MIDD Middleby Corp - 10-K

Item 1A.      Risk Factors

The company’s business, results of operations, cash flows and financial condition are subject to various risks including, but not limited to, those set forth below. Any of these risks, as well as risks not currently known to the company or that are currently deemed to be immaterial, may adversely affect the company’s business, results of operations, cash flows and financial condition. These risk factors should be carefully considered together with the other information in this Annual Report on Form 10-K, including the risks and uncertainties described under the heading Special Note Regarding Forward-Looking Statements .

Economic Risks

Current and future economic conditions could materially adversely affect the company’s business and financial performance.

The company’s operating results are impacted by the health of the North American, European, Asian and Latin American economies. The company’s business and financial performance, including collection of its accounts receivable, may be materially adversely affected by current and future economic conditions that may cause a decline in business and consumer spending, a reduction in the availability of credit and decreased growth of its existing customers, resulting in customers electing to delay the replacement of aging equipment. Higher energy costs, fluctuating interest rates, 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. For example, recent significant trade policy and tariff actions by the U.S. government and many other countries are have created significant uncertainty and potential risks for the company. The tariffs imposed to date have increased the cost of certain raw materials and components. There can be no assurance of the company’s ability to offset the impact of these tariffs, fully or at all. Furthermore, the imposition of retaliatory tariffs from other countries on the company's exported products could negatively affect demand and future sales volumes. The long-term effects of current and future tariffs and any future trade policy changes on the global economy and the industries in which the company operates remain uncertain and could have a material adverse effect on our business, results of operations or financial condition. Furthermore, the company may experience difficulties in scaling its operations due to economic pressures in the U.S. and international markets.

The company is subject to currency fluctuations and other risks from its operations outside the United States.

The company has manufacturing and distribution operations located in Asia, Europe and Latin America. The company’s operations are subject to the impact of economic downturns, political instability and foreign trade restrictions, which may adversely affect the company’s business, financial condition and operating results. The company anticipates that international sales will continue to account for a significant portion of consolidated net sales in the foreseeable future. Some sales and operating costs of the company’s foreign operations are realized in local currencies, and an increase in the relative value of the U.S. dollar against such currencies would lead to a reduction in consolidated sales and earnings. Additionally, foreign currency exposures are not fully hedged, and there can be no assurance that the company’s future results of operations will not be adversely affected by currency fluctuations. Furthermore, currency fluctuations may affect the prices paid to the company’s suppliers for materials the company uses in production. As a result, operating margins may also be negatively impacted by worldwide currency fluctuations that result in higher costs for certain cross-border transactions.

Business and Operational Risks

The company’s level of indebtedness could adversely affect its business, results of operations and growth strategy.

The company now has and may continue to have a significant amount of indebtedness. At January 3, 2026, the company had $2.2 billion of borrowings and $4.5 million in letters of credit outstanding.

To the extent the company requires additional capital resources, there can be no assurance that such funds will be available on favorable terms, or at all. The unavailability of funds could have a material adverse effect on the company’s financial condition, results of operations and ability to expand the company’s operations.

The company’s level of indebtedness could have adverse consequences to its business and operations, including the following:

• the company may be unable to obtain additional financing for working capital, capital expenditures, product development, acquisitions and other general corporate purposes;

• a significant portion of the company’s cash flow from operations must be dedicated to debt service, which reduces the amount of cash the company has available for other purposes;

• the company may be more vulnerable in the event of a downturn in the company’s business or general economic and industry conditions and have limited flexibility in planning for, or reacting to, changes in its business and/or industry;

• the company may be disadvantaged compared to its competitors that are less leveraged and thereby have greater financial flexibility; and

• the company may be restricted in its ability to make strategic acquisitions and to pursue new business opportunities.

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The company’s Credit Facility (as defined below) limits its ability to conduct business, which could negatively affect the company’s ability to finance future capital needs and engage in other business activities.

The covenants in the Credit Facility contain a number of significant limitations on its ability to, among other things:

• pay dividends;

• incur additional indebtedness;

• create liens on the company’s assets;

• engage in new lines of business;

• make investments;

• merge or consolidate; and

• acquire, dispose of, or lease assets.

These restrictive covenants, among others, could negatively affect the company’s ability to finance its future capital needs, engage in other business activities or withstand a future downturn in the company’s business or the economy.

Under the Credit Facility, the company is required to maintain certain specified financial ratios and meet financial tests, including certain ratios of secured leverage and interest coverage. The company’s ability to comply with these requirements may be affected by matters beyond its control, and, as a result, there can be no assurance that the company will be able to meet these ratios and tests. A breach of any of these covenants would prevent the company from being able to draw under the Credit Facility and would result in a default under the Credit Facility. In the event of a default under the Credit Facility, the lenders could terminate their commitments and declare all amounts borrowed, together with accrued interest and other fees, to be immediately due and payable. Borrowings under other debt instruments that contain cross-acceleration or cross-default provisions may also be accelerated and become due and payable at such time. The company may be unable to pay these debts in these circumstances.

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. The Credit Facility, at January 3, 2026, bore interest at 1.375% above Secured Overnight Financing Rate ("SOFR") plus a spread adjustment of 0.10% per annum. A significant increase in any of the forgoing rates would significantly increase the company's cost of borrowings, reduce the availability and increase the cost of obtaining new debt and refinancing existing indebtedness and/or negatively impact the market price of the company's common stock. For additional detail related to this risk, see Part II, Item 7A, "Quantitative and Qualitative Disclosure About Market Risk."

The company has a significant amount of goodwill and indefinite life intangibles, which have in the past, and could in the future, become impaired and require us to record significant impairment charges.

The company’s balance sheet includes a significant amount of goodwill and indefinite life intangible assets, which represent approximately 28% and 13%, respectively, of its total assets as of January 3, 2026. 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. In accordance with Accounting Standards Codification (“ASC”) 350 Intangibles-Goodwill and Other, the company’s long-lived assets (including goodwill and other intangibles) are reviewed for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

On December 4, 2025, the company entered into a definitive agreement to sell a 51% stake in its Residential Kitchen business to an affiliate of 26North Partners LP, and the transaction contemplated by such agreement was completed on February 2, 2026. During the third quarter of 2025, the company identified an impairment indicator impacting the fair value of Residential Kitchen Equipment Group reporting unit in connection with conducting a strategic review of its business portfolio and performed an interim quantitative impairment test as of September 27, 2025. As a result, the company recognized non-cash impairments of $709.1 million in the three month period ended September 27, 2025, primarily associated with the interim quantitative impairment tests of goodwill of the Residential Kitchen Equipment Group reporting unit and several trademarks within Residential Kitchen Equipment Group.

In assessing the recoverability of long-lived assets, the company considers changes in economic conditions and makes assumptions regarding estimated future cash flows and other factors. Various uncertainties, including continued adverse conditions in the capital markets or changes in general economic conditions, could impact the future operating performance at one or more of the company’s businesses, which could significantly affect the company’s valuations and could result in additional future impairments. Also, estimates of future cash flows are judgments based on the company’s experience and knowledge of operations. These estimates could be significantly impacted by many factors, including changes in global and local business and economic conditions, operating costs, inflation, competition, and consumer and demographic trends. If the

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company’s estimates or the underlying assumptions change in the future, the company may be required to record impairment charges that, if incurred, could have a material adverse effect on the company’s reported net earnings.

The company's defined benefit pension plans are subject to financial market risks that could adversely affect the company's results of operations and cash flows.

The performance of the financial markets and interest rates impact our defined benefit pension plan expenses and funding obligations. Significant changes in market interest rates, decreases in fair value of plan assets, investment losses on plan assets, relevant legislative and regulatory changes relating to defined benefit plan funding and changes in interest rates may increase the company's funding obligations and adversely impact its results of operations and cash flows. In addition, upward pressure on the cost of providing healthcare coverage to current employees and retirees may increase the company's future funding obligations and adversely affect its results of operations and cash flows.

The company faces intense competition in the commercial foodservice and food processing equipment industries and failure to successfully compete could impact the company’s results of operations and cash flows.

The company operates in highly competitive industries. In each of the company’s business segments, competition is based on a variety of factors including product features and design, brand recognition, reliability, durability, technology, energy efficiency, breadth of product offerings, price, customer relationships, delivery lead-times, serviceability and after-sale service. The company has numerous competitors in each business segment. Many of the company’s competitors are substantially larger and enjoy substantially greater financial, marketing, technological and personnel resources. These factors may enable them to develop similar or superior products, to provide lower cost products and to carry out their business strategies more quickly and efficiently than the company can. In addition, some competitors focus on particular product lines or geographic regions or emphasize their local manufacturing presence or local market knowledge. Some competitors have different pricing structures and may be able to deliver their products at lower prices. Although the company believes that the performance and price characteristics of its products will provide competitive solutions for its customers’ needs, there can be no assurance that the company’s customers will continue to choose the company’s products over products offered by its competitors.

Further, the markets for the company’s products are characterized by changing technology and evolving industry standards, including a focus on developing and manufacturing energy efficient products in a sustainable way. The company’s ability to compete successfully will depend, in large part, on its ability to enhance and improve its existing products, including its energy efficient products and products manufactured through a process designed to reduce emissions, to continue to bring innovative products to market in a timely fashion, to adapt the company’s products to the needs and standards of its current and potential customers and to continue to improve operating efficiencies and lower manufacturing costs. 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.

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. Also, the company continually seeks to refine and improve upon the performance, utility and physical attributes of its existing products and to develop new products. As a result, the company’s business is subject to risks associated with new product and technological development, including unanticipated technical or other problems, meeting development, production, certification and regulatory approval schedules, execution of internal and external performance plans, availability of supplier- and internally-produced parts and materials, performance of suppliers and subcontractors, hiring and training of qualified personnel, achieving cost and production efficiencies, identification of emerging technological trends in the company’s target end-markets, validation of innovative technologies, the level of customer interest in new technologies and products, and customer acceptance of the company’s products and products that incorporate technologies that the company develops. These factors involve significant risks and uncertainties. Also, any development efforts divert resources from other potential investments in the company’s businesses, and these efforts may not lead to the development of new technologies or products on a timely basis or meet the needs of the company’s customers as fully as competitive offerings. In addition, the markets for the company’s products or products that incorporate the company’s technologies may not develop or grow as the company anticipates. The company or its suppliers and subcontractors may encounter difficulties in developing and producing these new products and services, and may not realize the degree or timing of benefits initially anticipated. Due to the design complexity of the company's products, the company may in the future experience delays in completing the development and introduction of new products. Any delays could result in increased development costs or deflect resources from other projects. 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.

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Additionally, there can be no assurance that new technologies or products, if developed, will meet the company’s current price or performance objectives, be developed on a timely basis, or prove to be as effective as products based on other technologies. The inability to successfully complete the development of a product, or a determination by the company, for financial, technical or other reasons, not to complete development of a product, particularly in instances in which the company has made significant expenditures, could have a material adverse effect on the company’s financial condition and operating results.

The company depends on key customers for a material portion of its revenues. As a result, changes in the purchasing patterns or loss of one or more key customers could adversely impact the company’s operating results.

Many of the company’s key customers are large restaurant chains and major food processing companies. The demand for the company’s equipment can vary from period to period depending on the company’s customers’ internal growth plans, construction, seasonality and other factors. In addition, an adverse change to the financial condition of key customers could cause such key customers to open fewer facilities and defer purchases of new equipment for existing operations or otherwise change the purchasing patterns of such key customers. Any of these conditions or the loss of key customers could have a material adverse effect on the company’s financial condition and results of operations.

Price increases in some materials and disruptions in supply could affect the company’s profitability.

The company uses large amounts of stainless steel, aluminized steel and other commodities in the manufacture of its products. 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. 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. 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 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. 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.

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.

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. 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. 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.

The company cannot be certain that a product liability claim or series of claims brought against it would not have an adverse effect on the company’s business, financial condition or results of operations. If any claim is brought against the company, regardless of the success or failure of the claim, there can be no assurance that the company will be able to obtain or maintain product liability insurance in the future on acceptable terms or with adequate coverage against potential liabilities or the cost of a recall. The company currently maintains insurance programs consisting of self-insurance up to certain limits and excess insurance coverage for claims over established limits. There can be no assurance that the company's insurance programs will provide adequate protection against actual losses. 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.

The company offers purchasers of its products warranties covering workmanship and materials typically for one year and, in certain circumstances, for periods of up to ten years, during which periods the company or an authorized service representative will make repairs and replace parts that have become defective in the course of normal use. The company estimates and records its future warranty costs based upon past experience. These warranty expenses may increase in the future and may exceed the company’s warranty reserves, which, in turn, could adversely affect the company’s financial performance.

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The company’s financial performance is subject to significant fluctuations.

The company’s financial performance is subject to quarterly and annual fluctuations due to a number of factors, including:

• general economic conditions;

• the lengthy, unpredictable sales cycle for the commercial foodservice equipment and food processing equipment groups;

• the gain or loss of significant customers;

• unexpected delays in new product introductions;

• the level of market acceptance of new or enhanced versions of the company’s products;

• unexpected changes in the levels of the company’s operating expenses; and

• competitive product offerings and pricing actions.

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. There also will be additional demands on the company’s sales, marketing and information systems and on the company’s administrative infrastructure as it develops and offers additional products and enters new markets. 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.

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. Acquisitions and investments entail numerous risks, including, among others:

• difficulties in the assimilation of acquired businesses or technologies and the inability to fully realize some of the expected synergies or otherwise achieve anticipated revenues and profits;

• inability to operate acquired businesses or utilize acquired technologies profitably;

• the significant amount of management time and attention needed to identify, execute and integrate any acquired businesses;

• potential assumption of unknown material liabilities;

• failure to achieve financial or operating objectives;

• unanticipated costs relating to acquisitions or to the integration of acquired businesses;

• loss of customers, suppliers, or key employees; and

• the impact on the company's internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002.

The company may not be able to successfully integrate any operations, personnel, services or products that it has acquired or may acquire in the future.

The company may seek to expand or enhance some of its operations by forming joint ventures or alliances with various strategic partners throughout the world. For example, on December 4, 2025, the company announced that it had entered into a definitive agreement to sell a 51% stake in its Residential Kitchen business to an affiliate of 26North Partners LP, and the transaction contemplated by such agreement was completed on February 2, 2026. Entering into joint ventures and alliances also entails risks, including difficulties in developing and expanding the businesses of newly formed joint ventures, exercising influence over the activities of joint ventures in which the company does not have a controlling interest and potential conflicts with the company’s joint venture or alliance partners. The company cannot assure that any joint venture or alliance entered into or that may be entered into in the future will be successful.

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An inability to identify or complete future acquisitions could adversely affect future growth.

The company intends to continue its growth strategy of identifying and acquiring businesses with complementary products and services by pursuing acquisitions that provide opportunities for profitable growth. While the company continues to evaluate potential acquisitions, it may not be able to identify and successfully negotiate suitable acquisitions, obtain financing for future acquisitions on satisfactory terms, obtain regulatory approval for certain acquisitions, or otherwise complete acquisitions in the future. An inability to identify or complete future acquisitions could limit the company’s growth.

Expansion of the company’s international operations involves special challenges that it may not be able to meet. The company’s failure to meet these challenges could adversely affect its business, financial condition and operating results.

The company plans to continue to expand its international operations. The company faces certain risks inherent in doing business in international markets. These risks include:

• extensive regulations and oversight, tariffs, including with respect to certain products imported from China or exported to China, retaliatory tariffs by China and certain other countries in response to tariffs implemented by the United States, and other trade barriers;

• withdrawal from or renegotiation of international trade agreements and other restrictions on trade between the United States and China, the European Union, Canada, Mexico and other countries;

• uncertain impact on operations, suppliers and customers related to business disruptions in international jurisdictions;

• reduced protection for intellectual property rights;

• difficulties in staffing and managing foreign operations;

• potentially adverse tax consequences;

• limitations on ownership and on repatriation of earnings;

• transportation delays and interruptions;

• political, social, and economic instability and disruptions;

• labor unrests or shortages;

• potential for nationalization of enterprises; and

• limitations on the company’s ability to enforce legal rights and remedies.

In addition, the company is and will be required to comply with the laws and regulations of foreign governmental and regulatory authorities of each country in which the company conducts business.

There can be no assurance that the company will be able to succeed in marketing its products and services in international markets. The company may also experience difficulty in managing its international operations because of, among other things, competitive conditions overseas, geopolitical threats or hostilities, management of foreign exchange risk, established domestic markets, and language and cultural differences. Any of these factors could have a material adverse effect on the success of the company’s international operations and, consequently, on the company’s business, financial condition and operating results.

The impact of future transactions on the company’s common stock is uncertain.

The company periodically reviews potential transactions related to products or product rights and businesses complementary to the company’s business. Such transactions could include mergers, acquisitions, joint ventures, alliances or licensing agreements. In the future, the company may choose to enter into such transactions at any time. The impact of transactions on the market price of a company’s stock is often uncertain and may include substantial fluctuations. Consequently, any announcement of any such transaction could have a material adverse effect upon the market price of the company’s common stock. 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.

We are pursuing a plan separate our Food Processing business through a spin-off into an independent publicly traded company. The proposed spin-off may not be completed on the timeline currently contemplated or at all and may not achieve the intended benefits.

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 in the second quarter of 2026. 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. 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. Following the proposed spin-off, the combined value of

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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.

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 January 3, 2026. The company has union contracts with employees at its facilities in Windsor, California; Englewood, Colorado; Elgin, Illinois; Algona, Iowa; Easton, Pennsylvania and Lodi, Wisconsin that extend or extended through February 2027, April 2026, July 2028, December 2026, May 2027 and December 2027, respectively. 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. 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 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. The incapacity, inability or unwillingness of certain personnel to perform their services may have a material adverse effect on the company. There is intense competition for qualified personnel within the company’s industry, and there can be no assurance that the company will be able to continue to attract, motivate and retain personnel with the skills and experience needed to successfully manage the company's business and operations.

Technology and Cybersecurity Risks

The company may not be able to adequately protect its intellectual property rights, which may materially harm its business.

The company relies primarily on trade secret, copyright, service mark, trademark and patent law and contractual protections to protect the company’s proprietary technology and other proprietary 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. In some cases, including with respect to a number of the company’s most important products, there may be no effective legal recourse against duplication by competitors as the legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection. This could make it difficult for us to stop the infringement of our patents and future patents we may own, or, generally, prevent the marketing of competing products in violation of our proprietary rights. Further, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. In the future, the company may have to rely on litigation to enforce its intellectual property rights, protect its trade secrets, determine the validity and scope of the proprietary rights of others or defend against claims of infringement or invalidity. 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 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. 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. In addition, some patent applications in the United States are confidential until a patent is issued and, therefore, the company cannot evaluate the extent to which its products and services may be covered or asserted to be covered by claims contained in pending patent applications. In general, if one or more of the company’s products or services were to infringe patents held by others, the company may be required to stop developing or marketing the products or services, to obtain licenses from the holders of the patents to develop and market the services, or to redesign the products or services in such a way as to avoid infringing on the patent claims. The company cannot assess the extent to which it may be required in the future to obtain licenses with respect to patents held by others, whether such licenses would be available or, if available, whether it would be able to obtain such licenses on commercially reasonable terms. 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.

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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.

The company depends on information technology as an enabler to improve the effectiveness of its operations and to interface with its customers, as well as to maintain financial accuracy and efficiency. Information technology system failures, including suppliers’ or vendors’ system failures, have and could in the future disrupt the company’s operations by causing transaction errors, processing inefficiencies, delays or cancellation of customer orders, the loss of customers, impediments to the manufacture or shipment of products, other business disruptions, or the loss of or damage to intellectual property through a security breach.

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. Cybersecurity attacks are becoming more sophisticated and include, but are not limited to, malicious software, attempts to gain unauthorized access to data, and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of confidential or otherwise protected information, corruption or destruction of data and other manipulation or improper use of systems or networks. These events could negatively impact the company’s customers and/or reputation and lead to financial losses from remediation actions, loss of business, production downtimes, operational delays or potential liability, penalties, fines or other increases in expense, all of which may have a material adverse effect on the company’s business. In addition, as security threats and cybersecurity and data privacy and protection laws and regulations, including those related to the collection, storage, handling, use, disclosure, transfer, and security of personally identifiable information, continue to evolve and become more sophisticated, we may invest additional resources in the security of our systems. Any such increased investment could materially increase our costs and adversely affect our financial condition or results of operations. Further, as governmental authorities around the world continue to consider legislative and regulatory proposals concerning data protection in addition to those already in place, we are and may continue to be subject to substantial penalties if we fail to comply with data protection laws and regulations.

Tax, Legal and Regulatory Risks

The company may be subject to litigation, tax, and other legal compliance risks.

In addition to product liability claims, the company is subject to a variety of litigation, tax, and other legal compliance risks. These risks include, among other things, possible liability relating to personal injuries, intellectual property rights, contract-related claims, taxes and compliance with U.S. and foreign export laws, competition laws, and laws governing improper business practices. The company or one of its business units could be charged with wrongdoing as a result of such matters. 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.

While the company strives to maintain high standards, the company cannot provide assurance that its internal controls and compliance systems will always protect the company from acts committed by its employees, agents, or business partners that violate U.S. and/or foreign laws or fail to protect the company’s confidential information, including the laws governing payments to government officials, bribery, fraud, anti-kickback and false claims rules, competition, export and import compliance, money laundering, and data privacy laws, as well as the improper use of proprietary information or social media. 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.

The company’s operations are regulated by a number of federal, state and local environmental laws and regulations that govern, among other things, the discharge of hazardous materials into the air and water as well as the handling, storage and disposal of these materials. Compliance with these environmental laws and regulations is a significant consideration for the company because it uses hazardous materials in its manufacturing processes. In addition, because the company is a generator of hazardous wastes, even if it fully complies with applicable environmental laws, it may be subject to financial exposure for costs associated with an investigation and remediation of sites at which it has arranged for the disposal of hazardous wastes if these sites become contaminated. In the event of a violation of environmental laws, the company could be held liable for damages and for the costs of remedial actions. Environmental laws could also become more stringent over time, imposing greater compliance costs and increasing risks and penalties associated with any violation, which could negatively affect the company’s operating results. There can be no assurance that identification of presently unidentified environmental conditions, more vigorous enforcement by regulatory authorities or other unanticipated events will not arise in the future resulting in additional

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environmental liabilities, compliance costs and penalties that could be material. Environmental laws and regulations are constantly evolving, and it is impossible to accurately predict the effect they may have upon the financial condition, results of operations, or cash flows of the company.

We are subject to risks associated with climate change legislation, regulation and international accords. In addition, failure to achieve or demonstrate progress towards our climate goals may expose us to liability and reputational harm.

Government mandates, standards or regulations intended to reduce greenhouse gas emissions or projected climate change impacts have resulted in, and are likely to continue resulting in, increased energy, manufacturing, transportation and raw material costs. Governmental requirements directed at regulating greenhouse gas emissions could cause us to incur expenses that we cannot recover or that will require us to increase the price of products we sell, which could impact the demand for those products.

Additionally, as discussed further in our 2023 Sustainability Report and 2024 and 2025 Sustainability Metrics Updates, accessible at www.middleby.com/sustainability, we have made commitments to reduce the environmental impact of our operations and provide sustainable solutions to our customers, including setting targets for reducing our Greenhouse Gas (“GHG”) emission and consumption of non-renewable resources. There can be no assurance that we will achieve our climate-related goals on the timeline anticipated or at all. Further, future events or circumstances could lead us to prioritize other business interests over progressing toward our current climate goals due to factors such as business strategy, economic conditions, regulatory changes or pressure from stakeholders. If we fail or are perceived to fail to progress toward achieving our climate-related goals and commitments or if our investors, customers or other stakeholders become dissatisfied with the level of GHG emissions produced by our production process or our products, we could face adverse publicity, which could have a material adverse impact on our business, financial condition and results of operations

Unfavorable tax law changes and tax authority rulings may adversely affect financial results.

The company is subject to income taxes in the United States and in various foreign jurisdictions. Domestic and international tax liabilities are based on the income and expenses in various tax jurisdictions. The amount of the company’s income and other tax liability is subject to ongoing audits by U.S. federal, state and local tax authorities and by non-U.S. authorities. If these audits result in assessments different from amounts recorded, future financial results may include unfavorable tax adjustments.

In December 2021, The Organisation for Economic Co-operation and Development ("OECD") issued Pillar II model rules which would establish a global per-country minimum tax of 15%. While it is uncertain whether the United States will enact legislation to adopt Pillar II, numerous countries have enacted legislation effective in 2024 and 2025, or have indicated their intent to adopt legislation, to implement certain aspects of Pillar II tax rules. The OECD and implementing countries are expected to continue to make further revisions to their legislation and release additional guidance.

In recent years, the OECD has issued Administrative Guidance, including the most recent agreement to a side-by-side system released on January 5, 2026. The side-by-side agreement is intended to complement the OECD’s Pillar II model rules with the addition of new safe harbors, as well as other simplification measures, that are designed to provide clarity and reduce compliance complexity for eligible multinational companies. The Administrative Guidance generally requires further legislative or regulatory action to be effective. These potential changes increase tax uncertainty and may impact income tax expense in future years. The company will continue to monitor pending legislation and implementation by individual countries and evaluate the potential impact on the company's business in future periods.

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 trading price of the company's common stock has been volatile and may become volatile again in the future. The trading price of the company's common stock could decline or fluctuate in response to a variety of factors, including:

• the company's failure to meet the performance estimates of securities analysts;

• changes in buy/sell recommendations by securities analysts;

• fluctuations in the company's operating results;

• substantial sales of the company's common stock;

• general stock market conditions; or

• other economic or external factors.

Item 7.      Management’s Discussion and Analysis of Financial Condition and Results of Operations

Special Note Regarding Forward-Looking Statements

This report contains "forward-looking statements" subject to the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which could cause the company's actual results, performance or outcomes to differ materially from those expressed or implied in the forward-looking statements. 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 and tariffs;

• 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 credit markets and consumer credit;

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• 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 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.

Discontinued Operations

On December 4, 2025, the company entered into a partnership interest purchase agreement to sell a 51% stake in its Residential Kitchen Equipment Group to an affiliate of 26North Partners LP in a transaction valuing the business at $885 million (the “Residential Transaction”).

The Residential Transaction was completed on February 2, 2026. Following the close of the Residential Transaction, the company owns a 49% non-controlling interest in a new standalone joint venture holding the business. The company received net cash proceeds of approximately $565 million and a $135 million promissory note from the joint venture, subject to future closing adjustments.

The results of the Residential Kitchen Equipment Group are presented as discontinued operations in the company’s Consolidated Financial Statements. The Residential Kitchen Equipment Group was historically presented as a reportable segment. See Notes 1 and 12 to the Consolidated Financial Statements for further details.

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. As of the date hereof, Middleby is targeting completion of the separation in the second quarter of 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. There can be no assurance that any separation transaction will ultimately occur or, if one does occur, of its terms or timing.

Current Events

The current domestic and international political environment has contributed to uncertainty surrounding the future state of the global economy. Recent significant trade policy and tariff actions by the U.S. government and many other countries have created significant uncertainty and potential risks for the company. The tariffs imposed to date have increased the cost of certain raw materials and components, and while the company is actively exploring opportunities to mitigate these increased costs, there can be no assurance of the company’s ability to offset the impact of these tariffs fully. Furthermore, the imposition of retaliatory tariffs from other countries on the company's exported products could negatively affect demand and future sales volumes. The long-term effects of current and future tariffs and any future trade policy changes on the global economy and the industries in which the company operates remain uncertain and could have a material adverse effect on our financial statements in any particular reporting period. Even in light of such headwinds, we remain focused on delivering strong financial results and executing on our long-term strategy and profitability objectives, as well as continuing to identify operational efficiencies in all aspects of our business.

In addition to tariffs, the company has been negatively impacted by inflation in wages, logistics, energy, raw materials and component costs. 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. Recently announced interest rate cuts are expected to reduce demand headwinds in the long term; however consumer demand in the near term has and may continue to be impacted by higher inflation levels and uncertainty surrounding the Federal Reserve’s future interest rate policy decisions.

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 and uncertain given trade policy and tariff actions. 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

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and reliability. Our capital resources have been and the company expects they will continue to be sufficient to address these challenges.

Net Sales Summary (dollars in thousands)

Fiscal Year Ended (1)

Sales

Percent

Sales

Percent

Sales

Percent

Business Segments:

Commercial Foodservice

Food Processing

Total

(1) The company's fiscal year ends on the Saturday nearest to December 31.

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)

Net sales

Cost of sales

Gross profit

Selling, general and administrative expenses

Restructuring

Impairments

Income from continuing operations

Interest expense and deferred financing amortization, net

Net periodic pension benefit (other than service cost & curtailment)

Other expense, net

Earnings from continuing operations before income taxes

Provision for income taxes

Net earnings from continuing operations

(Loss)/earnings from discontinued operations, net of tax

Net (loss)/earnings

(1) The company's fiscal year ends on the Saturday nearest to December 31.

Fiscal Year Ended January 3, 2026 as Compared to December 28, 2024

Net Sales

Net sales in fiscal 2025 increased by $51.0 million, or 1.6%, to $3,201.2 million as compared to $3,150.2 million in fiscal 2024. Net sales increased by $107.3 million, or 3.4%, from the fiscal 2024 acquisitions of GBT GmbH Bakery, MaxMac, Emery Thompson, JC Ford, and Gorreri and the fiscal 2025 acquisitions of Frigomeccanica and Oka. Excluding acquisitions, net sales decreased $56.3 million, or 1.8%, from fiscal 2024. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars in fiscal 2025 increased net sales by approximately $18.7 million. Excluding the impact of foreign exchange and acquisitions, sales decreased 2.4% for the year, including a net sales decrease of 1.7% at the Commercial Foodservice Equipment Group and a net sales decrease of 4.5% at the Food Processing Equipment Group.

• Net sales of the Commercial Foodservice Equipment Group decreased by $29.4 million, or 1.2%, to $2,351.0 million in fiscal 2025, as compared to $2,380.4 million in fiscal 2024. Excluding the impact of the acquisition, net sales of the Commercial Foodservice Equipment Group decreased $35.7 million, or 1.5%, as compared to fiscal 2024. Excluding the impact of foreign exchange and the acquisition, net sales decreased $40.5 million, or 1.7%, at the Commercial Foodservice Equipment Group. Domestically, the company realized a sales decrease of $24.0 million, or 1.4%, to $1,681.9 million, as compared to $1,705.9 million in fiscal 2024. Excluding the acquisition, the net decrease in

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domestic sales was $30.1 million, or 1.8%. The decrease in domestic sales is related to slower market conditions particularly with lower chain customer store traffic and replacement demands. International sales decreased $5.4 million, or 0.8%, to $669.1 million, as compared to $674.5 million in the prior year. Excluding the impact of foreign exchange and the acquisition, the net sales decrease in international sales was $10.4 million, or 1.5%. The decrease in international sales is related to slow market conditions, primarily in the Latin American markets.

• Net sales of the Food Processing Equipment Group increased by $80.4 million, or 10.4%, to $850.2 million in fiscal 2025, as compared to $769.8 million in fiscal 2024. Net sales from the acquisitions of GBT GmbH Bakery, MaxMac, JC Ford, Gorreri, Frigomeccanica, and Oka accounted for an increase of $101.0 million during fiscal 2025. Excluding the impact of acquisitions, net sales of the Food Processing Equipment Group decreased $20.6 million, or 2.7%, as compared to fiscal 2024. Excluding the impact of foreign exchange and acquisitions, net sales decreased $34.5 million, or 4.5%, at the Food Processing Equipment Group. Domestically, the company realized a sales increase of $30.0 million, or 6.7%, to $477.9 million, as compared to $447.9 million in fiscal 2024. This includes an increase of $41.1 million from recent acquisitions. Excluding acquisitions, the net decrease in domestic sales was $11.1 million, or 2.5%. The decrease in domestic sales is driven by decreased sales volumes of protein and bakery products. International sales increased $50.4 million, or 15.7%, to $372.3 million, as compared to $321.9 million in the prior year. This includes an increase of $59.9 million from the recent acquisitions and an increase of $13.9 million related to the favorable impact of exchange rates. Excluding the impact of foreign exchange and acquisitions, the net sales decrease in international sales was $23.4 million, or 7.3%. The decrease in international sales reflects decreased sales volumes of bakery and protein products in the European markets.

Gross Profit

Gross profit increased to $1,251.9 million in fiscal 2025 as compared to $1,251.8 million in fiscal 2024. The impact of foreign exchange rates increased gross profit by approximately $8.2 million. The gross margin rate was 39.1% in 2025 as compared to 39.7% in 2024, primarily related to product mix at the Food Processing Equipment Group and an adverse impact from tariffs.

• Gross profit at the Commercial Foodservice Equipment Group increased by $0.6 million, or 0.1%, to $944.1 million in fiscal 2025, as compared to $943.5 million in fiscal 2024. Excluding the acquisition, gross profit decreased by $3.4 million related to lower sales volume. The impact of foreign exchange rates increased gross profit by approximately $2.4 million. The gross margin rate increased to 40.2%, as compared to 39.6% in fiscal 2024. The gross margin rate, excluding the acquisition and the impact of foreign exchange, was 40.1%.

• Gross profit at the Food Processing Equipment Group increased by $3.5 million, or 1.1%, to $308.9 million in fiscal 2025, as compared to $305.4 million in fiscal 2024. Gross profit from the acquisitions of GBT GmbH Bakery, MaxMac, JC Ford, Gorreri, Frigomeccanica, and Oka increased gross profit by $30.4 million. Excluding acquisitions, gross profit decreased by $26.9 million due to lower sales volume and product mix. The impact of foreign exchange rates increased gross profit by approximately $5.8 million. The gross margin rate decreased to 36.3%, as compared to 39.7% in fiscal 2024 primarily related to product mix. The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 37.1%.

Selling, General and Administrative Expenses

Combined selling, general and administrative expenses increased to $663.2 million in fiscal 2025, as compared to $590.1 million in fiscal 2024. As a percentage of net sales, selling, general, and administrative expenses were 20.7% in fiscal 2025, as compared to 18.7% in fiscal 2024.

Selling, general and administrative expenses reflect increased costs of $24.0 million associated with acquisitions, including $4.9 million of intangible amortization expense. Selling, general and administrative expenses reflect increases in strategic transaction costs of $19.8 million, combined compensation costs and share-based compensation of $12.5 million, advertising and trade show expenses of $9.2 million, commissions of $5.9 million, travel expenses of $3.2 million and professional fees of $2.1 million. This was partially offset by a decrease of $7.0 million related to intangible amortization expenses. Foreign exchange rates had an unfavorable impact of $3.1 million.

Restructuring Expenses

Restructuring expenses decreased $4.9 million to $3.3 million in fiscal 2025 from $8.2 million in fiscal 2024. Restructuring expenses in fiscal 2025 and fiscal 2024 related primarily to headcount reductions and facility consolidations within both segments.

Impairments

In fiscal 2025, the company recognized non-cash impairment of $10.6 million primarily associated with certain trademarks in the Commercial Foodservice Equipment Group and Food Processing Equipment Group in conjunction with diminution of values as we assessed recent market conditions and future business plans. In fiscal 2024, the company recognized non-cash

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impairment of $10.5 million which consisted of $5.2 million impairment of certain trademarks within the Commercial Foodservice Equipment Group and an impairment charge of $5.3 million associated with the decline in recoverable value of an equity method investment. See Note 3(f) to the Consolidated Financial Statements for further information on the annual impairment testing.

Income from Continuing Operations

Income from continuing operations decreased $69.2 million to $574.9 million in fiscal 2025 from $644.1 million in fiscal 2024. Income from continuing operations as a percentage of net sales amounted to 18.0% in 2025 as compared to 20.5% in 2024. During fiscal 2025 and fiscal 2024, income from continuing operations included the impairment of intangible assets. Excluding the impairments, the decrease in operating income was primarily related to higher selling, general and administrative expenses.

Income from continuing operations in 2025 included $123.1 million of non-cash expenses, including $43.7 million of depreciation expense, $55.3 million of intangible amortization related to acquisitions, $10.6 million of impairments and $13.5 million of stock based compensation. This compares to $139.4 million of non-cash expenses in the prior year, including $39.8 million of depreciation expense, $57.2 million of intangible amortization related to acquisitions, $10.5 million of impairments and $31.9 million of stock based compensation costs.

Non-operating Expenses

Interest and deferred financing amortization costs were $93.8 in fiscal 2025, as compared to $93.4 million in fiscal 2024. Net periodic pension benefit decreased $8.6 million to $6.3 million in fiscal 2025, as compared to $14.9 million in fiscal 2024, related to the increase in discount rates used to calculate interest costs and a decrease in expected return on assets. Other expense was $5.1 million in fiscal 2025, as compared to $0.5 million in fiscal 2024 and consists mainly of foreign exchange gains and losses.

Income Taxes

A tax provision of $115.0 million, at an effective rate of 23.8%, was recorded during fiscal 2025, as compared to $145.1 million at an effective rate of 25.6%, in fiscal 2024. The effective tax rates in 2025 and 2024 were higher than the federal tax rate of 21% primarily due to state taxes and foreign tax rate differentials.

(Loss)/Earnings from Discontinued Operations, Net of Tax

Loss from discontinued operations, net of tax, was $645.0 million during fiscal 2025, as compared to earnings from discontinued operations, net of tax, of $7.5 million during fiscal 2024. The fiscal 2025 loss includes impairments of $709.1 million and a loss on classification as held for sale of $62.8 million, as compared to impairments of $28.2 million during fiscal 2024. See Note 12 to the Consolidated Financial Statements for further details.

Fiscal Year Ended December 28, 2024 as Compared to December 30, 2023

Net Sales

Net sales in fiscal 2024 decreased by $91.9 million, or 2.8%, to $3,150.2 million as compared to $3,242.1 million in fiscal 2023. Net sales increased by $27.5 million, or 0.8%, from the fiscal 2023 acquisitions of Flavor Burst, Blue Sparq, Filtration Automation and Terry and the fiscal 2024 acquisitions of GBT, MaxMac, Emery Thompson, JC Ford, and Gorreri. Excluding acquisitions, net sales decreased $119.4 million, or 3.7%, from fiscal 2023. The impact of foreign exchange rates on foreign sales translated into U.S. Dollars in fiscal 2024 decreased net sales by approximately $3.1 million. Excluding the impact of foreign exchange and acquisitions, sales decreased 3.6% for the year, including a net sales decrease of 4.2% at the Commercial Foodservice Equipment Group and a net sales decrease of 1.5% at the Food Processing Equipment Group.

• Net sales of the Commercial Foodservice Equipment Group decreased by $104.9 million, or 4.2%, to $2,380.4 million in fiscal 2024, as compared to $2,485.3 million in fiscal 2023. 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 $107.7 million, or 4.3%, as compared to fiscal 2023. Excluding the impact of foreign exchange and acquisitions, net sales decreased $104.8 million, or 4.2%, at the Commercial Foodservice Equipment Group. Domestically, the company realized a sales decrease of $117.1 million, or 6.4%, to $1,705.9 million, as compared to $1,823.0 million in fiscal 2023. This includes an increase of $2.7 million from recent acquisitions. Excluding acquisitions, the net decrease in domestic sales was $119.8 million, or 6.6%. The decrease in domestic sales is related to slow market conditions. International sales increased $12.2 million, or 1.8%, to $674.5 million, as compared to $662.3 million in the prior year. This includes an increase of $0.1 million from the recent acquisitions and a decrease of $2.9 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 $15.0 million, or 2.3%. The increase in international revenues is related to improvements in market conditions, primarily in the European and Latin American markets.

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• Net sales of the Food Processing Equipment Group increased by $13.0 million, or 1.7%, to $769.8 million in fiscal 2024, as compared to $756.8 million in fiscal 2023. Net sales from the acquisitions of Filtration Automation, GBT, MaxMac, JC Ford, and Gorreri accounted for an increase of $24.7 million during fiscal 2024. Excluding the impact of acquisitions, net sales of the Food Processing Equipment Group decreased $11.7 million, or 1.5%, as compared to fiscal 2023. Excluding the impact of foreign exchange and acquisitions, net sales decreased $11.5 million, or 1.5%, at the Food Processing Equipment Group. Domestically, the company realized a sales decrease of $36.8 million, or 7.6%, to $447.9 million, as compared to $484.7 million in fiscal 2023. This includes an increase of $7.3 million from recent acquisitions. Excluding acquisitions, the net decrease in domestic sales was $44.1 million, or 9.1%. The decrease in domestic sales is driven primarily by lower sales volumes of protein products. International sales increased $49.9 million, or 18.3%, to $322.0 million, as compared to $272.1 million in the prior year. This includes an increase of $17.4 million from the recent acquisitions and a decrease of $0.2 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 $32.7 million, or 12.0%. The increase in international sales reflects growth driven primarily by increased sales volumes of bakery and protein products in the European markets.

Gross Profit

Gross profit decreased to $1,251.8 million in fiscal 2024 as compared to $1,284.1 million in fiscal 2023, primarily driven by lower sales volumes at the Commercial Foodservice Equipment Group. The impact of foreign exchange rates decreased gross profit by approximately $0.8 million. The gross margin rate was 39.7% in 2024 as compared to 39.6% in 2023.

• Gross profit at the Commercial Foodservice Equipment Group decreased by $53.1 million or 5.3%, to $943.5 million in fiscal 2024, as compared to $996.6 million in fiscal 2023. 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 $54.6 million related to lower sales volume. The impact of foreign exchange rates decreased gross profit by approximately $0.7 million. The gross margin rate decreased to 39.6%, as compared to 40.1% in fiscal 2023. 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 $17.1 million, or 5.9%, to $305.4 million in fiscal 2024, as compared to $288.3 million in fiscal 2023. Gross profit from the acquisitions of Filtration Automation, GBT, MaxMac, JC Ford, and Gorreri increased gross profit by $9.7 million. Excluding acquisitions, gross profit increased by $7.4 million related to improved product mix and acquisition integration benefits. The impact of foreign exchange rates decreased gross profit by approximately $0.1 million. The gross margin rate increased to 39.7%, as compared to 38.1% in fiscal 2023 primarily related to improved product mix. The gross margin rate, excluding acquisitions and the impact of foreign exchange, was 39.7%.

Selling, General and Administrative Expenses

Combined selling, general and administrative expenses decreased to $590.1 million in fiscal 2024, as compared to $624.9 million in fiscal 2023. As a percentage of net sales, selling, general, and administrative expenses were 18.7% in fiscal 2024, as compared to 19.3% in fiscal 2023.

Selling, general and administrative expenses reflect increased costs of $7.8 million associated with acquisitions, including $1.5 million of intangible amortization expense. Selling, general and administrative expenses decreased $19.8 million related to combined compensation costs and share-based compensation, $12.5 million in professional fees, $10.3 million related to intangible amortization expense and $4.0 million in lower commissions. Foreign exchange rates had a favorable impact of $0.5 million.

Restructuring Expenses

Restructuring expenses decreased $3.5 million to $8.2 million in fiscal 2024 from $4.7 million in fiscal 2023. Restructuring expenses in fiscal 2024 related primarily to headcount reductions and facility consolidations within both segments. Restructuring expenses in fiscal 2023 related primarily to headcount reductions and facility consolidations within the Commercial Foodservice Equipment Group.

Impairments

In fiscal 2024, the company recognized non-cash impairment of $5.2 million primarily associated with several trademarks in the Commercial Foodservice Group in conjunction with diminution of values as we assessed recent market conditions and future business plans. In addition, the company recorded an impairment charge of $5.3 million associated with the decline in recoverable value of an equity method investment. In fiscal 2023, the company recognized non-cash impairment of $2.0 million primarily associated with several trademarks in the Commercial Foodservice Group in conjunction with diminution of values as we assessed recent market conditions and future business plans. See Note 3(f) to the Consolidated Financial Statements for further information on the annual impairment testing.

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Income from Continuing Operations

Income from continuing operations decreased $8.3 million to $644.1 million in fiscal 2024 from $652.4 million in fiscal 2023. Income from continuing operations as a percentage of net sales amounted to 20.4% in 2024 as compared to 20.1% in 2023. During fiscal 2024 and fiscal 2023, income from continuing operations included the impairment of intangible assets. Excluding the impairments, the decrease in operating income was primarily related to lower sales volume.

Income from continuing operations in 2024 included $139.4 million of non-cash expenses, including $39.8 million of depreciation expense, $57.2 million of intangible amortization related to acquisitions, $10.5 million of impairments and $31.9 million of stock based compensation. This compares to $150 million of non-cash expenses in the prior year, including $36.8 million of depreciation expense, $66.0 million of intangible amortization related to acquisitions, $2.0 million of impairments and $45.2 million of stock based compensation costs.

Non-operating Expenses

Interest and deferred financing amortization costs were $93.4 million in fiscal 2024, as compared to $121.1 million in fiscal 2023, reflecting the decrease in net debt levels. Net periodic pension benefit (other than service costs) increased $5.8 million to $14.9 million in fiscal 2024, as compared to $9.0 million in fiscal 2023, related to a decrease in discount rates used to calculate interest costs and an increase in expected return on assets as a result of the higher assets value. Other expense was $0.5 million in fiscal 2024, as compared to $4.3 million in fiscal 2023 and consists mainly of foreign exchange gains and losses.

Income Taxes

A tax provision of $145.1 million, at an effective rate of 25.6%, was recorded during fiscal 2024, as compared to $123.1 million at an effective rate of 23.0%, in fiscal 2023. 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.

Earnings/(Loss) from Discontinued Operations, Net of Tax

Earnings from discontinued operations, net of tax, were $7.5 million during fiscal 2024, as compared to a loss from discontinued operations, net of tax, of $12.1 million during fiscal 2023. Fiscal 2024 includes impairments of $28.2 million, as compared to impairments of $76.1 million during fiscal 2023. See Note 12 to the Consolidated Financial Statements for further details.

Financial Condition and Liquidity

Total cash and cash equivalents decreased by $416.6 million to $222.2 million at January 3, 2026 from $638.8 million at December 28, 2024. Total debt amounted to $2.2 billion and $2.4 billion at January 3, 2026 and December 28, 2024.

At January 3, 2026, the company was in compliance with all covenants pursuant to its borrowing agreements. The company believes that its current capital resources, including cash and cash equivalents, cash expected to be generated from operations, funds available from its current lenders and access to the credit and capital markets will be sufficient to finance its operations, debt service obligations, capital expenditures, product development and expenditures for the foreseeable future.

Operating Activities

Net cash provided by operating activities - continuing operations after changes in assets and liabilities amounted to $564.6 million as compared to $614.5 million in the prior year.

During fiscal 2025, working capital changes contributed to operating cash flows primarily driven by an increase in accounts payable of $18.1 million, offset by an increase in accounts receivable of $14.5 million and prepaid expenses. including impacts from the timing of payments and status of over-time revenue contracts.

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 2025, net cash used for investing activities - continuing operations amounted to $103.8 million. Cash used to fund acquisitions amounted to $32.0 million. Additionally, $70.7 million was expended, primarily for upgrades of production equipment and manufacturing facilities.

Financing Activities

Net cash flows used for financing activities amounted to $970.9 million in 2025. The company’s borrowing activities during 2025 included $1.1 billion of net proceeds under the Credit Facility, $607.3 million of net repayments under the Credit Facility and $744.5 million of payments of principal of convertible notes. On August 19, 2025, the company and its lenders entered into

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an agreement to amend the Credit Facility which, among other things, extended the maturity date of the Credit Facility from October 21, 2026 to April 28, 2028.

Additionally, the company repurchased $723.6 million of Middleby common shares during 2025. This was comprised of $14.0 million to repurchase 83,889 shares of Middleby common stock that were surrendered to the company for withholding taxes related to restricted stock vestings and $709.6 million used to repurchase 4,911,050 shares of its common stock under a repurchase program.

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 2, 3, 5 and 7 to the Consolidated Financial Statements for further information.

Related Party Transactions

From December 29, 2024, 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.

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. The preparation of these financial statements requires the company to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses as well as related disclosures. On an ongoing basis, the company evaluates its estimates and judgments based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions and any such differences could be material to our Consolidated Financial Statements.

Revenue Recognition

Revenue is recognized when the control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The company’s contracts can have multiple performance obligations or just a single performance obligation. For contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation using the company’s best estimate of the standalone selling price of each distinct good or service in the contract.

Within the Commercial Foodservice Equipment, the estimated standalone selling price of equipment is based on observable prices. Within the Food Processing Equipment Group, the company estimates the standalone selling price for equipment and services based on expected cost to manufacture the good or complete the service plus an appropriate profit margin. The estimated standalone selling price of aftermarket parts is based on observable prices.

As the company's standard payment terms are less than one year, the company does not assess whether a contract has a significant financing component. The company treats shipping and handling activities performed after the customer obtains control of the good as a contract fulfillment activity. Sales, use and value added taxes assessed by governmental authorities are excluded from the measurement of the transaction price within the company’s contracts with its customers. The company generally expenses sales commissions when incurred because the amortization period would have been less than one year. These costs are recorded within selling, general and administrative expenses.

Control may pass to the customer over time or at a point in time. In general, the Commercial Foodservice Equipment Group recognizes revenue at the point in time control transfers to their customers based on contractual shipping terms. Revenue from equipment sold under our long-term contracts within the Food Processing Equipment group is recognized over time as the equipment is manufactured and assembled. Equipment that is highly customized and for which we have a contractual, enforceable right to collect payment upon customer cancellation for performance completed to date qualifies for over time revenue recognition. With control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. Installation services provided in connection with the delivery of the equipment are also generally recognized as those services are rendered. We generally use the cost-to-cost input method of progress for our contracts because it best depicts the transfer of control to the customer that occurs as we incur costs.

Under the cost-to-cost input method, the extent of progress towards completion is measured based on the proportion of direct labor hours incurred to date to the total estimated direct labor hours at completion of the performance obligation. The selection

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of the method to measure progress towards completion requires judgment. These measures include forecasts based on the best information available and therefore reflect the company’s judgment to faithfully depict the transfer of the goods. Revenue generated from standard equipment, contracts without an enforceable right to payment for performance completed to date, as well as aftermarket parts, are recognized at the point in time control transfers to the customer, which is typically based on contractual shipping terms.

Contract revenues are determined by negotiated contract prices, modified by our assumptions regarding contract modifications, which are common in the performance of our contracts. Contracts modified typically result from changes in scope, specifications, design, performance, or period of completion. In most cases, contract modifications are for services that are not distinct, and, therefore, are accounted for as part of the existing contract.

Contract estimates are based on various assumptions to project the outcome of future events. These assumptions are dependent upon the accuracy of a variety of estimates, including engineering progress, achievement of milestones, labor productivity, and cost estimates. Due to uncertainties inherent in the estimation process, it is possible that actual completion costs may vary from estimates. Contract estimates are regularly monitored and revised based on changes in circumstances. Impacts from changes in estimates of net sales and cost of sales are recognized on a cumulative catch-up basis, which recognizes in the current period the cumulative effect of the changes based on a performance obligation’s percentage of completion. If estimated total costs on contracts indicate a loss or reduction to the percentage of total contract revenues recognized to date, these losses or reductions are recognized in the period in which the revisions are known. The company has not recognized material favorable or unfavorable changes in estimates related to its contracts with customers in fiscal 2025, 2024, or 2023.

Inventories

Inventories are stated at the lower of cost or net realizable value using the first-in, first-out method for the majority of the company’s inventories. The company evaluates the need to record valuation adjustments for inventory on a regular basis. The company’s policy is to evaluate all inventories including raw material, work-in-process, and finished goods. Inventory in excess of estimated usage requirements is written down to its estimated net realizable value. Inherent in the estimates of net realizable value are estimates related to our future manufacturing schedules, customer demand, possible alternative uses, and ultimate realization of potentially excess inventory.

Goodwill and Indefinite-Life Intangibles

The company’s business acquisitions result in the recognition of goodwill and other intangible assets, which are a significant portion of the company’s total assets. Goodwill represents the excess of acquisition costs over the fair value of the net tangible assets and identifiable intangible assets acquired in a business combination. 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.

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. 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.

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. Significant judgment is used to evaluate the totality of these events and factors to make the determination of whether it is more likely than not that the fair value of the reporting unit or indefinite-life intangible is less than its carrying value.

Goodwill Valuations

The reporting units at which we test goodwill for impairment are our operating segments: the Commercial Foodservice Equipment Group and the Food Processing Equipment Group. If the fair value is less than its carrying value, an impairment loss, if any, is recorded for the difference between the implied fair value and the carrying value of goodwill.

In performing a quantitative assessment, if required, the company estimates each reporting unit's fair value under an income approach using a discounted cash flow model. The income approach uses each reporting unit's projection of estimated operating results and cash flows that are discounted using a market participant discount rate based on a weighted-average cost of capital. The financial projections reflect management's best estimate of economic and market conditions over the projected period including forecasted revenue growth, operating margins, tax rate, capital expenditures, depreciation, amortization and changes in working capital requirements. Other assumptions include discount rate and terminal growth rate. The estimated fair value of each reporting unit is compared to their respective carrying values. Additionally, the company validates the estimates of fair

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value under the income approach by comparing the fair value estimate using a market approach. A market approach estimates fair value by applying cash flow multiples to the reporting unit's operating performance. The multiples are derived from comparable publicly traded companies with similar operating and investment characteristics of the reporting units. The company considers the implied control premium and conclude whether it is reasonable based on other recent market transactions.

Based on the qualitative assessment as of September 28, 2025, the company determined it is more likely than not that the fair value of our reporting units are greater than the carrying amounts.

In estimating the fair value of its reporting units, management relies on a number of factors, including operating results, business plans, economic projections, anticipated future cash flows, comparable transactions and other market data. There are inherent uncertainties related to these factors and management’s judgment in applying them in the impairment tests of goodwill. 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.

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. We estimate the fair value of these intangible assets using the relief-from-royalty method which requires assumptions related to projected revenues from our long-range plans; assumed royalty rates that could be payable if we did not own the trademark or trade name; and a discount rate using a market based weighted-average cost of capital. 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 28, 2025, the company identified several trademarks and trade names with indicators of potential risk for impairment and performed quantitative assessments. In performing the quantitative analysis on these trademark and trade name assets, significant assumptions used in our relief-from-royalty model included revenue growth rates, assumed royalty rates and the discount rates, which are discussed further below.

• Revenue growth rates relate to projected revenues from our long-range plans and vary from brand to brand. 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 and trade names, we considered factors that affect the assumed royalty rates that would hypothetically be paid for the use of the trademarks and trade names. The most significant factors in determining the assumed royalty rates include the overall role and importance of the trademarks and trade names in the particular industry, the profitability of the products utilizing the trademarks, and the position of the trademarked products in the given market segment.

• In developing discount rates for the valuation of our trademarks and trade names, we used the market based weighted average cost of capital, adjusted for higher relative level of risks associated with doing business in other countries, as applicable, as well as the higher relative levels of risks associated with intangible assets.

The gross value of all trademarks and trade names tested was approximately $23.8 million, including the impaired trademarks. As a result of the quantitative testing the company recognized $10.6 million of impairment charges primarily associated with certain trademarks within the Commercial Foodservice Equipment Group and Food Processing Equipment Group. For further details associated with the company's trademark and trade name impairment testing, see Note 3(f) to the Consolidated Financial Statements. 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. 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.

Pension Benefits

The company sponsors pension benefits to certain employees. The accounting for these plans depends on assumptions made by management, which are used by actuaries the company engages to calculate the projected and accumulated obligations and the annual expense recognized for these plans. These assumptions include expected long-term rate of return on plan assets and discount rates.

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 gain or loss that exceeds the corridor is amortized over the

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average future service of the plan participants or the average life expectancy of inactive plan participants for plans where all or almost all of the plan participants are inactive. While we believe that our assumptions are appropriate, significant differences in our actual experience or significant changes in our assumptions may materially affect our pension obligations and our future expense.

Income taxes

The company provides deferred income tax assets and liabilities based on the estimated future tax effects of differences between the financial and tax bases of assets and liabilities based on currently enacted tax laws. The company’s deferred and other tax balances are based on management’s interpretation of the tax regulations and rulings in numerous taxing jurisdictions. Income tax expense and liabilities recognized by the company also reflect its best estimates and assumptions regarding, among other things, the level of future taxable income, the effect of the company’s various tax planning strategies and uncertain tax positions. Future tax authority rulings and changes in tax laws, changes in projected levels of taxable income and future tax planning strategies could affect the actual effective tax rate and tax balances recorded by the company. The company follows the provisions under ASC 740-10-25 that provides a recognition threshold and measurement criteria for the financial statement recognition of a tax benefit taken or expected to be taken in a tax return. Tax benefits are recognized only when it is more likely than not, based on the technical merits, that the benefits will be sustained on examination. Tax benefits that meet the more-likely-than-not recognition threshold are measured using a probability weighting of the largest amount of tax benefit that has greater than 50% likelihood of being realized upon settlement. 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.

Certain Risk Factors That May Affect Future Results

An investment in shares of the company's common stock involves risks. The company believes the risks and uncertainties described in "Item 1A. Risk Factors" and in "Special Note Regarding Forward-Looking Statements" are the material risks it faces. 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.