases of Equity Securities Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program Maximum Number of Shares that May Yet be Purchased Under the Plan or Program (1) October 2, 2022 to October 29, 2022 — $ — — 2,469,737 October 30, 2022 to November 26, 2022 — — — 2,469,737 November 27, 2022 to December 31, 2022 188,363 132.66 188,363 2,281,374 Quarter ended December 31, 2022 188,363 $ 132.66 188,363 2,281,374 (1) On November 7, 2017, the company's Board of Directors resolved to terminate the company's existing share repurchase program, effective as of such date, which was originally adopted in 1998, and approved a new stock repurchase program.
The company relied on such exemption based in part upon representations made by Trade-Wind, including its status as an accredited investor, as such term is defined in Rule 501 of the Securities Act. 27 Issuer Purchases of Equity Securities Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program Maximum Number of Shares that May Yet be Purchased Under the Plan or Program (1) October 1, 2023 to October 28, 2023 — $ — — 1,883,636 October 29, 2023 to November 25, 2023 — — — 1,883,636 November 26, 2023 to December 30, 2023 — — — 1,883,636 Quarter ended December 30, 2023 — $ — — 1,883,636 (1) On November 7, 2017, the company's Board of Directors resolved to terminate the company's existing share repurchase program, effective as of such date, which was originally adopted in 1998, and approved a new stock repurchase program.
("Appliance"), the company issued 93,392 unregistered shares of the company’s common stock to Appliance. The shares of company common stock were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act.
(“Blue Sparq”), the company issued 10,231 unregistered shares of the company’s common stock to Blue Sparq. The shares of company common stock were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act.
The shares of company common stock were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act.
(“Filtration Automation”), the company issued 49,916 unregistered shares of the company’s common stock to Filtration Automation. The shares of company common stock were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act.
The company relied on such exemption based in part upon representations made by the Bluezone Stockholder, including its status as an accredited investor, as such term is defined in Rule 501 of the Securities Act. On December 23, 2020, in connection with the company’s purchase of assets from Appliance Innovation, Inc.
The company relied on such exemption based in part upon representations made by API, including its status as an accredited investor, as such term is defined in Rule 501 of the Securities Act. On April 3, 2023, in connection with the company’s purchase of all of the capital stock of Blue Sparq, Inc.
Securities Authorized for Issuance under Equity Compensation Plans For information pertaining to securities authorized for issuance under equity compensation plans and the related weighted average exercise price, see Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Unregistered Sales of Equity Securities in connection with Strategic Transactions On June 29, 2020, in connection with the company’s minority investment in Bluezone Products, Inc.
Securities Authorized for Issuance under Equity Compensation Plans For information pertaining to securities authorized for issuance under equity compensation plans and the related weighted average exercise price, see Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Unregistered Sales of Equity Securities in connection with Strategic Transactions On January 24, 2023, in connection with the company’s purchase of all of the capital stock of Flavor Burst Co., LLP (“Flavor Burst”), the company issued 6,956 unregistered shares of the company’s common stock to Flavor Burst.
As of December 31, 2022, the total number of shares authorized for repurchase under the program is 5,000,000. As of December 31, 2022, 2,718,626 shares had been purchased under the stock repurchase program and 2,281,374 shares remained authorized for repurchase.
As of December 30, 2023, the total number of shares authorized for repurchase under the program is 5,000,000. As of December 30, 2023, 3,116,364 shares had been purchased under the stock repurchase program and 1,883,636 shares remained authorized for repurchase.
On December 27, 2021, in connection with the company’s purchase of all of the capital stock of Masterbuilt Holdings, LLC ("Kamado Joe and Masterbuilt"), the company issued 12,921 unregistered shares of the company’s common stock to Kamado Joe and Masterbuilt.
On July 31, 2023, in connection with the company’s purchase of all of the capital stock of Trade-Wind Manufacturing, LLC (“Trade-Wind”), the company issued 39,573 unregistered shares of the company’s common stock to Trade-Wind. The shares of company common stock were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act.
Added
The shares of company common stock were issued in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act. The company relied on such exemption based in part upon representations made by Flavor Burst, including its status as an accredited investor, as such term is defined in Rule 501 of the Securities Act.
Added
The company relied on such exemption based in part upon representations made by Blue Sparq, including its status as an accredited investor, as such term is defined in Rule 501 of the Securities Act. On June 13, 2023, in connection with the company’s purchase of all of the capital stock of Filtration Automation, Inc.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeNET SALES SUMMARY (dollars in thousands) Fiscal Year Ended (1) 2022 2021 2020 Sales Percent Sales Percent Sales Percent Business Segments: Commercial Foodservice $ 2,410,266 59.8 % $ 2,032,761 62.5 % $ 1,510,279 60.1 % Food Processing 574,465 14.2 480,746 14.8 437,272 17.4 Residential Kitchen 1,048,122 26.0 737,285 22.7 565,706 22.5 Total $ 4,032,853 100.0 % $ 3,250,792 100.0 % $ 2,513,257 100.0 % (1) The company's fiscal year ends on the Saturday nearest to December 31. 28 Results of Operations The following table sets forth certain items in the consolidated statements of earnings as a percentage of net sales for the periods presented: Fiscal Year Ended (1) 2022 2021 2020 Net sales 100.0 % 100.0 % 100.0 % Cost of sales 64.1 63.2 64.9 Gross profit 35.9 36.8 35.1 Selling, general and administrative expenses 19.8 20.5 21.2 Restructuring 0.2 0.3 0.5 Merger termination fee — (3.4) — Gain on sale of plant — — (0.1) Impairments — — 0.6 Income from operations 15.9 19.4 12.9 Interest expense and deferred financing amortization, net 2.2 1.8 3.1 Net periodic pension benefit (other than service cost & curtailment) (1.0) (1.4) (1.6) Curtailment loss — — 0.6 Other expense (income), net 0.7 — 0.1 Earnings before income taxes 14.0 19.0 10.7 Provision for income taxes 3.2 4.0 2.4 Net earnings 10.8 % 15.0 % 8.3 % (1) The company's fiscal year ends on the Saturday nearest to December 31. 29 Fiscal Year Ended December 31, 2022 as Compared to January 1, 2022 NET SALES .
Biggest changeNET SALES SUMMARY (dollars in thousands) Fiscal Year Ended (1) 2023 2022 2021 Sales Percent Sales Percent Sales Percent Business Segments: Commercial Foodservice $ 2,521,471 62.5 % $ 2,394,763 59.4 % $ 2,014,372 62.0 % Food Processing 720,618 17.8 589,968 14.6 499,135 15.3 Residential Kitchen 794,516 19.7 1,048,122 26.0 737,285 22.7 Total $ 4,036,605 100.0 % $ 4,032,853 100.0 % $ 3,250,792 100.0 % (1) The company's fiscal year ends on the Saturday nearest to December 31. 30 Results of Operations The following table sets forth certain items in the consolidated statements of earnings as a percentage of net sales for the periods presented: Fiscal Year Ended (1) 2023 2022 2021 Net sales 100.0 % 100.0 % 100.0 % Cost of sales 62.0 64.1 63.2 Gross profit 38.0 35.9 36.8 Selling, general and administrative expenses 20.0 19.8 20.5 Restructuring 0.4 0.2 0.3 Impairments 1.9 — — Merger termination fee — — (3.4) Income from operations 15.7 15.9 19.4 Interest expense and deferred financing amortization, net 3.0 2.2 1.8 Net periodic pension benefit (other than service cost & curtailment) (0.2) (1.0) (1.4) Other expense (income), net 0.1 0.7 — Earnings before income taxes 12.8 14.0 19.0 Provision for income taxes 2.9 3.2 4.0 Net earnings 9.9 % 10.8 % 15.0 % (1) The company's fiscal year ends on the Saturday nearest to December 31. 31 Fiscal Year Ended December 30, 2023 as Compared to December 31, 2022 NET SALES .
The gross profit margin rate in fiscal 2022 excluding the impact of foreign exchange was 36.9%. • Gross profit at the Residential Kitchen Equipment Group increased by $57.2 million, or 21.3%, to $325.8 million in fiscal 2022 as compared to $268.6 million in fiscal 2021. Gross profit from acquisitions increased gross profit by $54.8 million.
The gross profit margin rate in fiscal 2022 excluding the impact of foreign exchange was 36.8%. • Gross profit at the Residential Kitchen Equipment Group increased by $57.2 million, or 21.3%, to $325.8 million in fiscal 2022 as compared to $268.6 million in fiscal 2021. Gross profit from acquisitions increased gross profit by $54.8 million.
The company considers qualitative factors to assess if it is more likely than not that the fair value of goodwill and indefinite-lived intangible assets is below the carrying value. 37 In conducting a qualitative assessment, the company analyzes a variety of events or factors that may influence the fair value of the reporting unit including, but not limited to: the results of prior quantitative assessments performed; changes in the carrying amount of the reporting unit; actual and projected revenue and operating margin; relevant market data for both the company and its peer companies; industry outlooks; macroeconomic conditions; liquidity; changes in key personnel; and the company's competitive position.
The company considers qualitative factors to assess if it is more likely than not that the fair value of goodwill and indefinite-lived intangible assets is below the carrying value. 39 In conducting a qualitative assessment, the company analyzes a variety of events or factors that may influence the fair value of the reporting unit including, but not limited to: the results of prior quantitative assessments performed; changes in the carrying amount of the reporting unit; actual and projected revenue and operating margin; relevant market data for both the company and its peer companies; industry outlooks; macroeconomic conditions; liquidity; changes in key personnel; and the company's competitive position.
If actual results are not consistent with management's estimate and assumptions, a material impairment could have an adverse effect on the company's financial condition and results of operations. 38 Indefinite-Life Intangible Valuations In performing a quantitative assessment of indefinite-life intangible assets other than goodwill, primarily trademarks and trade names, we analyze the variety of events or factors that may impact the fair value of the indefinite-life intangible, including, but not limited to: macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant factors.
If actual results are not consistent with management's estimate and assumptions, a material impairment could have an adverse effect on the company's financial condition and results of operations. 40 Indefinite-Life Intangible Valuations In performing a quantitative assessment of indefinite-life intangible assets other than goodwill, primarily trademarks and trade names, we analyze the variety of events or factors that may impact the fair value of the indefinite-life intangible, including, but not limited to: macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant factors.
Whether the more-likely-than-not recognition threshold is met for a particular tax benefit is a matter of judgment based on the individual facts and circumstances evaluated in light of all available evidence as of the balance sheet date. 40 New Accounting Pronouncements See Note 3(r) to the Consolidated Financial Statements for further information on the new accounting pronouncements.
Whether the more-likely-than-not recognition threshold is met for a particular tax benefit is a matter of judgment based on the individual facts and circumstances evaluated in light of all available evidence as of the balance sheet date. 42 New Accounting Pronouncements See Note 3(r) to the Consolidated Financial Statements for further information on the new accounting pronouncements.
Additional risks and uncertainties not currently known to the company or that it currently deems immaterial may impair its business operations. If any of the risks identified in "Item 1A. Risk Factors" actually occurs, the company's business, results of operations and financial condition could be materially adversely affected, and the trading price of the company's common stock could decline. 41
Additional risks and uncertainties not currently known to the company or that it currently deems immaterial may impair its business operations. If any of the risks identified in "Item 1A. Risk Factors" actually occurs, the company's business, results of operations and financial condition could be materially adversely affected, and the trading price of the company's common stock could decline. 43
This compares to $160.8 million of non-cash expenses in the prior year, including $42.7 million of depreciation expense, $75.8 million of intangible amortization related to acquisitions and $42.3 million of stock based compensation costs. 31 NON-OPERATING EXPENSES . Non-operating expenses increased $64.7 million to $75.2 million of expense in fiscal 2022 from $10.5 million of expense in fiscal 2021.
This compares to $160.8 million of non-cash expenses in the prior year, including $42.7 million of depreciation expense, $75.8 million of intangible amortization related to acquisitions and $42.3 million of stock based compensation costs. 36 NON-OPERATING EXPENSES . Non-operating expenses increased $64.7 million to $75.2 million of expense in fiscal 2022 from $10.5 million of expense in fiscal 2021.
If actual results are not consistent with management's estimate and assumptions, a material impairment charge of our trademarks and trade names could occur, which could have an adverse effect on the company's financial condition and results of operations. 39 Convertible Debt The company issued convertible debt with debt and equity components.
If actual results are not consistent with management's estimate and assumptions, a material impairment charge of our trademarks and trade names could occur, which could have an adverse effect on the company's financial condition and results of operations. 41 Convertible Debt The company issued convertible debt with debt and equity components.
Excluding acquisitions and foreign exchange, the net sales decrease in international sales was $11.7 million, or 4.1%. The decrease in international sales was primarily driven by challenging market conditions in the European market. 30 GROSS PROFIT .
Excluding acquisitions and foreign exchange, the net sales decrease in international sales was $11.7 million, or 4.1%. The decrease in international sales was primarily driven by challenging market conditions in the European market. 35 GROSS PROFIT .
Related Party Transactions From January 2, 2022, through the date hereof, there were no transactions between the company, its directors and executive officers that are required to be disclosed pursuant to Item 404 of Regulation S-K, promulgated under the Securities and Exchange Act of 1934, as amended. 36 Critical Accounting Policies and Estimates 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.
Related Party Transactions From January 1, 2023, through the date hereof, there were no transactions between the company, its directors and executive officers that are required to be disclosed pursuant to Item 404 of Regulation S-K, promulgated under the Securities and Exchange Act of 1934, as amended. 38 Critical Accounting Policies and Estimates 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.
If the estimated fair value of the indefinite-life intangible asset is less than its carrying value, we would recognize an impairment loss. Based on the qualitative assessment as of October 2, 2022, the company identified several trademarks and trade names with indicators of potential risk for impairment and performed quantitative assessments.
If the estimated fair value of the indefinite-life intangible asset is less than its carrying value, we would recognize an impairment loss. Based on the qualitative assessment as of October 1, 2023, the company identified several trademarks and trade names with indicators of potential risk for impairment and performed quantitative assessments.
Gross profit from acquisitions increased gross profit by $29.8 million. Excluding acquisitions, gross profit increased by $131.9 million related to higher sales volumes. The impact of foreign exchange rates decreased gross profit by approximately $15.2 million. The gross profit margin rate increased to 37.9% in fiscal 2022 as compared to 37.0% in the prior year.
Gross profit from acquisitions increased gross profit by $29.8 million. Excluding acquisitions, gross profit increased by $134.3 million related to higher sales volumes. The impact of foreign exchange rates decreased gross profit by approximately $15.2 million. The gross profit margin rate increased to 38.0% in fiscal 2022 as compared to 37.0% in the prior year.
In connection with the company’s acquisition activities, the company added assets and liabilities from the opening balance sheets of the acquired businesses in its consolidated balance sheets and accordingly these amounts are not reflected in the net changes in working capital. INVESTING ACTIVITIES. During 2022, net cash used for investing activities amounted to $348.3 million.
In connection with the company’s acquisition activities, the company added assets and liabilities from the opening balance sheets of the acquired businesses in its consolidated balance sheets and accordingly these amounts are not reflected in the net changes in working capital. INVESTING ACTIVITIES. During 2023, net cash used for investing activities amounted to $155.7 million.
The increase in domestic sales is related to improvements in market conditions, consumer demand, and pricing increases. International sales increased $46.3 million, or 7.7%, to $644.0 million, as compared to $597.7 million in the prior year. This includes the increase of $13.9 million from recent acquisitions and a decrease of $40.3 million related to the unfavorable impact of exchange rates.
The increase in domestic sales is related to improvements in market conditions, consumer demand, and pricing increases. International sales increased $47.0 million, or 7.9%, to $643.8 million, as compared to $596.8 million in the prior year. This includes the increase of $13.9 million from recent acquisitions and a decrease of $40.3 million related to the unfavorable impact of exchange rates.
Excluding acquisitions, gross profit increased by $21.0 million related to higher sales volumes. The impact of foreign exchange rates decreased gross profit by approximately $7.3 million. The gross profit margin rate decreased to 36.1% in fiscal 2022 as compared to 36.2% in the prior year.
Excluding acquisitions, gross profit increased by $18.6 million related to higher sales volumes. The impact of foreign exchange rates decreased gross profit by approximately $7.3 million. The gross profit margin rate decreased to 36.0% in fiscal 2022 as compared to 36.4% in the prior year.
Excluding the impact of foreign exchange and acquisitions, sales increased 13.3% for the year, including a net sales increase of 16.4% at the Commercial Foodservice Equipment Group, a net sales increase of 14.3% at the Food Processing Equipment Group and a net sales increase of 4.3% at the Residential Kitchen Equipment Group. • Net sales of the Commercial Foodservice Equipment Group increased by $377.5 million, or 18.6%, to $2,410.3 million in fiscal 2022 as compared to $2,032.8 million in fiscal 2021.
Excluding the impact of foreign exchange and acquisitions, sales increased 13.3% for the year, including a net sales increase of 16.7% at the Commercial Foodservice Equipment Group, a net sales increase of 13.2% at the Food Processing Equipment Group and a net sales increase of 4.3% at the Residential Kitchen Equipment Group. • Net sales of the Commercial Foodservice Equipment Group increased by $380.4 million, or 18.9%, to $2,394.8 million in fiscal 2022 as compared to $2,014.4 million in fiscal 2021.
At December 31, 2022, the company was in compliance with all covenants pursuant to its borrowing agreements.
At December 30, 2023, the company was in compliance with all covenants pursuant to its borrowing agreements.
International sales increased $30.2 million, or 22.6%, to $163.6 million, as compared to $133.4 million in the prior year. This includes the increase of $30.0 million from recent acquisitions and a decrease of $16.2 million related to the unfavorable impact of exchange rates. Excluding acquisitions and foreign exchange, the net sales increase in international sales was $16.4 million, or 12.3%.
International sales increased $29.5 million, or 22.0%, to $163.8 million, as compared to $134.3 million in the prior year. This includes the increase of $30.0 million from recent acquisitions and a decrease of $16.2 million related to the unfavorable impact of exchange rates. Excluding acquisitions and foreign exchange, the net sales increase in international sales was $15.7 million, or 11.7%.
Total debt increased to $2.7 billion at December 31, 2022 from $2.4 billion at January 1, 2022. OPERATING ACTIVITIES . Net cash provided by operating activities after changes in assets and liabilities amounted to $332.6 million as compared to $423.4 million in the prior year.
Total debt decreased to $2.4 billion at December 30, 2023 from $2.7 billion December 31, 2022, respectively. OPERATING ACTIVITIES . Net cash provided by operating activities after changes in assets and liabilities amounted to $628.8 million as compared to $332.6 million in the prior year.
Gross profit margins have been negatively impacted by acquisitions, including $17.4 million of acquisition related inventory step-up charges, along with rising costs of many raw materials and inputs, higher labor rates, and logistics costs. • Gross profit at the Commercial Foodservice Equipment Group increased by $161.7 million, or 21.5%, to $914.6 million in fiscal 2022 as compared to $752.9 million in fiscal 2021.
Gross profit margins have been negatively impacted by acquisitions, including $17.4 million of acquisition related inventory step-up charges, along with rising costs of many raw materials and inputs, higher labor rates, and logistics costs. • Gross profit at the Commercial Foodservice Equipment Group increased by $164.1 million, or 22.0%, to $909.4 million in fiscal 2022 as compared to $745.3 million in fiscal 2021.
Excluding acquisitions and foreign exchange, the net sales increase in international sales was $120.2 million, or 27.2%.
Excluding acquisitions and foreign exchange, the net sales increase in international sales was $13.3 million, or 2.1%.
Domestically, the company realized a sales increase of $80.5 million, or 21.5%, to $454.4 million, as compared to $373.9 million in the prior year. This includes an increase of $3.5 million from recent acquisitions. Excluding acquisitions, the net increase in domestic sales was $77.0 million, or 20.6%.
Domestically, the company realized a sales increase of $77.4 million, or 4.4%, to $1,828.4 million, as compared to $1,751.0 million in the prior year. This includes an increase of $24.9 million from recent acquisitions. Excluding acquisitions, the net increase in domestic sales was $52.5 million, or 3.0%.
The company considers the implied control premium and conclude whether it is reasonable based on other recent market transactions. The company performed a qualitative assessment as of October 2, 2022. As a result of the financial performance indicators for the Residential Kitchen reporting unit, the company completed a quantitative analysis.
The company considers the implied control premium and conclude whether it is reasonable based on other recent market transactions. As a result of the financial performance indicators for the Residential Kitchen reporting unit, the company deemed it necessary to complete a quantitative analysis.
Excluding the impact of acquisitions, net sales of the Commercial Foodservice Equipment Group increased $292.9 million, or 14.4%, as compared to the prior year. Excluding the impact of foreign exchange and acquisitions, net sales increased $333.2 million, or 16.4% at the Commercial Foodservice Equipment Group.
Excluding the impact of acquisitions, net sales of the Commercial Foodservice Equipment Group increased $68.9 million, or 2.9%, as compared to the prior year. Excluding the impact of foreign exchange and acquisitions, net sales increased $65.8 million, or 2.7% at the Commercial Foodservice Equipment Group.
The gross profit margin rate in fiscal 2022 excluding acquisitions and the impact of foreign exchange was 38.0%. • Gross profit at the Food Processing Equipment Group increased by $33.2 million, or 19.1%, to $207.4 million in fiscal 2022 as compared to $174.2 million in fiscal 2021. Gross profit from acquisitions increased gross profit by $12.2 million.
The gross profit margin rate in fiscal 2022 excluding acquisitions and the impact of foreign exchange was 38.1%. • Gross profit at the Food Processing Equipment Group increased by $30.8 million, or 16.9%, to $212.6 million in fiscal 2022 as compared to $181.8 million in fiscal 2021. Gross profit from acquisitions increased gross profit by $12.2 million.
Excluding acquisitions and foreign exchange, the net sales increase in international sales was $72.7 million, or 12.2%.
Excluding acquisitions and foreign exchange, the net sales increase in international sales was $73.4 million, or 12.3%.
Restructuring expenses decreased $4.7 million to $7.7 million from $12.4 million in the prior year period. In fiscal 2021, restructuring expenses related primarily to headcount reductions and facility consolidations within the Commercial Foodservice Equipment Group.
Restructuring expenses increased $4.4 million to $14.1 million from $9.7 million in the prior year period. In fiscal 2023, restructuring expenses related primarily to headcount reductions and facility consolidations within the Commercial Foodservice Equipment Group and Residential Kitchen Equipment Group.
Domestically, the company realized a sales increase of $331.2 million, or 23.1%, to $1,766.3 million, as compared to $1,435.1 million in the prior year. This includes an increase of $70.7 million from recent acquisitions. Excluding acquisitions, the net increase in domestic sales was $260.5 million, or 18.2%.
Domestically, the company realized a sales increase of $333.4 million, or 23.5%, to $1,751.0 million, as compared to $1,417.6 million in the prior year. This includes an increase of $70.7 million from recent acquisitions. Excluding acquisitions, the net increase in domestic sales was $262.7 million, or 18.5%.
The fair value of the reporting unit exceeded its carrying value by nearly 20% and no impairment of goodwill was recognized. As a result of the qualitative assessment for the other two reporting units, the company determined it is more likely than not that the fair value of our reporting units are greater than the carrying amounts.
As a result of the qualitative assessment for the other two reporting units, the company determined it is more likely than not that the fair value of our reporting units are greater than the carrying amounts.
Excluding the impact of acquisitions, net sales of the Food processing Equipment Group increased $52.5 million, or 10.9%, as compared to the prior year. Excluding the impact of foreign exchange and acquisitions, net sales increased $68.7 million, or 14.3% at the Food Processing Equipment Group.
Excluding the impact of acquisitions, net sales of the Food processing Equipment Group increased $69.1 million, or 11.7%, as compared to the prior year. Excluding the impact of foreign exchange and acquisitions, net sales increased $63.4 million, or 10.7% at the Food Processing Equipment Group.
Domestically, the company realized a sales increase of $63.6 million, or 18.3%, to $410.9 million, as compared to $347.3 million in the prior year. This includes an increase of $11.3 million from recent acquisitions. Excluding acquisitions, the net increase in domestic sales was $52.3 million, or 15.1%. The increase in domestic sales reflects growth primarily driven by protein products.
Domestically, the company realized a sales increase of $53.1 million, or 12.5%, to $479.3 million, as compared to $426.2 million in the prior year. This includes an increase of $23.7 million from recent acquisitions. Excluding acquisitions, the net increase in domestic sales was $29.4 million, or 6.9%. The increase in domestic sales reflects growth primarily driven by protein products.
The increase in international sales is related to improvements in market conditions, primarily in the European and Latin American markets. • Net sales of the Food Processing Equipment Group increased by $93.8 million, or 19.5%, to $574.5 million in fiscal 2022, as compared to $480.7 million in fiscal 2021.
The increase in international sales is related to improvements in market conditions, primarily in the European and Latin American markets. • Net sales of the Food Processing Equipment Group increased by $90.9 million, or 18.2%, to $590.0 million in fiscal 2022, as compared to $499.1 million in fiscal 2021.
Cash used to fund acquisitions and investments amounted to $278.8 million . Additionally, $67.3 million was expended, primarily for upgrades of production equipment and manufacturing facilities. FINANCING ACTIVITIES. Net cash flows provided by financing activities amounted to $7.6 million in 2022. The company’s borrowing activities during 2022 included $314.8 million of net proceeds under its Credit Facility.
Cash used to fund acquisitions and investments amounted to $68.8 million . Additionally, $85.2 million was expended, primarily for upgrades of production equipment and manufacturing facilities. FINANCING ACTIVITIES. Net cash flows used for financing activities amounted to $390.9 million in 2023. The company’s borrowing activities during 2023 included $308.3 million of net repayments under its Credit Facility.
Excluding acquisitions, gross profit increased by approximately $53.3 million related to higher sales volumes. The impact of foreign exchange rates increased gross profit by approximately $5.3 million. The gross margin rate increased to 36.4% in fiscal 2021 as compared to 36.1% in the prior year.
Excluding acquisitions, gross profit increased by $80.4 million. The impact of foreign exchange rates increased gross profit by approximately $0.4 million. The gross profit margin rate increased to 40.1% in fiscal 2023 as compared to 38.0% in the prior year related to higher sales volumes and improved product mix.
The fiscal 2022 tax provision also reflects higher non-deductible stock compensation expense, where the prior year included favorable impacts from tax rate changes, tax refunds and adjustments for the finalization of 2020 tax returns.
The fiscal 2022 tax provision also reflects higher non-deductible stock compensation expense, where the prior year included favorable impacts from tax rate changes, tax refunds and adjustments for the finalization of 2020 tax returns. The effective rates in 2022 and 2021 were higher than the federal tax rate of 21% primarily due to state taxes and foreign tax rate differentials.
Excluding the impact of acquisitions, net sales of the Commercial Foodservice Equipment Group increased $445.1 million, or 29.5%, as compared to the prior year. Excluding the impact of foreign exchange and acquisitions, net sales increased $426.1 million, or 28.2% at the Commercial Foodservice Equipment Group.
Excluding the impact of acquisitions, net sales of the Commercial Foodservice Equipment Group increased $295.8 million, or 14.7%, as compared to the prior year. Excluding the impact of foreign exchange and acquisitions, net sales increased $336.1 million, or 16.7% at the Commercial Foodservice Equipment Group.
International sales increased $7.2 million, or 5.7%, to $133.4 million, as compared to $126.2 million in the prior year. This includes an increase of $3.8 million related to the favorable impact of exchange rates. Excluding foreign exchange, the net sales increase in international sales was $3.4 million, or 2.7%.
International sales increased $77.5 million, or 47.3%, to $241.3 million, as compared to $163.8 million in the prior year. This includes the increase of $37.8 million from recent acquisitions and an increase of $5.7 million related to the favorable impact of exchange rates. Excluding acquisitions and foreign exchange, the net sales increase in international sales was $34.0 million, or 20.8%.
Excluding the impact of foreign exchange, acquisitions and the disposition, sales increased 23.7% for the year, including a net sales increase of 28.2% at the Commercial Foodservice Equipment Group, a net sales increase of 9.1% at the Food Processing Equipment Group and a net sales increase of 23.2% at the Residential Kitchen Equipment Group. • Net sales of the Commercial Foodservice Equipment Group increased by $522.5 million, or 34.6%, to $2,032.8 million in fiscal 2021 as compared to $1,510.3 million in fiscal 2020.
Excluding the impact of foreign exchange and acquisitions, sales decreased 3.2% for the year, including a net sales increase of 2.7% at the Commercial Foodservice Equipment Group, a net sales increase of 10.7% at the Food Processing Equipment Group and a net sales decrease of 24.7% at the Residential Kitchen Equipment Group. • Net sales of the Commercial Foodservice Equipment Group increased by $126.7 million, or 5.3%, to $2,521.5 million in fiscal 2023 as compared to $2,394.8 million in fiscal 2022.
Excluding acquisitions and a disposition, net sales increased $631.8 million, or 25.3%, from the prior year. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars for fiscal 2021 increased net sales by approximately $39.5 million.
Excluding acquisitions, net sales decreased $117.6 million, or 2.9%, from the prior year. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars for fiscal 2023 increased net sales by approximately $12.3 million.
Additionally, the company repurchased $264.8 million of Middleby common shares during 2022. This was comprised of $15.8 million to repurchase 90,243 shares of Middleby common stock that were surrendered to the company for withholding taxes related to restricted stock vestings and $249.0 million used to repurchase 1,553,961 shares of its common stock under a repurchase program.
Additionally, the company repurchased $74.6 million of Middleby common shares during 2023. This was comprised of $19.6 million to repurchase 126,704 shares of Middleby common stock that were surrendered to the company for withholding taxes related to restricted stock vestings and $55.0 million used to repurchase 397,738 shares of its common stock under a repurchase program.
Excluding acquisitions, gross profit increased by approximately $203.6 million related to higher sales volumes. The impact of foreign exchange rates increased gross profit by approximately $6.7 million. The gross profit margin rate increased to 37.0% in fiscal 2021 as compared to 34.6% in the prior year.
Excluding acquisitions, gross profit increased by $38.7 million. The impact of foreign exchange rates increased gross profit by approximately $2.3 million. The gross profit margin rate increased to 38.1% in fiscal 2023 as compared to 36.0% in the prior year related to higher sales volumes, improved product mix and acquisition integration benefits.
In fiscal 2020, the company recognized impairment of $11.6 million associated with several trade names in conjunction with the diminution of value as we assessed current market conditions and future business plans. See Note 3 (f) to the Consolidated Financial Statements for further information on the annual impairment testing.
In fiscal 2023, the company recognized non-cash impairment of $78.1 million primarily associated with several trademarks in the Residential Kitchen Equipment Group in conjunction with diminution of values as we assessed recent market conditions and future business plans. See note 3 (f) to the Consolidated Financial Statements for further information on the annual impairment testing. INCOME FROM OPERATIONS .
Excluding the impact of acquisitions and the disposition, net sales of the Residential Kitchen Equipment Group increased $143.3 million, or 26.2%, as compared to the prior year. Excluding the impact of foreign exchange, acquisitions, and the disposition, net sales increased $126.6 million, or 23.2% at the Residential Kitchen Equipment Group.
Excluding the impact of acquisitions, net sales of the Food processing Equipment Group increased $49.6 million, or 9.9%, as compared to the prior year. Excluding the impact of foreign exchange and acquisitions, net sales increased $65.8 million, or 13.2% at the Food Processing Equipment Group.
The company believes the assumptions utilized within the quantitative analysis are reasonable and consistent with assumptions that would be used by other marketplace participants. Such assumptions are, however, inherently uncertain, and different assumptions could lead to a different assessment for the trademarks that could result in a material impairment that would adversely affect our results of operations.
Such assumptions are, however inherently uncertain, and different assumptions could lead to a different assessment for the reporting unit that could result in a material impairment that would adversely affect our results of operations.
International sales increased $91.1 million, or 47.5% to $282.9 million, as compared to $191.8 million in the prior year. This includes an increase of $43.9 million from recent acquisitions and an increase of $16.7 million related to the favorable impact of exchange rates.
The increase in domestic sales is related to higher shipments, improved product mix and pricing increases. International sales increased $49.3 million, or 7.7%, to $693.1 million, as compared to $643.8 million in the prior year. This includes the increase of $32.9 million from recent acquisitions and an increase of $3.1 million related to the favorable impact of exchange rates.
Net periodic pension benefit (other than service costs and curtailment) increased $5.1 million to $45.1 million in fiscal 2021 from $40.0 million in fiscal 2020, related to the decrease in discount rate used to calculate the interest cost.
Net periodic pension benefit (other than service costs and curtailment) decreased $33.6 million to $9.1 million in fiscal 2023 from $42.7 million in fiscal 2022 related to the increase in discount rate used to calculate the interest cost.
The gross margin rate in fiscal 2021 excluding acquisitions and impact of foreign exchange was 37.0%. • Gross profit at the Commercial Foodservice Equipment Group increased by $230.7 million, or 44.2%, to $752.9 million in fiscal 2021 as compared to $522.2 million in fiscal 2020. Gross profit from acquisitions increased gross profit by $27.1 million.
The gross margin rate in fiscal 2023 excluding acquisitions and impact of foreign exchange was 38.1%. • Gross profit at the Commercial Foodservice Equipment Group increased by $101.2 million, or 11.1%, to $1,010.6 million in fiscal 2023 as compared to $909.4 million in fiscal 2022. Gross profit from acquisitions increased gross profit by $20.8 million.
Domestically, the company realized a sales increase of $367.2 million, or 34.4%, to $1,435.1 million, as compared to $1,067.9 million in the prior year. This includes an increase of $61.3 million from recent acquisitions. Excluding acquisitions, the net increase in domestic sales was $305.9 million, or 28.6%.
Domestically, the company realized a sales increase of $61.4 million, or 16.8%, to $426.2 million, as compared to $364.8 million in the prior year. This includes an increase of $11.3 million from recent acquisitions. Excluding acquisitions, the net increase in domestic sales was $50.1 million, or 13.7%. The increase in domestic sales reflects growth primarily driven by protein products.
The termination fee received is reflected in the Condensed Consolidated Statements of Comprehensive Income as the "merger termination fee" and $19.7 million of deal costs associated with the transaction are reflected in selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income.
The termination fee received is reflected in the Condensed Consolidated Statements of Comprehensive Income as the "merger termination fee" and $19.7 million of deal costs associated with the transaction are reflected in selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income. 37 Financial Condition and Liquidity Total cash and cash equivalents increased by $85.5 million to $247.5 million at December 30, 2023 from $162.0 million at December 31, 2022.
The company believes the assumptions utilized within the quantitative analysis are reasonable and consistent with assumptions that would be used by other marketplace participants. Kamado Joe and Masterbuilt trademarks The Kamado Joe and Masterbuilt trademarks are at risk at October 2, 2022. The fair value exceeded their carrying value of approximately $145.0 million by approximately 10%.
The fair values of the trademarks tested with no impairment and exceeded their carrying values by 10% or more. The company believes the assumptions utilized within the quantitative analyses are reasonable and consistent with assumptions that would be used by other marketplace participants.
The gross profit margin rate in fiscal 2021 excluding acquisitions and the impact of foreign exchange was 37.1%. • Gross profit at the Food Processing Equipment Group increased by $17.1 million, or 10.9%, to $174.2 million in fiscal 2021 as compared to $157.1 million in fiscal 2020. The impact of foreign exchange rates increased gross profit by approximately $2.0 million.
The gross profit margin rate in fiscal 2023 excluding acquisitions and the impact of foreign exchange was 40.2%. • Gross profit at the Food Processing Equipment Group increased by $61.8 million, or 29.1%, to $274.4 million in fiscal 2023 as compared to $212.6 million in fiscal 2022. Gross profit from acquisitions increased gross profit by $23.1 million.
The increase in international sales is related to improvements in market conditions, primarily in the European and Asian markets. • Net sales of the Food Processing Equipment Group increased by $43.4 million, or 9.9%, to $480.7 million in fiscal 2021, as compared to $437.3 million in fiscal 2020.
The increase in international sales is related to improvements in market conditions, primarily in the Asia and Latin American markets. • Net sales of the Food Processing Equipment Group increased by $130.6 million, or 22.1%, to $720.6 million in fiscal 2023, as compared to $590.0 million in fiscal 2022.
The gross profit margin rate in fiscal 2021 excluding the impact of foreign exchange was 36.1%. • Gross profit at the Residential Kitchen Equipment Group increased by $64.3 million, or 31.5%, to $268.6 million in fiscal 2021 as compared to $204.3 million in fiscal 2020. Gross profit from acquisitions increased gross profit by $11.0 million.
The gross profit margin rate in fiscal 2023 excluding the impact of foreign exchange was 38.1%. • Gross profit at the Residential Kitchen Equipment Group decreased by $75.8 million, or 23.3%, to $250.0 million in fiscal 2023 as compared to $325.8 million in fiscal 2022. The impact of foreign exchange rates increased gross profit by approximately $1.2 million.
During fiscal 2020, restructuring charges related primarily to headcount reductions and cost reduction initiatives related to facility consolidations at the Commercial Foodservice Equipment Group and Residential Kitchen Equipment Group. IMPAIRMENTS.
During fiscal 2022, restructuring charges related primarily to non-cash restructuring valuation allowances on balances associated with activities in Russia and headcount reductions and facility consolidations within the Commercial Foodservice Equipment Group and Residential Kitchen Equipment Group. IMPAIRMENTS.
The availability of resources and inflationary costs have resulted in heightened inventory levels, impacts margins and placed constraints on our operating cash flows. Heightened backlog levels have also resulted. Our teams are actively evaluating options for alternative suppliers, dual sourcing and collaborating across the organization, where appropriate, without materially presenting new risks or increasing current risks around quality and reliability.
The decreased availability of resources and inflationary costs have resulted in heightened inventory levels. To combat these pressures, the company has evaluated alternative sourcing, dual sourcing and collaborated across the organization, where appropriate, without materially presenting new risks or increasing current risks around quality and reliability.
This compares to $127.7 million of non-cash expenses in the prior year, including $39.1 million of depreciation expense, $69.0 million of intangible amortization related to acquisitions and $19.6 million of stock based compensation costs. NON-OPERATING EXPENSES . Non-operating expenses decreased $45.9 million to $10.5 million of expense in fiscal 2021 from $56.4 million of expense in fiscal 2020.
This compares to $189.3 million of non-cash expenses in the prior year, including $44.6 million of depreciation expense, $86.3 million of intangible amortization related to acquisitions and $58.4 million of stock based compensation costs. NON-OPERATING EXPENSES . Non-operating expenses increased $40.2 million to $115.4 million of expense in fiscal 2023 from $75.2 million of expense in fiscal 2022.
The effective rates in 2022 and 2021 are higher than the federal tax rate of 21% primarily due to state taxes and foreign tax rate differentials. 32 Fiscal Year Ended January 1, 2022 as Compared to January 2, 2021 NET SALES .
The fiscal 2022 tax provision included a deferred tax benefit of approximately $13 million associated with legal entity restructuring the company undertook to integrate and simplify the company’s business operations.The effective rates in 2023 and 2022 were higher than the federal tax rate of 21% primarily due to state taxes and foreign tax rate differentials. 34 Fiscal Year Ended December 31, 2022 as Compared to January 1, 2022 NET SALES .
Net sales from the acquisitions of Novy, Char-Griller, and Kamado Joe and Masterbuilt, which were acquired on July 12, 2021, December 27, 2021, and December 27, 2021, respectively, accounted for an increase of $47.4 million during fiscal 2021.
Net sales from the acquisitions of CP Packaging, Colussi Ermes, Escher, and Filtration Automation, which were acquired on July 12, 2022, July 27, 2022, November 10, 2022, and June 13, 2023, respectively, accounted for an increase of $61.5 million during fiscal 2022.
The increase in international revenues is primarily driven by protein projects. • Net sales of the Residential Kitchen Equipment Group increased by $171.6 million, or 30.3%, to $737.3 million in fiscal 2021, as compared to $565.7 million in fiscal 2020.
The increase in international sales reflects growth primarily driven by bakery products. • Net sales of the Residential Kitchen Equipment Group decreased by $253.6 million, or 24.2%, to $794.5 million in fiscal 2023, as compared to $1,048.1 million in fiscal 2022.
As a percentage of net sales, selling, general and administrative expenses amounted to 20.5% in fiscal 2021 and 21.2% in fiscal 2020. Selling, general and administrative expenses reflect increased costs of $33.0 million associated with acquisitions, including $11.8 million of non-cash intangible amortization expense.
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES . Combined selling, general, and administrative expenses increased by $9.7 million to $806.9 million in fiscal 2023 from $797.2 million in 2022. As a percentage of net sales, selling, general and administrative expenses amounted to 20.0% in fiscal 2023 and 19.8% in fiscal 2022.
During fiscal 2020 a curtailment cost of approximately $14.7 million was recognized as a result of closing the AGA Group Pension Scheme to future pension accruals. INCOME TAXES . A tax provision of $131.0 million, at an effective rate of 21.1%, was recorded for fiscal 2021 as compared to $60.8 million at an effective rate of 22.7%, in fiscal 2020.
A tax provision of $118.5 million, at an effective rate of 22.8%, was recorded for fiscal 2023 as compared to $127.8 million at an effective rate of 22.7%, in fiscal 2022. The fiscal 2023 tax provision includes a $7.0 million tax benefit for the finalization of the 2022 tax returns.
Income from operations in 2021 included $160.8 million of non-cash expenses, including $42.7 million of depreciation expense, $75.8 million of intangible amortization related to acquisitions and $42.3 million of stock based compensation.
Excluding the impairment, the increase in operating income resulted from increased profitability driven by product mix and execution of strategic cost initiatives. 33 Income from operations in 2023 included $254.5 million of non-cash expenses, including $50.4 million of depreciation expense, $75.0 million of intangible amortization related to acquisitions, $78.1 million of impairments of trademarks and $51.0 million of stock based compensation.
In fiscal 2021, there were no impairments recognized in the Consolidated Financial Statements. 34 INCOME FROM OPERATIONS . Income from operations increased $305.6 million to $630.0 million in fiscal 2021 from $324.4 million in fiscal 2020. Operating income as a percentage of net sales amounted to 19.4% in 2021 as compared to 12.9% in 2020.
Income from operations decreased $4.7 million to $634.9 million in fiscal 2023 from $639.6 million in fiscal 2022. Operating income as a percentage of net sales amounted to 15.7% in 2023 as compared to 15.9% in 2022. During fiscal 2023, operating income included the impairment of intangible assets.
The company continues to monitor the impacts from the COVID-19 pandemic and subsequent accelerated recovery, along with inflationary impacts from the war in Ukraine to assess the outlook for demand of its products and the impact on its business and financial performance.
The company continues to monitor global and regional economic market conditions, channel inventory levels, and the underlying demand for its products to assess the impact on its business and financial performance.
Gross profit increased by $312.9 million to $1,194.9 million in fiscal 2021 from $882.0 million in fiscal 2020, primarily reflecting higher sales volumes related to improvements in market conditions and consumer demand and the favorable impact of foreign exchange rates of $14.0 million. The gross profit margin rate increased to 36.8% in 2021 as compared to 35.1% in 2020.
Gross profit increased by $87.5 million to $1,534.1 million in fiscal 2023 from $1,446.6 million in fiscal 2022, primarily reflecting higher sales volumes at the Commercial Foodservice Equipment Group and Food Processing Equipment Group. The impact of foreign exchange rates increased gross profit by $3.9 million.
The gross profit margin rate in fiscal 2021 excluding acquisitions and the impact of foreign exchange was 37.5%. SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES . Combined selling, general, and administrative expenses increased by $136.1 million to $668.0 million in fiscal 2021 from $531.9 million in 2020.
The gross margin rate increased to 31.5% in fiscal 2023 as compared to 31.1% in the prior year. Gross profit margins in the prior year were negatively impacted by acquisitions, including $15.1 million of acquisition related inventory step-up charges. The gross profit margin rate in fiscal 2023 excluding the acquisition and the impact of foreign exchange was 31.4%.
The increase in domestic sales is related to improvements in market conditions and consumer demand. International sales increased $155.3 million, or 35.1%, to $597.7 million, as compared to $442.4 million in the prior year. This includes the increase of $16.1 million from recent acquisitions and an increase of $19.0 million related to the favorable impact of exchange rates.
This includes an increase of $3.5 million related to the favorable impact of exchange rates. Excluding the acquisition and foreign exchange, the net sales decrease in international sales was $69.1 million, or 20.0%. The decrease in domestic and international sales was driven by challenging market conditions and higher inventory levels in various channels. . 32 GROSS PROFIT .
Excluding the impact of foreign exchange, net sales increased $39.6 million, or 9.1% at the Food Processing Equipment Group. Domestically, the company realized a sales increase of $36.2 million, or 11.6%, to $347.3 million, as compared to $311.1 million in the prior year. The increase in domestic sales reflects growth driven by both protein and bakery products.
Domestically, the company realized a sales decrease of $188.6 million, or 26.9%, to $513.3 million, as compared to $701.9 million in the prior year. Excluding the acquisition, the net decrease in domestic sales was $190.0 million, or 27.1%. International sales decreased $65.0 million, or 18.8% to $281.2 million, as compared to $346.2 million in the prior year.
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The company cautions readers to carefully consider the statements set forth in the section entitled "Item 1A.
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The company cautions readers to carefully consider the statements set forth in the section entitled "Item 1A. Risk Factors" of this filing and discussion of risks included in the company's SEC filings. 29 Current Events Inflation and Interest Rate Environment The company has been negatively impacted by inflation in wages, logistics, energy, raw materials and component costs.
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Risk Factors" of this filing and discussion of risks included in the company's SEC filings. 27 COVID-19 Update The global coronavirus ("COVID-19") pandemic and associated counteracting measures implemented by governments and businesses around the world, as well as subsequent accelerated recovery in global business activity, have increased uncertainty in the global business environment and led to supply chain disruptions and shortages in global markets for commodities, logistics and labor, as well as input cost inflation.
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Price increases and pricing strategies have been implemented to mitigate the impact of cost inflation on margins and the company continues to actively monitor costs. High inflation led to increased interest rates throughout 2022 and through the first six months of 2023, which combined with global macroeconomic uncertainty has and may continue to impact customer demand.
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More recently, the war in Ukraine has further contributed to some of the disruptive factors. Activity in most of our end markets we serve improved through 2021 and into 2022, although demand in certain businesses, most notably in our residential segment, have faced recent demand headwinds.
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Most notably in our residential segment, we have faced recent demand headwinds due to macroeconomic conditions. Even in light of such headwinds, we remain focused on delivering strong financial results and executing on our long-term strategy and profitability objectives.
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While facing headwinds, including a highly inflationary environment, we remain committed to executing productivity and profitability initiatives to address margin challenges, combined with diligent pricing actions where possible.
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Supply Chain, Labor and Logistics Constraints The company continues to actively monitor global supply chain, labor and logistics constraints, which have had a negative impact on the company's ability to source parts and complete and ship units. While the company is seeing improvement on certain supply chain and logistics constraints, supply chains for certain key components remain distressed.
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The limited availability of certain product components has resulted in lengthened lead times and higher input costs, including labor, energy, freight, logistics, and in some cases, has impacted our ability to meet customer demand. The company expects input costs to remain elevated for some period of time, which we are working to mitigate.
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Our capital resources have been and the company expects they will continue to be sufficient to address these challenges.
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We expect our cash flows to continue to improve as we manage inventory levels to fulfill the backlog and provide for future demand. Our capital resources have been sufficient to address these challenges and are expected to continue to be. We remain focused on delivering strong financial results and executing on our long-term strategy and profitability objectives.
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Net sales in fiscal 2023 increased by $3.7 million, or 0.1%, to $4,036.6 million as compared to $4,032.9 million in fiscal 2022. Net sales increased by $121.3 million, or 3.0%, from the fiscal 2022 acquisitions of Kloppenberg, Proxaut, Icetro, CP Packaging, Colussi Ermes, Escher, Marco, and the fiscal 2023 acquisitions of Flavor Burst, Blue Sparq, Filtration Automation, Terry, and Trade-Wind.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe company has designated these swaps as cash flow hedges and all changes in fair value of the swaps are recognized in accumulated other comprehensive income. As of December 31, 2022, the fair value of these instruments was an asset of $65.0 million.
Biggest changeThe company utilized expedients within ASC 848 to conclude that this amendment should be treated as a non-substantial modification of the existing contract, resulting in no impact to the company's consolidated financial statements. The company has designated these swaps as cash flow hedges and all changes in fair value of the swaps are recognized in accumulated other comprehensive income.
Changes in the market value and the related foreign exchange gains and losses are recorded in the statement of earnings. 42
Changes in the market value and the related foreign exchange gains and losses are recorded in the statement of earnings. 44
Interest Rate Risk The company is exposed to market risk related to changes in interest rates. The following table summarizes the maturity of the company's debt obligations: Variable Rate Debt 2023 $ 45,583 2024 43,788 2025 780,826 2026 1,850,752 2027 and thereafter 1,375 $ 2,722,324 The company is exposed to interest rate risk on its floating-rate debt.
Interest Rate Risk The company is exposed to market risk related to changes in interest rates. The following table summarizes the maturity of the company's debt obligations: Variable Rate Debt 2024 $ 44,822 2025 785,304 2026 1,589,014 2027 755 2028 and thereafter 5,300 $ 2,425,195 The company is exposed to interest rate risk on its floating-rate debt.
The change in fair value of these swap agreements in the first twelve months of 2022 was a gain of $61.6 million, net of taxes.
As of December 30, 2023, the fair value of these instruments was an asset of $42.8 million. The change in fair value of these swap agreements in the first twelve months of 2023 was a loss of $16.5 million, net of taxes.
The company has entered into interest rate swaps to fix the interest rate applicable to certain of its variable-rate debt. The agreements swap one-month LIBOR for fixed rates. In February 2022, the company entered into an additional floating-to-fixed interest rate swap agreement that uses a daily Secured Overnight Financing Rate ("SOFR") in lieu of LIBOR.
The company has entered into interest rate swaps to fix the interest rate applicable to certain of its variable-rate debt. Prior to July 1, 2023, the company amended its Credit Facility and the existing interest rate swap agreements to transition the interest reference rate from one-month LIBOR to one-month Secured Overnight Financing Rate ("SOFR").
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There were no other changes to the company's Credit Facility or timing of cash flows. The amendment was entered into because the LIBOR rate historically used was no longer published after June 30, 2023.

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