On November 8, 2023, The Middleby Corp (MIDD, Financial) released its third-quarter earnings report, revealing a mixed financial performance with record-setting profitability metrics amidst a slight decline in net sales. The company, a global leader in the foodservice industry, navigated through inventory de-stocking and rising interest rate challenges, which impacted near-term demand.
Financial Performance Overview
The Middleby Corp (MIDD, Financial) reported a slight decrease in net sales of 1.2% year-over-year, with organic net sales experiencing a 4.4% drop. Despite this, the company achieved a record Adjusted EBITDA of $223.7 million for the quarter, marking an $11 million increase from the previous year. The organic adjusted EBITDA margin grew to 23.0%, up from 21.4% in the prior year, reflecting improved profitability.
Income Statement Highlights
For the third quarter, The Middleby Corp (MIDD, Financial) posted net earnings of $108.65 million, translating to diluted earnings per share of $2.01. Adjusted net earnings per share reached $2.35, representing an 8% increase from the same period last year. The company's gross profit rose to $375.32 million from $365.23 million in the prior year, while operating income increased to $174.44 million from $161.70 million.
Balance Sheet and Cash Flow Statement
Operating cash flows for the quarter were notably strong at $219.2 million, compared to $84.0 million in the prior year period. Net leverage was reduced to 2.75x, and net debt decreased to $2.4 billion from $2.6 billion at the end of fiscal 2022. The Middleby Corp (MIDD, Financial) reported a borrowing availability of approximately $2.5 billion at the end of the third quarter.
Segment Performance and Strategic Acquisitions
The Commercial Foodservice and Food Processing segments reported organic net sales increases, while the Residential Kitchen segment saw a decline. The company also completed strategic acquisitions of Terry Water Solutions and Trade-Wind, which are expected to provide synergistic growth opportunities and enhance product offerings.
“We achieved solid results with growth in earnings, profits margins and cash flows. We are navigating the expected impact of inventory de-stocking at our Commercial Foodservice and Residential Kitchen segments, along with increasing headwinds from rising interest rate affecting near-term demand. Despite the challenging market conditions, we are successfully realizing the benefits from our long-term profitability goals," said Tim FitzGerald, CEO of The Middleby Corporation.
The Middleby Corp (MIDD, Financial) remains focused on its long-term growth initiatives, including the launch of industry-leading product innovations and the establishment of differentiated go-to-market sales capabilities.
Looking Ahead
While The Middleby Corp (MIDD, Financial) faces market challenges, the company's strategic acquisitions and focus on innovation position it for competitive advantage. Investors and analysts are encouraged to review the full earnings report and non-GAAP financial measures for a comprehensive understanding of the company's performance.
For more detailed information, investors can access the full earnings report and conference call through the Investor Relations section of the company's website at www.middleby.com.
Please note that this summary contains forward-looking statements, and actual results may differ materially from those expressed or implied due to various factors.
Explore the complete 8-K earnings release (here) from The Middleby Corp for further details.
