What changed in this filing

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Item 1. Business

2022-03-02 compared with 2021-03-03 · 44 added, 52 removed, 228 unchanged (30% of the section changed)

The Middleby Corporation, a Delaware corporation (“Middleby” or the “company”), through its operating subsidiary Middleby Marshall Inc., a Delaware corporation (“Middleby Marshall”) and its subsidiaries, is a leader in the design, manufacture, marketing, distribution, and service of a broad line of (i) foodservice equipment used in all types of commercial restaurants and institutional kitchens, (ii) food preparation, cooking, baking, chilling and packaging equipment for food processing operations, and (iii) premium kitchen equipment including ranges, ovens, refrigerators, ventilation and dishwashers primarily used in the residential market.

The Middleby Corporation, a Delaware corporation (“Middleby” or the “company”), through its operating subsidiary Middleby Marshall Inc., a Delaware corporation (“Middleby Marshall”) and its subsidiaries, is a leader in the design, manufacture, marketing, distribution, and service of a broad line of (i) foodservice equipment used in all types of commercial restaurants and institutional kitchens, (ii) food preparation, cooking, baking, chilling and packaging equipment for food processing operations, and (iii) premium kitchen equipment including ranges, ovens, refrigerators, ventilation, dishwashers and outdoor cooking equipment primarily used in the residential market.

Founded in 1888 as a manufacturer of baking ovens, Middleby Marshall Oven Company was acquired in 1983 by TMC Industries Ltd., a publicly traded company that changed its name in 1985 to The Middleby Corporation.

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This equipment is used across all types of foodservice operations, including quick-service restaurants, full-service restaurants, ghost kitchens, convenience stores, supermarkets, retail outlets, hotels and other institutions.

This commercial foodservice equipment is marketed under a portfolio of sixty-six brands, including Anets, APW Wyott, Bakers Pride, Beech, BKI, Blodgett, Blodgett Combi, Bloomfield, Britannia, Carter-Hoffmann, Celfrost, Concordia, CookTek, Crown, CTX, Desmon, Deutsche Beverage, Doyon, Eswood, EVO, Firex, Follett, Frifri, Giga, Globe, Goldstein, Holman, Houno, IMC, Induc, Ink Kegs, Inline Filling Systems, Jade, JoeTap, Josper, L2F, Lang, Lincat, MagiKitch’n, Market Forge, Marsal, Meheen, Middleby Marshall, MPC, Nieco, Nu-Vu, PerfectFry, Pitco, QualServ, RAM, Southbend, Ss Brewtech, Star, Starline, Sveba Dahlen, Synesso, Tank, Taylor, Thor, Toastmaster, TurboChef, Ultrafryer, Varimixer, Wells, Wild Goose and Wunder-Bar.

This commercial foodservice equipment is marketed under a portfolio of sixty-eight brands, including Anets, APW Wyott, Bakers Pride, Beech, BKI, Blodgett, Blodgett Combi, Bloomfield, Britannia, Carter-Hoffmann, Celfrost, Concordia, CookTek, Crown, CTX, Desmon, Deutsche Beverage, Doyon, Eswood, EVO, Firex, Follett, Frifri, Globe, Goldstein, Holman, Houno, IMC, Imperial, Induc, Ink Kegs, Inline Filling Systems, Jade, JoeTap, Josper, L2F, Lang, Lincat, MagiKitch’n, Market Forge, Marsal, Meheen, Middleby Marshall, MPC, Newton CFV, Nieco, Nu-Vu, PerfectFry, Pitco, QualServ, RAM, Southbend, Ss Brewtech, Star, Starline, Sveba Dahlen, Synesso, Tank, Taylor, Thor, Toastmaster, TurboChef, Ultrafryer, Varimixer, Wells, Wild Goose and Wunder-Bar.

The products offered by this group include conveyor ovens, combi-ovens, convection ovens, baking ovens, proofing ovens, deck ovens, speed cooking ovens, hydrovection ovens, ranges, fryers, rethermalizers, steam cooking equipment, food warming equipment, catering equipment, heated cabinets, charbroilers, ventless cooking systems, kitchen ventilation, induction cooking equipment, countertop cooking equipment, toasters, griddles, charcoal grills, professional mixers, stainless steel fabrication, custom millwork, professional refrigerators, blast chillers, coldrooms, ice machines, freezers, soft serve ice cream equipment, coffee and beverage dispensing equipment, home and professional craft brewing equipment, fry dispensers, bottle filling and canning equipment, and IoT solutions.

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The company can offer highly integrated full processing line solutions that provide a food processing operation a uniquely integrated solution providing for the highest level of food quality, product consistency, and reduced operating costs resulting from increased product yields, increased capacity, greater throughput and reduced labor costs through automation.

This food processing equipment is marketed under a portfolio of twenty-one brands, including Alkar, Armor Inox, Auto-Bake, Baker Thermal Solutions, Burford, Cozzini, CV-Tek, Danfotech, Deutsche Process, Drake, Glimek, Hinds-Bock, Maurer-Atmos, MP Equipment, Pacproinc, RapidPak, Scanico, Spooner Vicars, Stewart Systems, Thurne and Ve.Ma.C.

This food processing equipment is marketed under a portfolio of twenty-one brands, including Alkar, Armor Inox, Auto-Bake, Baker Thermal Solutions, Burford, Cozzini, CV-Tek, Danfotech, Drake, Glimek, Hinds-Bock, Maurer-Atmos, MP Equipment, Pacproinc, RapidPak, Scanico, Spooner Vicars, Stewart Systems, Sveba Dahlen, Thurne and Ve.Ma.C.

The products offered by this group include a wide array of cooking and baking solutions, including batch ovens, baking ovens, proofing ovens, conveyor belt ovens, continuous processing ovens, frying systems and automated thermal processing systems.

The company also provides a comprehensive portfolio of complementary food preparation equipment such as grinders, slicers, reduction and emulsion systems, mixers, blenders, formers, battering equipment, breading equipment, seeding equipment, water cutting systems, food presses, food suspension equipment, filling and depositing solutions and forming equipment, as well as a variety of automated loading and unloading systems, food safety, food handling, freezing, defrosting and packaging equipment.

The company also provides a comprehensive portfolio of complementary food preparation equipment such as tumblers, massagers, grinders, slicers, reduction and emulsion systems, mixers, blenders, formers, battering equipment, breading equipment, seeding equipment, water cutting systems, food presses, food suspension equipment, filling and depositing solutions and forming equipment, as well as a variety of automated loading and unloading systems, food safety, food handling, freezing, defrosting and packaging equipment.

This portfolio of equipment can be integrated to provide customers a highly efficient and customized solution.

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The Residential Kitchen Equipment Group manufactures, sells and distributes kitchen equipment for the residential market.

Principal product lines of this group are ranges, cookers, stoves, cooktops, microwaves, ovens, refrigerators, dishwashers, undercounter refrigeration, wine cellars, ice machines, ventilation equipment and outdoor equipment.

These products are sold and marketed under a portfolio of seventeen brands, including AGA, AGA Cookshop, Brava, EVO, La Cornue, Leisure Sinks, Lynx, Marvel, Mercury, Rangemaster, Rayburn, Redfyre, Sedona, Stanley, TurboChef, U-Line and Viking.

These products are sold and marketed under a portfolio of twenty-two brands, including AGA, AGA Cookshop, Brava, Char-Griller, EVO, Kamado Joe, La Cornue, Leisure Sinks, Lynx, Marvel, Masterbuilt, Mercury, Novy, Rangemaster, Rayburn, Redfyre, Sedona, Stanley, TurboChef, U-Line, Varimixer and Viking.

Acquisition Strategy

The company has pursued a strategy to acquire and assemble a leading portfolio of brands and technologies for each of its three business segments.

Over the past two years, the company has completed thirteen acquisitions to add to its portfolio of brands and technologies of the Commercial Foodservice Equipment Group, the Food Processing Equipment Group and the Residential Kitchen Equipment Group.

These acquisitions have added seventeen brands to the Middleby portfolio and positioned the company as a leading provider of equipment in each respective industry.

Significant acquisitions included Cooking Solutions Group Inc., acquired for a purchase price of $106.1 million, net of cash acquired.

Over the past two years, the company has completed nine acquisitions to add to its portfolio of brands and technologies of the Commercial Foodservice Equipment Group and the Residential Kitchen Equipment Group.

These acquisitions have added twelve brands to the Middleby portfolio and positioned the company as a leading provider of equipment in each respective industry.

Significant acquisitions included Novy and Kamado Joe and Masterbuilt, acquired for a purchase price of $ 250.9 million and $ 400.7 million, net of cash acquired, respectively.

All other acquisitions were acquired for an aggregate purchase price totaling $430.5 million, net of cash acquired.

Commercial Foodservice Equipment Group

• December 2018:

The company completed its acquisition of all of the capital stock of EVO America, Inc.

("EVO"), a leading design and manufacturer of ventless cooking equipment for the commercial foodservice industry, located near Portland, Oregon.

• April 2019:

The company completed its acquisition of all of the capital stock of Cooking Solutions Group, Inc.

("Cooking Solutions Group") from Standex International Corporation, which consists of the brands APW Wyott, Bakers Pride, BKI and Ultrafryer and locations in Texas, South Carolina and Mexico.

• April 2019:

The company completed the acquisition of all of the capital stock of Powerhouse Dynamics, Inc.

("Powerhouse"), a leader in cloud-based IoT solutions for the commercial foodservice industry located near Boston.

• April 2019:

The company completed the acquisition of all of the assets related to the Starline Product line ("Starline") non-carbonated beverage dispensers for the commercial foodservice industry.

The company completed the acquisition of substantially all of the assets of Ss Brewtech, a market leader in professional craft brewing and beverage equipment based in Santa Ana, California.

• November 2019:

The company completed the acquisition of all of the capital stock of Synesso, Inc.

("Synesso"), a designer and manufacturer of semi-automatic espresso machines for the commercial foodservice industry, located in Seattle, Washington.

• January 2020:

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The company completed its acquisition of the properties and assets used to conduct the business of United Foodservice Equipment Limited, a business that purchases and sells foodservice equipment located in Hong Kong, and its affiliate, Zhuhai United Foodservice Equipment Limited (collectively, "United Foodservice Equipment Zhuhai"), a business that manufactures and sells foodservice equipment located in China.

Food Processing Equipment Group

The company completed the acquisition of all of the capital stock of Packaging Progressions, Inc.

("Pacproinc"), a market leader in automated packaging technologies for customers in the protein and baker segments based in Souderton, Pennsylvania.

Residential Kitchen Equipment Group

• September 2021:

The company completed its acquisition of all of the capital stock of Imperial Commercial Cooking Equipment ("Imperial"), a manufacturer of ranges, fryers, ovens, countertop equipment, and other specialty cooking products for the commercial kitchen, located in Corona, California.

• November 2021:

The company completed its acquisition of Brava Home, Inc.

("Brava"), a company known for its advanced residential light cooking technology located in Redwood City, California.

The company completed its acquisition of all of the assets of Gate CFV Solutions, Inc.

and Newton CFV, LLC ("Newton CFV"), a business that manufactures and sells valves for beverage dispensing and other applications utilizing patented CFV technology that provides constant pressure, flow and ratio control, located in Sebastian, Florida.

Residential Kitchen Equipment Group

The company completed its acquisition of all of the capital stock of Novy Invest NV ("Novy"), a leader in cooker hoods and hobs, located in Belgium.

• December 2021:

The company completed its acquisition of all of the capital stock of A&J Structure Services, LLC ("Char-Griller"), a leader in residential outdoor charcoal and gas cooking products, located in Atlanta, Georgia.

• December 2021:

The company completed its acquisition of all of the member interests of Masterbuilt Holdings, LLC ("Kamado Joe and Masterbuilt") and their residential outdoor brands Kamado Joe and Masterbuilt, a leader in outdoor residential cooking equipment, located in the Atlanta, Georgia area.

The Customers and Market

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Customers include several large international food processing companies, which account for a significant portion of the revenues of this business segment, although none of which is greater than 10% of net sales.

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, and lunchmeats and producers of bakery products, such as muffins, cookies, crackers, pies, bread and buns;

A large portion of the company's revenues have been generated from producers of protein products such as bacon, salami, hot dogs, dinner sausages, poultry, lunchmeats and plant based/alternative protein and producers of bakery products, such as muffins, cookies, crackers, pies, bread and buns;

however, the company believes that it can leverage its expertise and product development capabilities in thermal processing to organically grow into new end markets and offers unique full processing line solutions.

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Food processors have begun to recognize the value of new technology as an important vehicle to drive productivity and profitability in their plants.

Due to customer requirements, food processors are expected to continue to demand new and innovative equipment that addresses food safety, food quality, automation and flexibility.

Due to customer requirements, food processors are expected to continue to demand new and innovative equipment that addresses food safety, food quality, automation, flexibility and sustainability.

Improving living standards in developing countries is spurring increased worldwide demand for pre-cooked and convenience food products.

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Residential Kitchen Equipment Industry

The company’s end-users include customers with high-end residential kitchens.

The market potential for such equipment has continued to broaden due to an increase in interest from the consumer to have professional styled appliances with commercial inspired, higher performing features in their home.

The company’s end-users include customers with high-end residential kitchens as well as retail dealers of residential cooking equipment.

The market potential for such equipment has continued to broaden due to an increase in interest from the consumer to have professionally styled appliances with commercial inspired, higher performing features in their home.

The kitchen has been the main area in which consumers have invested the most money over the past several decades to increase the personal satisfaction and the value of their home.

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The backlog of orders for the Commercial Foodservice Equipment Group was $881.9 million at January 1, 2022, most all of which is expected to be filled during 2022.

The Commercial Foodservice Equipment Group's backlog was $128.7 million at December 28, 2019.

The acquired Deutsche and Wild Goose businesses accounted for $27.9 million of the backlog.

The backlog is not necessarily indicative of the level of business expected for the year, as there is generally a short time between order receipt and shipment for the majority of this segment's products.

The Commercial Foodservice Equipment Group's backlog was $238.2 million at January 2, 2021.

The acquired Imperial and Newton CFV businesses accounted for $16.3 million of the backlog.

The backlog is not necessarily indicative of the level of business expected for the year and the growth in our backlog represents impacts from COVID-19 pandemic related market conditions and supply chain challenges.

Food Processing Equipment Group

The backlog of orders for the Food Processing Equipment Group was $131.2 million at January 2, 2021, all of which is expected to be filled during 2021.

The Food Processing Equipment Group's backlog was $137.8 million at December 28, 2019.

The backlog of orders for the Food Processing Equipment Group was $187.5 million at January 1, 2022, which is expected to be filled by the end of fiscal 2023.

The Food Processing Equipment Group's backlog was $131.2 million at January 2, 2021.

Residential Kitchen Equipment Group

The backlog of orders for the Residential Kitchen Equipment Group was $443.4 million at January 1, 2022, all of which is expected to be filled during 2022.

The Residential Kitchen Equipment Group's backlog was $41.0 million at December 28, 2019.

The acquired Novy, Char-Griller, and Kamado Joe and Masterbuilt businesses accounted for $152.4 million of the backlog.

The Residential Kitchen Equipment Group's backlog was $153.3 million at January 2, 2021.

Marketing and Distribution

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The company’s products are distributed through a combination of an independent network of distributors and its wholly owned distribution operations.

The company's wholly owned distribution operations include two primary customer support centers and regional warehouse and logistic operations, which stock products and service parts for the respective region.

To supplement the sales and distribution network, the company has invested in residential showrooms in Chicago, New York City, Orange County and Dallas (coming soon in 2021).

The company's wholly owned distribution operations include two primary customer support centers and regional logistic warehouse operations, which stock products and service parts for the respective region.

To supplement the sales and distribution network, the company has invested in Middleby branded residential showrooms in Chicago, New York City, Orange County, California and Dallas.

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.

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Duke Manufacturing;

Groen, a subsidiary of Dover Corporation;

AB Electrolux;

Hoshizaki America, Inc.;

Hobart Corporation and Vulcan-Hart, subsidiaries of Illinois Tool Works Inc.;

Marmon Foodservice Technologies, a Bershire Hathaway Company;

Panasonic Corporation;

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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, Electrolux, GE Appliances, LG Corporation, Panasonic Corporation, Samsung Group and Whirlpool Corporation.

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.

However, within the premium segment of this kitchen equipment market, there are fewer full line competitors and the company’s competition includes Bertazzoni;

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The company has from time to time either consolidated manufacturing facilities producing similar product or transferred production of certain products to another existing operation with a higher level of expertise or efficiency.

The Commercial Foodservice Equipment Group manufactures its products in twenty-three domestic and nineteen international production facilities.

The Commercial Foodservice Equipment Group manufactures its products in twenty-two domestic and seventeen international production facilities.

The Food Processing Equipment Group manufactures its products in eleven domestic and six international production facilities.

The Residential Kitchen Equipment Group manufactures its products in six domestic and four international production facilities.

The Residential Kitchen Equipment Group manufactures its products in six domestic and five international production facilities.

Properties for a list of the principal domestic and international manufacturing facilities by segment.

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Certain equipment and accessories are manufactured by other suppliers for sale by the company.

The company believes it enjoys good relationships with its suppliers and considers the present sources of supply to be adequate for its present and anticipated future requirements.

The company believes it enjoys good relationships with its suppliers.

The present sources of supply have been impacted by COVID-19 pandemic market conditions, however are adequate for the company's present and anticipated future requirements.

Research and Development

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The company believes that these trademarks and trade names help the company compete in the marketplace due to their recognition with customers, restaurant operators, distribution partners, sales and service agents, and foodservice consultants that specify foodservice equipment.

The company's leading portfolio of trade names of its Commercial Foodservice Equipment Group include Anets, APW Wyott, Bakers Pride, Beech, BKI, Blodgett, Blodgett Combi, Bloomfield, Britannia, Carter-Hoffmann, Celfrost, Concordia, CookTek, Crown, CTX, Desmon, Deutsche Beverage, Doyon, Eswood, EVO, Firex, Follett, Frifri, Giga, Globe, Goldstein, Holman, Houno, IMC, Induc, Ink Kegs, Inline Filling Systems, Jade, JoeTap, Josper, L2F, Lang, Lincat, MagiKitch’n, Market Forge, Marsal, Meheen, Middleby Marshall, MPC, Nieco, Nu-Vu, PerfectFry, Pitco, QualServ, RAM, Southbend, Ss Brewtech, Star, Starline, Sveba Dahlen, Synesso, Tank, Taylor, Thor, Toastmaster, TurboChef, Ultrafryer, Varimixer, Wells, Wild Goose and Wunder-Bar.

The company’s leading portfolio of trade names of its Food Processing Equipment Group include Alkar, Armor Inox, Auto-Bake, Baker Thermal Solutions, Burford, Cozzini, CV-Tek, Danfotech, Deutsche Process, Drake, Glimek, Hinds-Bock, Maurer-Atmos, MP Equipment, Pacproinc, RapidPak, Scanico, Spooner Vicars, Stewart Systems, Thurne and Ve.Ma.C.

The company’s leading portfolio of trade names of its Residential Kitchen Equipment Group include AGA, AGA Cookshop, Brava, EVO, La Cornue, Leisure Sinks, Lynx, Marvel, Mercury, Rangemaster, Rayburn, Redfyre, Sedona, Stanley, TurboChef, U-Line and Viking.

The company's leading portfolio of trade names of its Commercial Foodservice Equipment Group include Anets, APW Wyott, Bakers Pride, Beech, BKI, Blodgett, Blodgett Combi, Bloomfield, Britannia, Carter-Hoffmann, Celfrost, Concordia, CookTek, Crown, CTX, Desmon, Deutsche Beverage, Doyon, Eswood, EVO, Firex, Follett, Frifri, Globe, Goldstein, Holman, Houno, IMC, Imperial, Induc, Ink Kegs, Inline Filling Systems, Jade, JoeTap, Josper, L2F, Lang, Lincat, MagiKitch’n, Market Forge, Marsal, Meheen, Middleby Marshall, MPC, Newton CFV, Nieco, Nu-Vu, PerfectFry, Pitco, QualServ, RAM, Southbend, Ss Brewtech, Star, Starline, Sveba Dahlen, Synesso, Tank, Taylor, Thor, Toastmaster, TurboChef, Ultrafryer, Varimixer, Wells, Wild Goose and Wunder-Bar.

The company’s leading portfolio of trade names of its Food Processing Equipment Group include Alkar, Armor Inox, Auto-Bake, Baker Thermal Solutions, Burford, Cozzini, CV-Tek, Danfotech, Drake, Glimek, Hinds-Bock, Maurer-Atmos, MP Equipment, Pacproinc, RapidPak, Scanico, Spooner Vicars, Stewart Systems, Sveba Dahlen, Thurne and Ve.Ma.C.

The company’s leading portfolio of trade names of its Residential Kitchen Equipment Group include AGA, AGA Cookshop, Brava, Char-Griller, EVO, Kamado Joe, La Cornue, Leisure Sinks, Lynx, Marvel, Masterbuilt, Mercury, Novy, Rangemaster, Rayburn, Redfyre, Sedona, Stanley, TurboChef, U-Line, Varimixer and Viking.

The company holds a broad portfolio of patents and licenses covering technology and applications related to various products, equipment and systems.

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Included in these totals were 2,465 individuals employed outside of the United States, of which 1,156 were management, sales, administrative and engineering personnel, 1,163 were hourly production non-union workers and 146 were hourly production union workers, who participate in an employee cooperative.

At its Windsor, California facility, the company has a union contract with the Sheet Metal Workers International Association that expired on December 31, 2020.

Contract negotiations have extended into 2021 and are ongoing.

At its Windsor, California facility, the company has a union contract with the Sheet Metal Workers International Association that expires on December 31, 2023.

At its Elgin, Illinois facility, the company has a union contract with the International Brotherhood of Teamsters that expires on July 31, 2022.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business