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What changed in MIDDLEBY Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MIDDLEBY Corp's 2024 and 2025 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 2025 report.

+208 added−192 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-28)

Top changes in MIDDLEBY Corp's 2025 10-K

208 paragraphs added · 192 removed · 158 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

43 edited+6 added−6 removed69 unchanged
Biggest change("Filtration Automation"), a leading manufacturer of industrial cooking oil filtration machines for the protein, snack, and fish industries, located in Mansfield, Texas.
Biggest change("Filtration Automation"), a leading manufacturer of industrial cooking oil filtration machines for the protein, snack, and fish industries, located in Mansfield, Texas. • February 2024: The company completed its acquisition of certain assets of GBT GmbH Bakery Technology ("GBT"), a company experienced in the engineering and manufacturing of high-grade industrial baking and bread lines, located in Lunen, Germany. • April 2024: The company completed its acquisition of all of the capital stock of Maxmac Comercio, Importacao, Exportacao De Maquinas E Equipmentos LTDA.
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.
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 cakes, 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.
Among the company's major competitors to the Commercial Foodservice Equipment Group are the Ali Group S.r.l.; Duke Manufacturing; AB Electrolux; Haier Group; Hoshizaki America, Inc.; Hobart Corporation and Vulcan-Hart, subsidiaries of Illinois Tool Works Inc.; Marmon Foodservice Technologies, a Berkshire Hathaway Company; Midea Group; Panasonic Corporation; Rational AG; SMEG S.p.A.; and Welbilt, Inc.
Among the company's major competitors to the Commercial Foodservice Equipment Group are the Ali Group S.r.l.; Duke Manufacturing; AB Electrolux; Haier Group; Hoshizaki America, Inc.; Hobart Corporation and Vulcan-Hart, subsidiaries of Illinois Tool Works Inc.; Marmon Foodservice Technologies, a Berkshire Hathaway Company; Midea Group; Panasonic Corporation; Rational AG and SMEG S.p.A.
The company's annual reports on Form 10-K, including this Form 10-K, as well as the company's quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports are available, free of charge, on the company's website, www.middleby.com .
The company's annual reports on Form 10-K, including this Annual Report on Form 10-K, as well as the company's quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports are available, free of charge, on the company's website, www.middleby.com .
This portfolio of equipment can be integrated to provide customers a highly efficient and customized solution. Residential Kitchen Equipment Group The Residential Kitchen Equipment Group manufactures, sells and distributes kitchen equipment for the residential market.
This portfolio of equipment can be integrated to provide customers a highly efficient and customized solution. Residential Kitchen Equipment Group The Residential Kitchen Equipment Group manufactures, sells and distributes premium kitchen equipment for the residential market.
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.
Food processing historically was highly fragmented; however, it has quickly become a highly competitive landscape with the emergence of large conglomerates that possess a variety of food brands.
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.
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, Emery Thompson, 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, Mercury, Middleby Marshall, Newton CFV, Nieco, Nu-Vu, Perfect Fry, Pitco, Powerhouse Dynamics, QualServ, RAM, Southbend, Ss Brewtech, Star, Starline, Sveba Dahlen, Synesso, Taylor, Terry, Thor, Toastmaster, TurboChef, U-Line Commercial, Ultrafryer, Varimixer, Viking Commercial, Wells, Wild Goose Filling and Wunder-Bar.
The company believes that continuing growth in demand for foodservice equipment will result from the development of new restaurant concepts in the U.S. and the expansion of U.S. and foreign chains into international markets, the replacement and upgrade of existing equipment and new equipment requirements resulting from menu changes, menu diversity and consumer food trends.
The company believes that continuing growth in demand for foodservice equipment will result from the development of new restaurant concepts in the U.S. and the expansion of U.S. and foreign chains into international markets, the replacement and upgrade of existing equipment and new equipment requirements resulting from menu changes, menu diversity, labor reallocation and consumer food trends.
Through a commitment to a diverse and engaging culture, the company is able to build a platform that promotes equal opportunities for advancement for everyone. Employee Safety The company is dedicated to providing a safe and healthy workplace by operating in accordance with established health and safety protocols.
Through a commitment to an engaging culture, the company is able to build a platform that promotes equal opportunities for advancement for everyone. Employee Safety The company is dedicated to providing a safe and healthy workplace by operating in accordance with established health and safety protocols.
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.
This commercial foodservice equipment is marketed under a portfolio of seventy-five 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, Emery Thompson, 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, Mercury, Middleby Marshall, Newton CFV, Nieco, Nu-Vu, Perfect Fry, Pitco, Powerhouse Dynamics, QualServ, RAM, Southbend, Ss Brewtech, Star, Starline, Sveba Dahlen, Synesso, Taylor, Terry, Thor, Toastmaster, TurboChef, U-Line Commercial, Ultrafryer, Varimixer, Viking Commercial, Wells, Wild Goose Filling and Wunder-Bar.
Major competitors to the Food Processing Equipment Group include AMF Bakery Systems, The GEA Group, JBT Technologies, Marel, and Provisur. The residential kitchen appliance sector is highly competitive and includes a number of large global competitors including, AB Electrolux, GE Appliances, LG Corporation, Panasonic Corporation, Samsung Group, Weber Inc., and Whirlpool Corporation.
Major competitors to the Food Processing Equipment Group include AMF Bakery Systems, Duravant, The GEA Group, JBT Marel Corporation, ProMach and Provisur. The residential kitchen appliance sector is highly competitive and includes a number of large global competitors including, AB Electrolux, GE Appliances, LG Corporation, Panasonic Corporation, Samsung Group, Weber Inc., and Whirlpool Corporation.
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.
To supplement the sales and distribution network, the company has invested in Middleby branded residential showrooms in Chicago, 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.
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.
Over the past two years, the company has completed eleven 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 ten brands to the Middleby portfolio and positioned the company as a leading provider of equipment in each respective industry.
As a global corporation, the company embraces and celebrates differences among our employees and endeavors to cultivate an environment where diversity and inclusion are core values of the organization. A Focus on Ethics The company is dedicated to promoting integrity, honesty, and professionalism in all of the business activities within the company.
As a global corporation, the company embraces and celebrates differences among our employees and endeavors to cultivate an environment where inclusion is a core value of the organization. A Focus on Ethics The company is dedicated to promoting integrity, honesty, and professionalism in all of the business activities within the company.
("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.
("Blue Sparq"), a custom hardware and software development company also offering manufacturing services, located in Cape Coral, Florida. 2 • 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. • October 2024: The company completed its acquisition of all of the capital stock of Emery Thompson Machine & Supply Co.
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.
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 28, 2024, 2,116 persons were employed within the Residential Kitchen Equipment Group.
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 .
Included in these totals were 1,298 individuals employed outside of the United States, of which 803 were management, sales, administrative and engineering personnel and 495 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, 2027 .
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.
Corporate As of December 28, 2024, 88 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.
The company invests in safety training, shares best practices, and reviews claim activity to continually review our progress in minimizing employee injury incidents in the workplace. Diversity Fostering a culture that supports diversity among employees as well as professional growth and advancement is an integral part of the company’s identity.
The company invests in safety training, shares best practices, and reviews claim activity to continually review our progress in minimizing employee injury incidents in the workplace. Culture Fostering a culture that supports employees with a wide range of perspectives and experiences as well as professional growth and advancement is an integral part of the company’s culture.
These acquisitions were not individually material and were acquired for an aggregate purchase price totaling $397.5 million, net of cash acquired.
These acquisitions were not individually material and were acquired for an aggregate purchase price totaling $224.6 million, net of cash acquired.
Over the past several decades, the commercial foodservice equipment industry has enjoyed steady growth in the United States due to the development of new quick-service and casual-theme restaurant chain concepts, the expansion of foodservice into nontraditional locations such as convenience stores and retail outlets, as well as store equipment modernization driven by efforts to improve efficiencies within foodservice operations.
The commercial foodservice equipment industry growth opportunities in the United States are driven by the development of new quick-service and casual-theme restaurant chain concepts, the expansion of foodservice into nontraditional locations such as convenience stores and retail outlets, as well as store equipment modernization driven by efforts to improve efficiencies within foodservice operations.
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.
The Commercial Foodservice Equipment Group manufactures its products in twenty-five domestic and nineteen international production facilities. The Food Processing Equipment Group manufactures its products in thirteen domestic and fourteen international production facilities. The Residential Kitchen Equipment Group manufactures its products in six domestic and five international production facilities. See Item 2.
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.
Included in these totals were 2,491 individuals employed outside of the United States, of which 1,355 were management, sales, administrative and engineering personnel, 1,036 were hourly production non-union workers and 100 were hourly production union workers, who participate in an employee cooperative.
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.
This food processing equipment is marketed under a portfolio of thirty-one brands, including Alkar, Armor Inox, Auto-Bake, Baker Thermal Solutions, Burford, Colussi Ermes, Cozzini, CV-Tek, Danfotech, Drake, Escher, Filtration Automation, GBT GmbH Bakery, Glimek, Gorreri, Hinds-Bock, Inline Filling Systems, JC Ford, Key-Log, Maurer-Atmos, Maxmac, MP Equipment, Pacproinc, Proxaut, RapidVisionPak, Scanico, Spooner Vicars, Stewart Systems, Sveba Dahlen, Thurne, and Vemac.
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, 905 were management, administrative, sales, engineering and supervisory personnel and 1,211 were hourly production workers. Included in these totals were 999 individuals employed outside of the United States, of which 496 were management, sales, administrative and engineering personnel and 503 were hourly non-union production workers. Management believes that the relationships between employees and management are good.
Marketing and Distribution Commercial Foodservice Equipment Group Middleby's products and services are marketed in the U.S. and in over 100 countries through a combination of the company's sales and marketing personnel, together with an extensive network of independent dealers, distributors, consultants, sales representatives and agents.
The Residential Kitchen Equipment Group's backlog was $112.1 million at December 30, 2023. Marketing and Distribution Commercial Foodservice Equipment Group Middleby's products and services are marketed in the U.S. and in over 100 countries through a combination of the company's sales and marketing personnel, together with an extensive network of independent dealers, distributors, consultants, sales representatives and agents.
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.
Management believes that the relationships between employees, unions and management are good. Food Processing Equipment Group As of December 28, 2024, 2,508 persons were employed within the Food Processing Equipment Group. Of this amount, 1,389 were management, administrative, sales, engineering and supervisory personnel, 1,008 were hourly production non-union workers and 111 were hourly production union members.
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 products offered by this group include conveyor ovens, combi-ovens, convection ovens, baking ovens, proofing ovens, deck ovens, high-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 1 cooking equipment, countertop cooking equipment, toasters, griddles, charcoal grills, professional mixers, stainless steel fabrication, custom millwork, professional refrigerators, blast chillers, coldrooms, ice machines, freezers, frozen dessert equipment, 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.
The company has a commitment to build its workforce from diverse backgrounds, experiences and talents among race, religion, language, nationality, disability, age and gender. Through our diverse workforce, the company is well-positioned to attract the best talent, which allows better alignment with customers and creative and efficient development of new products for the marketplace.
The company has a commitment to build its workforce from a broad range of experiences and talents. The company is well-positioned to attract the best talent from a wide range of communities, which allows better alignment with customers and creative and efficient development of new products for the marketplace.
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.
Backlog Commercial Foodservice Equipment Group The backlog of orders for the Commercial Foodservice Equipment Group was $272.2 million at December 28, 2024, most all of which is expected to be filled during 2025. The Commercial Foodservice Equipment Group's backlog was $395.2 million at December 30, 2023. The acquired Emery Thompson business accounted for $0.7 million of the backlog.
In the international markets, foodservice equipment manufacturers have been experiencing growth due to expanding international economies and increased opportunity for expansion by U.S. chains into developing regions. 3 The company believes that the worldwide commercial foodservice equipment market has sales in excess of $35.0 billion.
In the international markets, foodservice equipment manufacturers leverage growth opportunities within emerging international economies and as U.S. chains expand into developing regions. 3 The company believes that the worldwide commercial foodservice equipment market has sales in excess of $35.0 billion.
("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.
Commercial Foodservice Equipment Group • 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. • April 2023: The company completed its acquisition of all of the capital stock of Blue Sparq, Inc.
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.
Human Capital As of December 28, 2024, 10,616 persons were employed by the company and its subsidiaries among the various groups as described below. Of this amount, 5,828 employees were located in the United States and the remaining employees were located outside of the United States.
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.
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.
Principal product lines of this group are ranges, cookers, stoves, cooktops, microwaves, ovens, refrigerators, dishwashers, undercounter refrigeration, wine cellars, ice machines, beer dispensers, ventilation equipment, mixers, rotisseries and outdoor cooking equipment.
Principal product lines of this group are ranges, cookers, stoves, cooktops, microwaves, ovens, refrigerators, dishwashers, undercounter refrigeration, wine cellars, ice machines, beer dispensers, ventilation equipment, mixers, rotisseries and outdoor cooking equipment. 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.
These reports are available as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”). Business Segments and Products The company conducts its business through three principal business segments: the Commercial Foodservice Equipment Group, the Food Processing Equipment Group and the Residential Kitchen Equipment Group.
These reports are available as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”).
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.
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, GBT GmbH Bakery, Glimek, Gorreri, Hinds-Bock, Inline Filling Systems, JC Ford, Key-Log, Maurer-Atmos, Maxmac, MP Equipment, Pacproinc, Proxaut, RapidVisionPak, Scanico, Spooner Vicars, Stewart Systems, Sveba Dahlen, Thurne, and Vemac. 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, Sedona, Ss Brewtech, Stanley, Synesso, Trade-Wind, TurboChef, U-Line, Varimixer and Viking.
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.
The Food Processing Equipment Group's backlog was $250.4 million at December 30, 2023. The acquired GBT, Maxmac, JC Ford, and Gorreri businesses accounted for $58.4 million of the backlog. Residential Kitchen Equipment Group The backlog of orders for the Residential Kitchen Equipment Group was $106.7 million at December 28, 2024, all of which is expected to be filled during 2025.
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 backlog is not necessarily indicative of the level of business expected for the year. Food Processing Equipment Group The backlog of orders for the Food Processing Equipment Group was $250.7 million at December 28, 2024, which is expected to be filled by the end of fiscal 2026.
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.
The company strives to create a culture that encourages and celebrates collaboration, creativity and confidence while maintaining an environment based on ethical values. 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.
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.
Commercial Foodservice Equipment Group As of December 28, 2024, 5,904 persons were employed within the Commercial Foodservice Equipment Group. Of this amount, 2,581 were management, administrative, sales, engineering and supervisory personnel, 2,937 were hourly production non-union workers and 386 were hourly production union members.
Management believes that the relationships between employees and management are good. The company believes its success is a direct result of the people employed around the world. The company strives to create a culture that encourages and celebrates collaboration, creativity and confidence while maintaining an environment based on ethical values.
Unionized employees accounted for approximately 5% of the company’s workforce as of December 28, 2024. Management believes that the relationships between employees and management are good. The company believes its success is a direct result of the people employed around the world.
Food Processing Equipment Group • June 2022: The company completed its acquisition of all of the capital stock of Proxaut S.r.l.
("Emery Thompson"), a well-known manufacturer of frozen dessert equipment, located in Brooksville, Florida. Food Processing Equipment Group • June 2023: The company completed its acquisition of all of the capital stock of Filtration Automation, Inc.
Removed
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.
Added
Proposed Separation Transaction On February 25, 2025, the company announced its intent to separate its Food Processing business through a spin-off of the Food Processing business, under which the stock of Food Processing, as a new independent publicly traded company, will be distributed to Middleby’s shareholders.
Removed
Commercial 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.
Added
As of the date hereof, Middleby is targeting completion of the separation by early 2026, subject to certain customary conditions, including, among others, final approval by the company’s Board of Directors and the effectiveness of appropriate filings with the SEC. The spin-off of Food Processing is expected to be tax-free for U.S. federal income tax purposes.
Removed
("Proxaut"), a leader in auto guided vehicles for the food and industrial processing companies, located in Italy. • July 2022: The company completed its acquisition of all of the capital stock of CP Packaging, LLC ("CP Packaging"), a leading manufacturer of advanced high-speed vacuum packaging equipment, located in Appleton, Wisconsin. • July 2022: The company completed its acquisition of all of the capital stock of Colussi Ermes S.r.l.
Added
There can be no assurance that any separation transaction will ultimately occur or, if one does occur, of its terms or timing. Business Segments and Products The company conducts its business through three principal business segments: the Commercial Foodservice Equipment Group, the Food Processing Equipment Group and the Residential Kitchen Equipment Group.
Removed
("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.
Added
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 cakes, muffins, cookies, crackers, pastries, bread and buns.
Removed
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.
Added
(“Maxmac”), a manufacturer of food processing equipment, located in Sao Paulo, Brazil. • November 2024: The company completed its acquisition of all of the capital stock of JC Ford, Inc.
Removed
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.
Added
(“JC Ford”), a leader in chip and tortilla production systems, located in Columbia, Tennessee. • November 2024: The company completed its acquisition of all of the capital stock of Gorreri Food Processing Technology (“Gorreri”), a leading manufacturer of equipment for the baked goods industry, located near Parma, Italy.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

32 edited+11 added−3 removed120 unchanged
Biggest changeProduct 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.
Biggest changeThe 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. The company’s business exposes it to potential liability risks that arise from the manufacturing, marketing and selling of the company’s products.
Any such violations of law or improper actions could subject the company to civil or criminal investigations in the United States and in other jurisdictions, lead to substantial civil or criminal, monetary and non-monetary penalties, and related shareholder lawsuits, lead to increased costs of compliance and damage the company’s reputation. 20 The company is subject to potential liability under environmental laws.
Any such violations of law or improper actions could subject the company to civil or criminal investigations in the United States and in other jurisdictions, lead to substantial civil or criminal, monetary and non-monetary penalties, and related shareholder lawsuits, lead to increased costs of compliance and damage the company’s reputation. The company is subject to potential liability under environmental laws.
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.
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 21 certain aspects of Pillar II effective January 1, 2024, and the remaining global minimum tax rules by January 1, 2025.
The occurrence of any of these risks could cause a substantial change in the design, delay in the development, or abandonment of new technologies and products. Consequently, there can be no assurance that the company will develop new technologies superior to the company’s current technologies or successfully bring new products to market.
The occurrence of any of these risks could cause a substantial change in the design, delay in the development, or abandonment of new 14 technologies and products. Consequently, there can be no assurance that the company will develop new technologies superior to the company’s current technologies or successfully bring new products to market.
If convicted or found liable, the company could be subject to significant fines, penalties, repayments or other damages. The company’s reputation, ability to do business, and results of operations may be impaired by the improper conduct of any of its employees, agents, or business partners.
If convicted or found liable, the company could be subject to significant fines, penalties, repayments or other damages. 20 The company’s reputation, ability to do business, and results of operations may be impaired by the improper conduct of any of its employees, agents, or business partners.
In addition, the company is subject to the risk that one or more of its insurers may become insolvent or become unable to pay claims that may be made in the future. An increase in warranty expenses could adversely affect the company’s financial performance.
In addition, the company is subject to the risk that one or more of its insurers may become insolvent or become unable to pay claims that may be made in the future. 15 An increase in warranty expenses could adversely affect the company’s financial performance.
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.
The OECD and implementing countries are expected to continue to make further revisions to their legislation and release additional guidance. The trading price of the company's common stock has been volatile, and investors in the company's common stock may experience substantial losses.
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.
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 28, 2024.
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.
Fluctuations in interest rates could adversely affect the company's results of operations and financial position. The company's profitability has been and may in the future be adversely affected during any periods of unexpected or rapid increases in interest rates.
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.
Unanticipated delays in delivery of raw materials and component inventories by suppliers—including delays due to capacity constraints, labor disputes, attacks on maritime ocean shipments, impaired financial condition of suppliers, natural disasters, extreme weather patterns and climate change, pandemics or other events outside of our control— have and 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.
The company depends significantly on its key personnel. The company depends significantly on the company’s executive officers and certain other key personnel, who could be difficult to replace. While the company has employment agreements with certain key executives, the company cannot be certain that it will succeed in retaining key personnel or their services under existing agreements.
The company depends significantly on the company’s executive officers and certain other key personnel, who could be difficult to replace. While the company has an employment agreement with a key executive, the company cannot be certain that it will succeed in retaining key personnel or their services under existing agreements.
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.
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, tariffs or changes in tariff policies have and may in the future also adversely affect the company’s business and financial performance.
The company cannot be certain that the company’s operating and financial control systems, administrative infrastructure, outsourced and internal production capacity, facilities and personnel will be adequate to support the company’s future operations or to effectively adapt to future growth. If the company cannot manage the company’s growth effectively, the company’s business may be harmed.
The company cannot be certain that the company’s operating and financial control systems, administrative infrastructure, outsourced and internal production capacity, facilities and personnel will be adequate to support the company’s future operations or to effectively adapt to future growth.
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 balance sheet includes a significant amount of goodwill and indefinite life intangible assets, which represent approximately 35% and 18%, respectively, of its total assets as of December 28, 2024. 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.
Each of these factors could result in a material and adverse change in the company’s business, financial condition and results of operations. 16 The company may be unable to manage its growth. The company has recently experienced rapid growth in its business. Continued growth could place a strain on the company’s management, operations and financial resources.
Each of these factors could result in a material and adverse change in the company’s business, financial condition and results of operations. The company may be unable to manage its growth. The company has and may in the future experience rapid growth in its business, which could place a strain on the company’s management, operations and financial resources.
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.
The company maintains a revolving credit facility, which, at December 28, 2024, bore interest at 1.375% above Secured Overnight Financing Rate ("SOFR") plus a spread adjustment of 0.10% per annum.
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.
The company’s information systems, or those of its third-party service providers, have and may in the future be 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.
The company has filed numerous patent applications covering the company’s proprietary technology. Notwithstanding the precautions the company takes to protect its intellectual property rights, it is possible that third parties may copy or otherwise obtain and use the company’s proprietary technology without authorization or may otherwise infringe on the company’s rights.
The company has filed numerous patent applications covering the company’s proprietary technology. It is possible that third parties may copy or otherwise obtain and use the company’s proprietary technology without authorization or may otherwise infringe on the company’s rights.
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.
The company has union contracts with employees at its facilities in Windsor, California; Algona, Iowa; Elgin, Illinois; Easton, Pennsylvania and Lodi, Wisconsin that extend or extended through February 2027, December 2026, July 2025, June 2027 and December 2027, respectively.
At December 30, 2023, the company had $2.4 billion of borrowings and $1.6 million in letters of credit outstanding.
At December 28, 2024, the company had $2.4 billion of borrowings and $4.3 million in letters of credit outstanding.
The product, program and service needs of the company’s customers change and evolve regularly, and the company invests substantial amounts in research and development efforts to pursue advancements in a wide range of technologies, products and services.
The company is subject to risks associated with developing products and technologies, which could delay product introductions and result in significant expenditures. The product, program and service needs of the company’s customers change and evolve regularly, and the company invests substantial amounts in research and development efforts to pursue advancements in a wide range of technologies, products and services.
If the company is unable to obtain such licenses, it also may not be able to redesign the company’s products or services to avoid infringement, which could materially adversely affect the company’s business, financial condition and operating results. 19 The company may be subject to information technology system failures, network disruptions, cybersecurity attacks and breaches in data security, which may materially adversely affect the company’s operations, financial condition and operating results.
If the company is unable to obtain such licenses, it also may not be able to redesign the company’s products or services to avoid infringement, which could materially adversely affect the company’s business, financial condition and operating results.
An interruption in or the cessation of an important supply by any third party and the company’s inability to make alternative arrangements in a timely manner, or at all, could have a material adverse effect on the company’s business, financial condition and operating results. 15 The company faces risks related to health epidemics and other widespread outbreaks of contagious disease, which could significantly disrupt its operations and impact its operating results.
An interruption in or the cessation of an important supply by any third party and the company’s inability to make alternative arrangements in a timely manner, or at all, could have a material adverse effect on the company’s business, financial condition and operating results.
The company’s competitors, as well as other companies and individuals, may obtain patents related to the types of products and services the company offers or plans to offer. There can be no assurance that the company is or will be aware of all patents containing claims that may pose a risk of infringement by its products and services.
There can be no assurance that the company is or will be aware of all patents containing claims that may pose a risk of infringement by its products and services.
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.
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 depends significantly on its key personnel.
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.
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, our suppliers' or our customers' businesses due to adverse public health developments could have a material impact on our sales and operating results.
Plaintiffs in some jurisdictions have received substantial damage awards against companies based upon claims for injuries allegedly caused by the use of their products. In addition, it may be necessary for the company to recall products that do not meet approved specifications, which could result in adverse publicity as well as costs connected to the recall and loss of revenue.
In addition, it may be necessary for the company to recall products that do not meet approved specifications, which could result in adverse publicity as well as costs connected to the recall and loss of revenue.
Any such litigation, whether successful or unsuccessful, could result in substantial costs to the company and diversions of the company’s resources, either of which could adversely affect the company’s business.
Any such litigation, whether successful or unsuccessful, could result in substantial costs to the company and diversions of the company’s resources, either of which could adversely affect the company’s business. 19 Any infringement by the company of a third party's patent rights could result in litigation and adversely affect its ability to provide, or could increase the cost of providing, the company’s products and services.
Strategic and Organizational Risks The company’s acquisition, investment and alliance strategy involves risks. If the company is unable to effectively manage these risks, its business will be materially harmed. To achieve the company’s strategic objectives, the company has pursued and may continue to pursue strategic acquisitions of and investments in other companies, businesses or technologies.
If the company cannot manage the company’s growth effectively, the company’s business may be harmed. 16 Strategic and Organizational Risks The company’s acquisition, investment and alliance strategy involves risks. If the company is unable to effectively manage these risks, its business will be materially harmed.
Moreover, depending upon the nature of any transaction, the company may experience a charge to earnings, which could be material and have an adverse impact upon the market price of the company’s common stock. 18 The company’s business could suffer in the event of a work stoppage by its unionized labor force.
Moreover, depending upon the nature of any transaction, the company may experience a charge to earnings, which could be material and have an adverse impact upon the market price of the company’s common stock. 18 We are pursuing a plan separate our Food Processing business through a spin-off into an independent publicly traded company.
If the company is unable to successfully compete in this highly competitive environment, the company’s business, financial condition and operating results will be materially harmed. 14 The company is subject to risks associated with developing products and technologies, which could delay product introductions and result in significant expenditures.
Moreover, competitors may develop technologies or products that render the company’s products obsolete or less marketable. If the company is unable to successfully compete in this highly competitive environment, the company’s business, financial condition and operating results will be materially harmed.
Any infringement by the company of a third party's patent rights could result in litigation and adversely affect its ability to provide, or could increase the cost of providing, the company’s products and services. Patents of third parties may have an important bearing on the company’s ability to offer some of its products and services.
Patents of third parties may have an important bearing on the company’s ability to offer some of its products and services. The company’s competitors, as well as other companies and individuals, may obtain patents related to the types of products and services the company offers or plans to offer.
Removed
Moreover, competitors may develop technologies or products that render the company’s products obsolete or less marketable.
Added
A significant increase in the prices of steel or any other commodity, changes in trade policies, including the imposition of tariffs or other trade restrictions, have in the past and have the potential to in the future to create upward pressure on commodity prices leading to a potentially unfavorable impact on operating results.
Removed
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.
Added
The company faces risks related to health epidemics and other widespread outbreaks of contagious disease, which could significantly disrupt its operations and impact its operating results. The spread of contagious diseases or other adverse public health developments, has had a material and adverse effect on our business operations.
Removed
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.
Added
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. Plaintiffs in some jurisdictions have received substantial damage awards against companies based upon claims for injuries allegedly caused by the use of their products.
Added
To achieve the company’s strategic objectives, the company has pursued and may continue to pursue strategic acquisitions of and investments in other companies, businesses or technologies.
Added
The proposed spin-off may not be completed on the timeline currently contemplated or at all and may not achieve the intended benefits.
Added
As part of our previously-announced strategic review of our business portfolio as part of the Board’s efforts to maximize shareholder value, we have announced a plan to separate our Food Processing business through a spin-off into an independent publicly traded company, which is currently expected to be completed by early 2026.
Added
Unanticipated developments could delay or prevent the proposed spin-off or cause the proposed spin-off to occur on terms or conditions that are less favorable and/or different than expected. Even if the transaction is completed, we may not realize all or any of the anticipated benefits from the spin-off.
Added
Expenses incurred to accomplish the proposed spin-off may be significantly higher than what we currently anticipate. Executing the proposed spin-off also requires significant time and attention from management, which could distract them from other tasks in operating our business.
Added
Following the proposed spin-off, the combined value of the common stock of the two publicly traded companies may not be equal to or greater than what the value of our common stock would have been had the proposed spin-off not occurred. The company’s business could suffer in the event of a work stoppage by its unionized labor force.
Added
The company also has a union workforce at its manufacturing facility in the Philippines under a contract that extends through June 2026. Less than 1% of the company's workforce is covered by collective bargaining agreements that expire within one year.
Added
The company is subject to information technology system failures, network disruptions, cybersecurity attacks and breaches in data security, which may materially adversely affect the company’s operations, financial condition and operating results.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+1 added−0 removed13 unchanged
Biggest changeThe company’s Director of Global Information Technology is responsible for leading the assessment and management of cybersecurity risks. The current Director of Global Information Technology has over 10 years of experience in information security and holds CISSP and GIAC credentials. The Director of Global Information Technology reports to the Audit Committee and management on cybersecurity threats on a regular basis.
Biggest changeThe company’s Vice President of Global Information Technology and Information Security is responsible for leading the assessment and management of cybersecurity risks. The current Vice President of Global Information Technology and Information Security has over 10 years of experience in information security and holds CISSP and GIAC credentials.
The Director of Global Information Technology or key members of the executive leadership team update the Audit Committee periodically on the cybersecurity landscape, including the status of ongoing threats and company initiatives. 23
The Vice President of Global Information Technology and Information Security or key members of the executive leadership team update the Audit Committee periodically on the cybersecurity landscape, including the status of ongoing threats and company initiatives. 23
The company maintains a program, run by the company’s Director of Information Technology, 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.
The company maintains a program, run by the company’s Vice President of Global Information Technology and Information Security, 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.
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 from senior management on cybersecurity and information security matters.
The Audit Committee oversees the company’s cybersecurity and information security program and receives periodic updates from senior management on cybersecurity and information security matters.
Added
The Vice President of Global Information Technology and Information Security reports to the Audit Committee and management on cybersecurity threats on a regular basis. Oversight responsibility for information security matters is shared by the Board (primarily through the Audit Committee) and senior management.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−0 removed2 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 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.
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 Aug-34 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 Brooksville, FL Manufacturing, Warehouses and Offices 18,000 Owned N/A Cape Coral, FL Warehousing and Offices 14,500 Owned N/A Norcross, GA Warehousing and Offices 15,400 Leased Nov-26 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 250,000 Leased Mar-32 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 47,000 Leased Jan-34 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 Dec-26 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 200,100 Owned N/A Toronto, Canada* Manufacturing, Warehousing and Offices 87,700 Owned N/A 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 6,300 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 24 Location Principal Function Square Footage Owned/Leased Lease Expiration 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 Food Processing: Palmetto, FL Manufacturing, Warehousing and Offices 61,300 Leased Dec-30 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 95,000 Leased Oct-29 Maysville, OK Manufacturing, Warehousing and Offices 100,300 Owned N/A Souderton, PA Manufacturing, Warehousing and Offices 50,000 Owned N/A Columbia, TN Manufacturing, Warehousing and Offices 125,700 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 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 Lunen, Germany Manufacturing, Warehousing and Offices 22,800 Leased Feb-29 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 279,200 Owned N/A Casarsa della Delizia, Italy Manufacturing, Warehousing and Offices 67,300 Leased May-33 Castelnuovo Rangone, Italy** Manufacturing, Warehousing and Offices 37,900 Leased Dec-26 Piumazzo, Italy Manufacturing, Warehousing and Offices 37,200 Leased May-30 Regio Emillia, Italy Manufacturing, Warehousing and Offices 59,400 Owned N/A Vicenza.
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.
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-eight manufacturing facilities internationally.
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Italy Manufacturing, Warehousing and Offices 53,500 Leased Sep-32 Norwich, the United Kingdom Manufacturing, Warehousing and Offices 43,500 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 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 658,100 Owned N/A York, PA Warehousing and Offices 204,300 Leased Jun-30 Brown Deer, WI Manufacturing, Warehousing and Offices 155,700 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 three separate manufacturing facilities.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe 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.
Biggest changeIssuer 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) September 29, 2024 to October 26, 2024 — $ — — 4,383,636 October 27, 2024 to November 23, 2024 13,675 136.52 13,675 4,369,961 November 24, 2024 to December 28, 2024 103,851 139.75 103,851 4,266,110 Quarter ended December 28, 2024 117,526 $ 139.37 117,526 4,266,110 (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 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.
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. On April 3, 2023, in connection with the company’s purchase of all of the capital stock of Blue Sparq, Inc.
This program authorizes the company to repurchase in the aggregate up to 2,500,000 shares of its outstanding common stock. In May 2022, the company's Board of Directors approved the company to repurchase an additional 2,500,000 shares of its outstanding common stock under the current program.
This program authorizes the company to repurchase in the aggregate up to 2,500,000 shares of its outstanding common stock. In May 2022 and July 2024, the company's Board of Directors approved the company to repurchase an additional 2,500,000 shares of its outstanding common stock under the current program.
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.
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 100,425 record holders of the company's common stock as of February 24, 2025.
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.
As of December 28, 2024, the total number of shares authorized for repurchase under the program is 7,500,000. As of December 28, 2024, 3,233,890 shares had been purchased under the stock repurchase program and 4,266,110 shares remained authorized for repurchase.
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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 On October 11, 2024, in connection with the company’s purchase of all of the capital stock of Emery Thompson (“Emery Thompson”), the company issued 21,859 unregistered shares of the company’s common stock to Emery Thompson.
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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 Emery Thompson, including its status as an accredited investor, as such term is defined in Rule 501 of the Securities Act.
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On November 1, 2024, in connection with the company’s purchase of all of the capital stock of JC Ford (“JC Ford”), the company issued 14,577 unregistered shares of the company’s common stock to JC Ford. 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 company relied on such exemption based in part upon representations made by JC Ford, including its status as an accredited investor, as such term is defined in Rule 501 of the Securities Act.

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) 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 .
Biggest changeNET SALES SUMMARY (dollars in thousands) Fiscal Year Ended (1) 2024 2023 2022 Sales Percent Sales Percent Sales Percent Business Segments: Commercial Foodservice $ 2,419,236 62.4 % $ 2,521,471 62.5 % $ 2,394,762 59.4 % Food Processing $ 731,003 18.9 $ 720,618 17.8 $ 589,969 14.6 Residential Kitchen $ 724,923 18.7 $ 794,516 19.7 $ 1,048,122 26.0 Total $ 3,875,162 100.0 % $ 4,036,605 100.0 % $ 4,032,853 100.0 % (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) 2024 2023 2022 Net sales 100.0 % 100.0 % 100.0 % Cost of sales 62.1 62.0 64.1 Gross profit 37.9 38.0 35.9 Selling, general and administrative expenses 19.7 20.0 19.8 Restructuring 0.3 0.4 0.2 Impairments 1.0 1.9 — Income from operations 16.9 15.7 15.9 Interest expense and deferred financing amortization, net 2.4 3.0 2.2 Net periodic pension benefit (other than service cost & curtailment) (0.4) (0.2) (1.0) Other expense, net — 0.1 0.7 Earnings before income taxes 14.9 12.8 14.0 Provision for income taxes 3.8 2.9 3.2 Net earnings 11.1 % 9.9 % 10.8 % (1) The company's fiscal year ends on the Saturday nearest to December 31. 31 Fiscal Year Ended December 28, 2024 as Compared to December 30, 2023 NET SALES .
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.
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. New Accounting Pronouncements See Note 3(r) to the Consolidated Financial Statements for further information on the new accounting pronouncements.
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.
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. Convertible Debt The company issued convertible debt with debt and equity components.
Adverse changes in the operating environment or our inability to grow revenues at the forecasted rates may result in a material impairment charge. • In determining royalty rates for the valuation of our trademarks, we considered factors that affect the assumed royalty rates that would hypothetically be paid for the use of the trademarks.
Adverse changes in the operating environment or our inability to grow revenues at the forecasted rates may result in a material impairment charge. 39 • In determining royalty rates for the valuation of our trademarks, we considered factors that affect the assumed royalty rates that would hypothetically be paid for the use of the trademarks.
The amount of unrecognized actuarial gains and losses recognized in the current year’s operations is based on amortizing the unrecognized gains or losses for each plan that exceed the larger of 10% of the projected benefit obligation or the fair value of plan assets, also known as the corridor.
The amount of unrecognized actuarial gains and losses recognized in the current year’s operations is based on amortizing the unrecognized gains or losses for each plan that exceed the larger of 10% of the projected benefit obligation or the fair value of 40 plan assets, also known as the corridor.
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.
Excluding the impairment, the increase in operating income resulted from increased profitability driven by product mix and execution of strategic cost initiatives. 36 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.
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
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
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 .
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. . 35 GROSS PROFIT .
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.
In fiscal 2023, restructuring expenses related primarily to headcount reductions and facility consolidations within the Commercial Foodservice Equipment Group and Residential Kitchen Equipment Group. 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.
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.
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 September 29, 2024, the company identified several trademarks and trade names with indicators of potential risk for impairment and performed quantitative assessments.
The following are some of the important factors that could cause the company's actual results, performance or outcomes to differ materially from those discussed in the forward-looking statements: • changing market conditions; • volatility in earnings resulting from goodwill impairment losses, which may occur irregularly and in varying amounts; • variability in financing costs; • quarterly variations in operating results; • dependence on key customers; • risks associated with the company's foreign operations, including market acceptance and demand for the company's products and the company's ability to manage the risk associated with the exposure to foreign currency exchange rate fluctuations; • the company's ability to protect its trademarks, copyrights and other intellectual property; • the impact of competitive products and pricing; • the impact of announced management and organizational changes; • the state of the residential construction, housing and home improvement markets; • the state of the credit markets, including mortgages, home equity loans and consumer credit; • intense competition in the company's business segments including the impact of both new and established global competitors; • unfavorable tax law changes and tax authority rulings; • cybersecurity attacks and other breaches in security; • the continued ability to realize profitable growth through the sourcing and completion of strategic acquisitions; • the timely development and market acceptance of the company's products; and • the availability and cost of raw materials.
The following are some of the important factors that could cause the company's actual results, performance or outcomes to differ materially from those discussed in the forward-looking statements: • changing market conditions; • the possibility that the proposed spin-off of the company’s Food Processing business will not be consummated within the anticipated time period or at all and that the company may not realize all or any of the expected benefits of the spin-off; • volatility in earnings resulting from goodwill impairment losses, which may occur irregularly and in varying amounts; • variability in financing costs; • quarterly variations in operating results; • dependence on key customers; • risks associated with the company's foreign operations, including market acceptance and demand for the company's products and the company's ability to manage the risk associated with the exposure to foreign currency exchange rate fluctuations; • the company's ability to protect its trademarks, copyrights and other intellectual property; • the impact of competitive products and pricing; • the impact of announced management and organizational changes; • the state of the residential construction, housing and home improvement markets; • the state of the credit markets, including mortgages, home equity loans and consumer credit; • intense competition in the company's business segments including the impact of both new and established global competitors; • unfavorable tax law changes and tax authority rulings; • cybersecurity attacks and other breaches in security; • the continued ability to realize profitable growth through the sourcing and completion of strategic acquisitions; • the timely development and market acceptance of the company's products; and • the availability and cost of raw materials.
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.
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 fiscal 2024, net cash used for investing activities amounted to $158.5 million.
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 .
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.
Identifiable intangible assets are recognized separately from goodwill and include trademarks and trade names, technology, customer relationships and other specifically identifiable assets. Trademarks and trade names are deemed to be indefinite-lived. Goodwill and indefinite-lived intangible assets are not amortized but are subject to impairment testing.
Identifiable intangible assets are recognized separately from goodwill and include trademarks and trade names, technology, customer relationships and other specifically identifiable assets. Trademarks and trade names are deemed to be indefinite-lived.
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.
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.
At December 30, 2023, the company was in compliance with all covenants pursuant to its borrowing agreements.
At December 28, 2024, the company was in compliance with all covenants pursuant to its borrowing agreements.
On an annual basis on the first day of the fourth quarter, or more frequently if triggering events occur, the company performs an impairment assessment for goodwill and indefinite-lived intangible assets.
Goodwill and indefinite-lived intangible assets are not amortized but are subject to impairment testing. 38 On an annual basis on the first day of the fourth quarter, or more frequently if triggering events occur, the company performs an impairment assessment for goodwill and indefinite-lived intangible assets.
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%.
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%.
Material Cash Requirements The company's material cash requirements from contractual obligations primarily consist of long-term debt obligations, operating lease obligations, tax obligations and contingent purchase price payments to the sellers that were deferred in conjunction with various acquisitions. See Notes 3, 5 and 7 to the Consolidated Financial Statements for further information.
Material Cash Requirements The company's material cash requirements from contractual obligations primarily consist of long-term debt obligations, operating lease obligations, tax obligations and contingent purchase price payments to the sellers that were deferred in conjunction with various acquisitions.
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.
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.
Excluding acquisitions, net sales increased $348.5 million, or 10.7%, from the prior year. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars for fiscal 2022 decreased net sales by approximately $85.0 million.
Excluding acquisitions, net sales decreased $191.1 million, or 4.7%, from fiscal 2023. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars in fiscal 2024 increased net sales by approximately $0.5 million.
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.
The increase in international revenues 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 $10.4 million, or 1.4%, to $731.0 million in fiscal 2024, as compared to $720.6 million in fiscal 2023.
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.
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 reporting unit that could result in a material impairment that would adversely affect our results of operations.
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.
The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 39.6%. • Gross profit at the Food Processing Equipment Group increased by $16.2 million, or 5.9%, to $290.6 million in fiscal 2024, as compared to $274.4 million in fiscal 2023.
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.
Excluding the impact of foreign exchange and acquisitions, sales decreased 4.7% for the year, including a net sales decrease of 4.1% at the Commercial Foodservice Equipment Group, a net sales decrease of 1.9% at the Food Processing Equipment Group and a net sales decrease of 9.5% at the Residential Kitchen Equipment Group. • Net sales of the Commercial Foodservice Equipment Group decreased by $102.2 million, or 4.1%, to $2,419.3 million in fiscal 2024, as compared to $2,521.5 million in fiscal 2023.
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.
Excluding acquisitions, the net increase in domestic sales was $52.5 million, or 3.0%. 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.
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.
Restructuring expenses in fiscal 2023 related primarily to headcount reductions and facility consolidations within the Residential Kitchen Equipment Group and Commercial Foodservice Equipment Group. IMPAIRMENTS.
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%.
Excluding the impact of foreign exchange and acquisitions, net sales increased $65.8 million, or 2.7% at the Commercial Foodservice Equipment Group. 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 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 .
Excluding the impact of foreign exchange and the acquisition, the net sales decrease in international sales was $21.0 million, or 7.5%. The decrease in net sales was primarily driven by challenging market conditions domestically and in the European markets. 32 GROSS PROFIT .
During fiscal 2023, working capital changes meaningfully impacted operating cash flows primarily driven by decreased inventory levels of $157.9 million, a decrease of $110.7 million in accrued expenses and other liabilities, including impacts from the timing of payments and status of over-time revenue contracts, various customer programs and incentive programs and a decrease in accounts payable of $49.4 million.
During fiscal 2024, working capital changes contributed to operating cash flows primarily driven by decreased inventory levels of $95.4 million, offset by an increase in prepaid expenses and other assets of $45.5 million, including impacts from the timing of payments and status of over-time revenue contracts, and a decrease in accounts payable of $21.9 million.
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.
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 $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.
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%.
This includes an increase of $0.1 million from the recent acquisitions and a decrease of $2.7 million related to the unfavorable impact of exchange rates. Excluding the impact of foreign exchange and acquisitions, the net sales increase in international sales was $18.4 million, or 2.7%.
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.
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. Our capital resources have been and the company expects they will continue to be sufficient to address these challenges.
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.
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 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.
Excluding acquisitions and foreign exchange, the net sales increase in international sales was $13.3 million, or 2.1%.
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. Excluding acquisitions and foreign exchange, the net sales increase in international sales was $13.3 million, or 2.1%.
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.
This was comprised of $18.3 million to repurchase 118,171 shares of Middleby common stock that were surrendered to the company for withholding taxes related to restricted stock vestings and $16.4 million used to repurchase 117,526 shares of its common stock under a repurchase program.
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.
Net cash provided by operating activities after changes in assets and liabilities amounted to $686.8 million as compared to $628.8 million in the prior year.
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.
This compares to $254.5 million of non-cash expenses in the prior year, including $50.4 million of 33 depreciation expense, $75.0 million of intangible amortization related to acquisitions, $78.1 million of impairments and $51.0 million of stock based compensation costs. NON-OPERATING EXPENSES .
The increase in international sales reflects growth primarily driven by protein products. • Net sales of the Residential Kitchen Equipment Group increased by $310.8 million, or 42.2%, to $1,048.1 million in fiscal 2022, as compared to $737.3 million in fiscal 2021.
The increase in international sales reflects growth driven primarily by increased sales volumes of bakery and protein products in the European markets. • Net sales of the Residential Kitchen Equipment Group decreased by $69.6 million, or 8.8%, to $724.9 million in fiscal 2024, as compared to $794.5 million in fiscal 2023.
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.
See Notes 3, 5 and 7 to the Consolidated Financial Statements for further information. 37 Related Party Transactions From December 31, 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.
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.
Net sales from the acquisitions of Kloppenberg, Icetro, Marco, Flavor Burst, Blue Sparq, and Terry accounted for an increase of $57.8 million during fiscal 2023. 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 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.
Net sales from the acquisitions of CP Packaging, Colussi Ermes, Escher, and Filtration Automation accounted for an increase of $61.5 million during fiscal 2022. 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.
Selling, general and administrative expenses reflect increased costs of $33.6 million associated with acquisitions, including $5.6 million of non-cash intangible amortization expense. Selling, general and administrative expenses decreased from lower compensation costs, professional fees, and intangible amortization expense, partially offset by higher selling and marketing expenses. Foreign exchange rates had an unfavorable impact of $2.2 million. RESTRUCTURING EXPENSES.
Selling, general and administrative expenses reflect increased costs of $33.6 million associated with acquisitions, including $5.6 million of non-cash intangible amortization expense. Selling, general and administrative expenses reflect decreases in intangible amortization expense of $16.8 million, compensation costs including commissions of $7.8 million, and professional fees of $5.4 million.
Selling, general and administrative expenses increased from compensation, selling and commissions expenses, partially offset by lower professional fees and intangible amortization expense. Foreign exchange rates had a favorable impact of $15.1 million. RESTRUCTURING EXPENSES. Restructuring expenses increased $2.0 million to $9.7 million from $7.7 million in the prior year period.
Selling, general and administrative expenses reflect increased costs of $8.9 million associated with acquisitions, including $1.6 million of intangible amortization expense. Selling, general and administrative expenses decreased $31.2 million related to compensation cost including commissions, $12.3 million related to intangible amortization expense and $10.9 million in professional fees. Foreign exchange rates had a favorable impact of $0.3 million.
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.
Cash used to fund acquisitions amounted to $111.7 million. Additionally, $49.3 million was expended, primarily for upgrades of production equipment and manufacturing facilities. Proceeds from the sale of property, plant and equipment amounted to $2.5 million. FINANCING ACTIVITIES. Net cash flows used for financing activities amounted to $73.8 million in 2024.
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.
Gross profit from the acquisitions of Flavor Burst, Blue Sparq, Terry, and Emery Thompson increased gross profit by $1.5 million. Excluding acquisitions, gross profit decreased by $53.8 million related to lower sales volume. The impact of foreign exchange rates decreased gross profit by approximately $0.7 million. The gross margin rate increased to 39.6%, as compared to 40.1% in fiscal 2023.
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.
Even in light of such headwinds, we remain focused on delivering strong financial results and executing on our long-term strategy and profitability objectives. 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.
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.
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.
Excluding acquisitions and foreign exchange, the net sales increase in international sales was $73.4 million, or 12.3%.
This includes an increase of $17.4 million from the recent acquisitions and a decrease of $0.4 million related to the unfavorable impact of exchange rates. Excluding the impact of foreign exchange and acquisitions, the net sales increase in international sales was $29.3 million, or 12.1%.
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%.
Excluding the impact of foreign exchange and acquisitions, net sales decreased $102.3 million, or 4.1%, at the Commercial Foodservice Equipment Group. Domestically, the company realized a sales decrease of $118.0 million, or 6.5%, to $1,710.4 million, as compared to $1,828.4 million in fiscal 2023. This includes an increase of $2.7 million from recent acquisitions.
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 gross margin rate, excluding acquisitions and the impact of foreign exchange, was 39.8%. • Gross profit at the Residential Kitchen Equipment Group decreased by $31.4 million, or 12.6%, to $218.6 million in fiscal 2024, as compared to $250.0 million in fiscal 2023. Excluding the impact of the acquisition, gross profit decreased by $32.5 million related to lower sales volume.
The increase in operating income resulted from increased sales volumes driven by acquisitions and improved market conditions. Income from operations in 2022 included $189.3 million of non-cash expenses, including $44.6 million of depreciation expense, $86.3 million of intangible amortization related to acquisitions and $58.4 million of stock based compensation.
Excluding the impairments, the decrease in operating income was primarily related to lower sales volume. Income from operations in 2024 included $194.8 million of non-cash expenses, including $55.6 million of depreciation expense, $64.4 million of intangible amortization related to acquisitions, $38.6 million of impairments and $36.2 million of stock based compensation.
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.
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. International sales increased $77.5 million, or 47.3%, to $241.3 million, as compared to $163.8 million in the prior year.
Domestically, the company realized a sales increase of $247.5 million, or 54.5%, to $701.9 million, as compared to $454.4 million in the prior year. This includes an increase of $204.2 million from recent acquisitions. Excluding acquisitions, the net increase in domestic sales was $43.3 million, or 9.5%.
Excluding the impact of foreign exchange and acquisitions, net sales decreased $13.9 million, or 1.9%, at the Food Processing Equipment Group. Domestically, the company realized a sales decrease of $35.9 million, or 7.5%, to $443.4 million, as compared to $479.3 million in fiscal 2023. This includes an increase of $7.3 million from recent acquisitions.
The gross profit margin rate in fiscal 2022 excluding acquisitions and the impact of foreign exchange was 36.6%. SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES . Combined selling, general, and administrative expenses increased by $129.2 million to $797.2 million in fiscal 2022 from $668.0 million in 2021.
The impact of foreign exchange rates increased gross profit by approximately $1.1 million. The gross margin rate decreased to 30.2%, as compared to 31.5% in fiscal 2023 primarily related to lower sales volume. The gross margin rate, excluding the acquisition and impact of foreign exchange, was 30.1%. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES .
Excluding the impact of acquisitions, net sales of the Residential Kitchen Equipment Group increased $3.1 million, or 0.4%, as compared to the prior year. Excluding the impact of foreign exchange and acquisitions, net sales increased $31.6 million, or 4.3% at the Residential Kitchen Equipment Group.
Gross profit decreased to $1,470.4 million in fiscal 2024 as compared to $1,534.1 million in fiscal 2023, primarily driven by lower sales volumes at the Commercial Foodservice Equipment Group and Residential Kitchen Equipment Group. The impact of foreign exchange rates increased gross profit by approximately $0.3 million.
Other expense was $28.9 million during fiscal 2022 as compared to other income of $1.6 million during fiscal 2021, consisting mainly of foreign exchange losses and gains. INCOME TAXES .
Other expense was $1.5 million in fiscal 2024, as compared to $4.2 million in fiscal 2023 and consists mainly of foreign exchange gains and losses. INCOME TAXES . A tax provision of $148.9 million, at an effective rate of 25.8%, was recorded during fiscal 2024, as compared to $118.5 million at an effective rate of 22.8%, in fiscal 2023.
Income from operations increased $9.6 million to $639.6 million in fiscal 2022 from $630.0 million in fiscal 2021. Operating income as a percentage of net sales amounted to 15.9% in 2022 as compared to 19.4% in 2021. During fiscal 2021, the company received approximately $67.7 million in a termination fee, net of deal costs and taxes.
Income from operations increased $21.3 million to $656.2 million in fiscal 2024 from $634.9 million in fiscal 2023. Operating income as a percentage of net sales amounted to 16.9% in 2024 as compared to 15.7% in 2023. During fiscal 2024 and fiscal 2023, operating income included the impairment of intangible assets.
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.
As a result of the financial performance indicators for the Residential Kitchen reporting unit, the company deemed it necessary to complete a quantitative analysis. The fair value of the reporting unit exceeded its carrying value by more than 8%, thus no impairment of goodwill was recognized.
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.
The effective tax rates in 2024 and 2023 were higher than the federal tax rate of 21% primarily due to state taxes and foreign tax rate differentials. 34 Fiscal Year Ended December 30, 2023 as Compared to December 31, 2022 NET SALES .
The increase in domestic sales reflects the strong demand for our premium appliance brands. International sales increased $63.3 million, or 22.4% to $346.2 million, as compared to $282.9 million in the prior year. This includes an increase of $103.5 million from recent acquisitions and a decrease of $28.5 million related to the unfavorable impact of exchange rates.
Excluding the acquisition, the net decrease in domestic sales was $54.4 million, or 10.6%. International sales decreased $17.4 million, or 6.2%, to $263.8 million, as compared to $281.2 million in the prior year. This includes an increase of $3.6 million related to the favorable 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, the net decrease in domestic sales was $120.7 million, or 6.6%. The decrease in domestic sales is related to slow market conditions. International sales increased $15.8 million, or 2.3%, to $708.9 million, as compared to $693.1 million in the prior year.
As a percentage of net sales, selling, general and administrative expenses amounted to 19.8% in fiscal 2022 and 20.5% in fiscal 2021. Selling, general and administrative expenses reflect increased costs of $88.1 million associated with acquisitions, including $22.7 million of non-cash intangible amortization expense.
Combined selling, general and administrative expenses decreased to $762.5 million in fiscal 2024, as compared to $806.9 million in fiscal 2023. As a percentage of net sales, selling, general, and administrative expenses were 19.7% in fiscal 2024, as compared to 20.0% in fiscal 2023.
The gross value of all trademarks tested was approximately $246.2 million, including the impaired trademarks. As a result of the quantitative testing the company recognized $78.1 million of impairment charges primarily associated with the Kamado Joe, Masterbuilt and Char-Griller trademarks. For further details associated with the company's trademarks impairment testing, see Note 3 (f) to the Consolidated Financial Statements.
The gross value of all trademarks tested was approximately $255.8 million, including the impaired trademarks. As a result of the quantitative testing the company recognized $33.4 million of impairment charges primarily associated with several trademarks within the Residential Kitchen Equipment Group, as well as a few in the Commercial Foodservice Equipment Group.
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.
For further details associated with the company's trademarks impairment testing, see Note 3(f) to the Consolidated Financial Statements. The fair values of the other trademarks tested with no impairment per the analyses, and exceeded their carrying values by 10% or more.
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.
There can be no assurance that any separation transaction will ultimately occur or, if one does occur, of its terms or timing. Current Events Inflation and Interest Rate Environment The company has been negatively impacted by inflation in wages, logistics, energy, raw materials and component costs.
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.
Net sales from the acquisitions of Flavor Burst, Blue Sparq, Terry, and Emery Thompson accounted for an increase of $2.8 million during fiscal 2024. Excluding the impact of acquisitions, net sales of the Commercial Foodservice Equipment Group decreased $105.0 million, or 4.2%, as compared to fiscal 2023.
Removed
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.
Added
The company cautions readers to carefully consider the statements set forth in the section entitled "Item 1A.
Removed
Our capital resources have been and the company expects they will continue to be sufficient to address these challenges.
Added
Risk Factors" of this filing and discussion of risks included in the company's SEC filings. 29 Proposed Separation Transaction On February 25, 2025, the company announced its intent to separate its Food Processing business through a spin-off of the Food Processing business, under which the stock of Food Processing, as a new independent publicly traded company, will be distributed to Middleby’s shareholders.
Removed
Net sales from the acquisitions of Kloppenberg, Icetro, Marco, Flavor Burst, Blue Sparq, and Terry, which were acquired on April 25, 2022, June 30, 2022, December 20, 2022, January 24, 2023, April 3, 2023 and July 5, 2023, respectively, accounted for an increase of $57.8 million during fiscal 2023.
Added
As of the date hereof, Middleby is targeting completion of the separation by early 2026, subject to certain customary conditions, including, among others, final approval by the company’s Board of Directors and the effectiveness of appropriate filings with the SEC. The spin-off of Food Processing is expected to be tax-free for U.S. federal income tax purposes.
Removed
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.
Added
High inflation and uncertainty surrounding the Federal Reserve's interest rate policy decisions let to increased interest rates in 2023 and into the first quarter of 2024, which combined with global macroeconomic uncertainty, has and may continue to impact customer demand.
Removed
Net sales in fiscal 2022 increased by $782.1 million, or 24.1%, to $4,032.9 million as compared to $3,250.8 million in fiscal 2021. Net sales increased by $433.6 million, or 13.3%, from the fiscal 2021 acquisitions of Novy, Imperial, Newton CFV, Char-Griller, Kamado Joe and Masterbuilt and the fiscal 2022 acquisitions of Kloppenberg, Proxaut, Icetro, CP Packaging, Colussi, Escher, and Marco.
Added
While the company is seeing improvement on certain supply chain and logistics constraints, supply chains for certain key components remain distressed. The decreased availability of resources and inflationary costs resulted in heightened inventory levels for certain components above current demand levels.
Removed
Net sales from the acquisitions of Imperial, Newton CFV, Kloppenberg, Icetro, and Marco, which were acquired on September 24, 2021, November 16, 2021, April 25, 2022, June 30, 2022, and December 20, 2022, respectively, accounted for an increase of $84.6 million during fiscal 2022.
Added
Net sales in fiscal 2024 decreased by $161.4 million, or 4.0%, to $3,875.2 million as compared to $4,036.6 million in fiscal 2023. Net sales increased by $29.7 million, or 0.7%, from the fiscal 2023 acquisitions of Flavor Burst, Blue Sparq, Filtration Automation, Terry, and Trade-Wind and the fiscal 2024 acquisitions of GBT, MaxMac, Emery Thompson, JC Ford, and Gorreri.
Removed
Net sales from the acquisitions of Proxaut, CP Packaging, Colussi, and Escher, which were acquired on June 29, 2022, July 12, 2022, July 27, 2022, and November 10, 2022, respectively, accounted for an increase of $41.3 million during fiscal 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+2 added−1 removed9 unchanged
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.
Biggest changeThe amendment was entered into because the LIBOR rate historically used was no longer published after June 30, 2023. The 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.
Changes in the market value and the related foreign exchange gains and losses are recorded in the statement of earnings. 44
Changes in the market value and the related foreign exchange gains and losses are recorded in the statement of earnings. 42
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").
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"). There were no other changes to the company's Credit Facility or timing of cash flows.
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 change in fair value of these swap agreements in the first twelve months of 2024 was a loss of $9.6 million, net of taxes.
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.
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 2025 (1) $ 789,023 2026 1,600,151 2027 828 2028 693 2029 and thereafter 4,372 $ 2,395,067 (1) The current year debt payable includes the maturities of the convertible notes.
Removed
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.
Added
The company is exposed to interest rate risk on its floating-rate debt. The company has entered into interest rate swaps to fix the interest rate applicable to certain of its variable-rate debt.
Added
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. As of December 28, 2024, the fair value of these instruments was an asset of $30.0 million.

Other MIDD 10-K year-over-year comparisons