The Middleby (MIDD) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales declined 4.7% year-over-year to $991.6–$992 million, with all segments experiencing revenue declines but order growth and record operating cash flow.

• Adjusted EBITDA margin held steady at 21.8%, with net earnings at $115.4 million and adjusted EPS at $2.39.

• Orders exceeded $1 billion, the highest in two years, with four consecutive quarters of increasing orders and a 9% sequential increase.

• Operating cash flow reached a record $150 million for Q2, up significantly year-over-year.

• Management expects sequential and year-over-year revenue growth in Q3 and Q4 2024, supported by product innovation and operational efficiency.

Financial highlights

• Q2 2024 net sales: $991.6–$992 million, down 4.7% year-over-year; gross profit: $379.6 million (38.3% margin); operating income: $175.7–$176 million (17.7% margin).

• Adjusted EBITDA: $216–$216.4 million (21.8% margin); net earnings: $115–$115.4 million; adjusted net earnings: $128 million.

• Diluted EPS: $2.13; adjusted EPS: $2.39.

• Operating cash flow: $150 million in Q2, $290.4 million for the first half, up from prior year.

• Net leverage ratio improved to 2.3x, with net debt at $2.0 billion and borrowing availability of $2.9 billion.

Outlook and guidance

• Sequential and year-over-year revenue growth expected in Q3 and Q4 2024, with margin improvements anticipated in key segments.

• Commercial and Residential segments expect Q3 revenues to be in line with strong Q3 2023 levels; Residential Kitchen expects a return to double-digit margins in H2 2024.

• Commercial Foodservice targets 30% EBITDA margin within two years; Residential Kitchen targets 25% within three to four years, dependent on market recovery.

• Management remains focused on long-term strategy and profitability despite ongoing inflation, supply chain, and demand headwinds.

• Capital resources are expected to be sufficient to address ongoing challenges.