# The Middleby Corporation (MIDD) — Financial Analysis

**Exchange:** NASDAQ  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/MIDD/thesis · /stocks/MIDD/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: MIDD
step: "04"
title: Financial Snapshot — 3-Year P&L
created: 2026-05-29
---

### Step 04 — Financial Snapshot: 3-Year P&L

#### Income Statement Summary (GAAP)

| Metric | FY2021 | FY2022 | FY2023 |
|--------|--------|--------|--------|
| Revenue | $3,361M | $4,090M | $3,899M |
| Gross Profit | $1,183M | $1,398M | $1,386M |
| Gross Margin | 35.2% | 34.2% | 35.5% |
| Operating Income (GAAP) | $469M | $554M | $487M |
| GAAP Operating Margin | 14.0% | 13.5% | 12.5% |
| Net Income (GAAP) | $317M | $375M | $299M |
| GAAP EPS (diluted) | $5.53 | $6.56 | $5.31 |
| GAAP Diluted Shares | 57.3M | 57.2M | 56.4M |

#### Adjusted (Non-GAAP) Income Statement

| Metric | FY2021 | FY2022 | FY2023 |
|--------|--------|--------|--------|
| Revenue | $3,361M | $4,090M | $3,899M |
| Adjusted EBITDA | ~$790M | ~$910M | ~$870M |
| Adjusted EBITDA Margin | ~23.5% | ~22.2% | ~22.3% |
| Adjusted EPS | ~$8.30 | ~$9.20 | ~$8.50 |

**Note on Adjustments**: The primary GAAP-to-Adjusted EBITDA addback is **amortization of acquired intangibles**, which runs at ~$200–250M per year and reflects the significant intangible asset base created by Middleby's serial acquisitions. This is a real economic cost when viewed from an acquisition-financing perspective but is a non-cash charge that does not affect operating cash generation. Secondary addbacks include restructuring charges ($30–60M/year), stock compensation ($20–30M), and deal-related costs.

#### Margin Analysis

##### Gross Margin
- FY2021: 35.2% — strong pandemic-recovery year; pricing leverage without commensurate cost normalization
- FY2022: 34.2% — Welbilt consolidation (Welbilt gross margins were structurally lower than legacy MIDD due to more commoditized ice/refrigeration products) created 100bps dilution
- FY2023: 35.5% — gross margin recovery as input costs (steel, electronics, motors) normalized and pricing actions held; Welbilt margin improvement initiatives beginning to show

**Long-term gross margin target**: 36–38% (management has articulated 38% as achievable through Welbilt integration synergies and portfolio mix shift toward higher-margin products)

##### EBITDA Margin
- Adjusted EBITDA margin of 22–23% reflects Middleby's proven ability to convert equipment sales into cash flow
- Pre-Welbilt peak (FY2020 guidance pre-COVID): Management had guided toward 25%+ EBITDA margins
- The Welbilt dilution and backlog normalization costs have temporarily compressed margins
- Path to 25%: ~$100–150M of additional EBITDA from (1) Welbilt synergies ($50–75M target), (2) residential margin recovery, (3) operating leverage on fixed cost base as revenue recovers

##### SG&A and Operating Leverage
- SG&A runs at approximately 15–17% of revenue
- R&D investment is approximately 2–3% of revenue (not separately disclosed; embedded in COGS and SG&A)
- The brand portfolio model means Middleby carries more SG&A as a % of revenue than a single-brand equipment manufacturer — each brand has its own sales force and marketing budget
- Operating leverage is meaningful: ~$100M revenue increase ≈ $25–35M incremental EBIT (25–35% incremental margin)

#### Cash Flow Statement

| Metric | FY2021 | FY2022 | FY2023 |
|--------|--------|--------|--------|
| Operating Cash Flow | ~$480M | ~$520M | ~$620M |
| Capital Expenditures | ~$70M | ~$90M | ~$85M |
| Free Cash Flow | ~$410M | ~$430M | ~$535M |
| FCF Conversion (% of Adj. EBITDA) | ~52% | ~47% | ~61% |
| FCF per Share | ~$7.15 | ~$7.50 | ~$9.50 |

**Strong FCF generation** is a hallmark of the Middleby model. The asset-light distribution model (sells through reps and dealers, does not own restaurant equipment) and moderate CapEx intensity (~2% of revenue) translate into high FCF conversion. FY2023 showed improved FCF vs. FY2022 despite lower revenue — reflecting working capital release (inventory build during COVID chip shortages was unwound).

**FCF yield (at ~$7.5B market cap)**: ~7% based on FY2023 FCF of ~$535M — attractive on an absolute basis for a quality industrial franchise.

#### Welbilt Acquisition Impact

The $4.3B Welbilt acquisition (closed November 2022) was the defining financial event of recent years:

| Impact | Assessment |
|--------|-----------|
| Revenue added | ~$1.5–1.6B run-rate (Welbilt FY2022 revenue) |
| EBITDA margin dilution | ~100–200bps vs. legacy MIDD (Welbilt ~19% EBITDA margins vs. MIDD ~24%) |
| Goodwill created | ~$2.0–2.5B |
| Acquired intangibles | ~$1.0–1.2B (amortized over 10–20 years → $80–120M/yr addback) |
| Net debt added | ~$4.0B (purchase price - Welbilt cash - assumed debt) |
| Share dilution | Minimal — acquisition was primarily funded with debt |
| Synergy target | $50–75M annualized within 3 years (cost + revenue) |

#### Post-Pandemic Normalization — Financial Story

The "normalization" narrative is critical to understanding Middleby's financial trajectory:

- **2020**: COVID crash → revenue -17%; aggressive cost cuts preserved adj. EBITDA at ~$690M
- **2021**: Sharp recovery → revenue +27%; strong leverage on recovered volume; adj. EBITDA ~$790M
- **2022**: Super-cycle peak + Welbilt closes → revenue +22%; highest absolute EBITDA; backlog hit all-time high (~$1B+)
- **2023**: Backlog normalization → revenue -5%; adj. EBITDA -4%; FCF improved due to working capital release
- **2024E**: Bottoming process; modest revenue recovery expected; margin stability → flat to +5% adj. EPS growth
- **2025E**: Volume recovery in commercial + residential; synergy realization; path to $10+ Adjusted EPS visible

#### Key Financial Ratios (FY2023)

| Ratio | Value | Commentary |
|-------|-------|-----------|
| EV/EBITDA (Adjusted) | ~11–12x | Below historical 15–18x range; potential value opportunity |
| P/E (GAAP) | ~23–25x | Elevated due to amortization suppressing GAAP earnings |
| P/FCF | ~14x | Attractive; FCF-based valuation more appropriate for serial acquirers |
| Net Debt / EBITDA | ~3.5x | Elevated post-Welbilt; target is <3x by FY2025 |
| ROIC (adj.) | ~9–10% | Below WACC (~9%); economic profit approximately breakeven |
| ROE | ~14–16% | Reasonable but depressed vs. peak due to goodwill/intangibles base |

#### Revenue Per Employee

Middleby employs approximately 22,000–24,000 people globally (post-Welbilt). At ~$3.9B revenue, that implies ~$160–180K revenue per employee — consistent with a specialty manufacturer.

#### Conclusion

Middleby's financial profile reflects a temporarily pressured but fundamentally sound business. The combination of post-pandemic demand normalization in Commercial, a housing-driven residential trough, and Welbilt integration digestion has created a multi-year earnings headwind. However, FCF generation remains strong (~$500M+ run-rate), leverage is declining, and the path to earnings recovery is well-defined. The key valuation catalyst is either: (a) evidence of Commercial organic growth resumption, or (b) housing market recovery driving Residential rebound.

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/MIDD/fundamental

## Navigation

- Overview: /stocks/MIDD
- Financials (this page): /stocks/MIDD/financials
- Thesis: /stocks/MIDD/thesis
- Investment Memo: /stocks/MIDD/memo
- Coverage universe: /stocks