The Middleby Corporation (MIDD) 21 Feb 232022 Q4 Earnings call transcript

Good day, and welcome to the Middleby Fourth Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] With us today from management are, Tim FitzGerald, Chief Executive Officer; Bryan Mittelman, Chief Financial Officer; James Pool, Chief Technology and Operations Officer; and Steven Spittle, Chief Commercial Officer.

Please note today's call is being recorded.

Now I'll turn the conference over to Mr. FitzGerald. ahead. go Please

joining call. for on fourth our Thank us earnings quarter you today

As slides there call note, we please begin, are Investor of on page to our website. the the accompany

with to finished quarter, pleased with to in close record the in are We along the year the strong have fourth year XXXX. another results

realized we year, milestone approximately We focus eclipsing year, our on to innovation our improvements reporting product million of our $XXX over sustainable earnings billion million in portfolio taking the manufacturing to initiatives over of For the profitability $X surpassed a for just $XXX to evolve our and adding the revenues, year the in while investments EBITDA. course in is as hold.

and the to faced headwinds inflationary These move supply as chain entire and continue will efforts XXXX. throughout are provide efforts momentum through these we we the year offsetting significant

industry-leading and our go-to-market In each of XXXX, in marketplace. the investments we three innovation, businesses strategic continue make strengthening acquisitions, positioning critical in foodservice and capabilities to our competitive bolstering

we and In brands of products and number new introduced controls, initiatives record to a our IoT automation. and company-wide digital furthered across pertaining our significantly developed technology XXXX,

our forward our sales continued strengthening customers. and XXXX, take In with focus investing adding partnerships deepening end-user a our our and support our culinary on capabilities engagement kitchens, steps to initiatives, go-to-market in teams, we expanding digital to innovation to on our strategic channel

our innovations on continued offerings of portfolio our extending acquisitions, with execute and track three each our product foodservice also eight in exciting and we to adding to new with XXXX, brands In strategic long-standing smart new segments. record further

sustainable to offer have evolving efforts these real-world trends, our for. are rapidly XXXX, capture looking the customers operator market challenges close us well address we positioned and solutions As

be As forward conditions XXXX, we to continue into uncertain. economic look

developing three continue opportunities in businesses. product of have the the our each of outlook foodservice a competitive and given positive However, innovations pipeline customer we to positioning new

and investing are their segment, pervasive our labor, and Commercial address of our in cost. customers challenges operations energy evolve solutions At Foodservice food service, to of speed

Our to the in like and latest are we in never challenges with before. customers innovations kitchen demand are engaged solve

heavily attendance the attendance seeking ahead the Activity operations. engaged over largest innovations service further show show, is transform were the this. was industry, of food levels. The stages reinforces also at recovery. new with Recent favorable longer-term early and backdrop existing and We of restaurant the out NAFEM XX,XXX customers NAFEM latest with the in strong pre-COVID still their at in of trade our was industry to

XXX,XXX the opportunity over U.S. chain foodservice our back only in locations closed new in approximate store is we new plans. that of estimated engaged as leaving confirmed development. with units This market for many is are long during on store added an the a It X,XXX opening XXXX, customers runway pandemic, were while

segments, school return increasing casual only in are work many in at early travel and as travel, attendance stages with in-person to still In such dining recovery recent return and schools, and more out. lodging dining a of and

we positioned recovery. for confident this well are We long-term are

to equipment for customers throughput, looking to increasingly cost through energy, are address food concerns. utility need a automation, increase and rising is our there reduce address and labor business, Processing water Food costs software our sustainability At challenges and

exciting past these new years, the needs. several introduced Over we've innovations addressing customer

food, protein. new solutions, also our pet our while bacon made alternative and also full-line automated into strides as food applications expanding such have We broadening significant offerings

benefits projects with new the through of seeing categories. increased on increased and are We business strategy in partnerships our customers

with in slowing interest all housing rising rates, XXXX. expected declines headwinds destocking channel at a business, our market inventory and of present business, our uncertainty outdoor At residential grill and order

of further the to product showroom launches, our the sales new investments in capabilities platform. continue Despite remain and strength challenges, excited and opportunities our to our we developing for these with leverage development

culinary share. offerings Our products market residential market teams and the imagination position with new us at to engagements and and our capture position electric demand designer our to showrooms induction such as growing product and trends, for better capture us

maintain environment as we current and as we to to the in invest market and as profitability continue industry-leading expect we'll growth sales the recoveries. navigate position We profitability for

future. year am of made proud summary, for towards and business, deliver I to we In goals. have the us am is our team the execute the disruptive will adding thankful entire financial Middleby confident as also and marketplace, are our as of to us which continue effort another positioning to we of the strategy team, our competitive in our efforts the I longer-term our progress continue and XXXX transform progress challenging we in our for differentiation

to to James product I'll exciting over more the call introductions. of recent our spotlight Now pass

Last thanks, of not electrification. I banning I demands just and products electrification with of it's at equipment highly as couple being Yeah, Tim. gas-fired the being well processing hindsight, about and and a electric, comments about cooking quarter, appliances. same aimed efficient discussed has push discussed, my at current In timed around events to electric exceed time. the it's continued building electric were that Middleby the

forward. next ovens is electric products hobs, Middleby our combi deliver to generation well meet electrification that the future the of needs From positioned to in moving

am launching talk I products in going XXXX. about to Today, new three

Konnected is Joe. first The

strategy. Charcoal that to controls calls a about digital content of If the the Joe Konnected in Digital Masterbuilt and Joe way same to continuation app-controlled Konnected Connected brought the and and digital is me Kamado Joe talk prior heard cooking lineup brings you've The we of the charcoal our connectivity on Grills. Charcoal, Gravity digital series

light been friction Joe low Kamado and charcoal Smoking Konnected and Konnected the never the cooking. control, it. associated that's the easier, grilling points Kamado and button, in has press grilling Konnected simply addresses outdoor with the the With

favorite lighting there, beverage their to enjoy precisely the The auto novice the temperature. care growing allow master time and Joe four. the Konnected regulate or digital The will ignition system of takes takes controller over the the from grilling will to Kamado's Kamado, embolden

also pure manual the this The Joe scare should mode, digital can in the market. a this making on Kamado usable off versatile And and control Kamado most run grilling purist? the

is of electric Invoq, and XXXX new the second new to The combis. high-efficiency our half the scheduled product commercial gas of first it’s in line launch

have teams that sustainability. talk Invoq is earnings for numbers. this we engineering And about an some designed connectivity should given Our call, to and

half-sized increasing XX% built hotel combi while is capable pans. on a Invoq This capacity combis, competitive full-size while advantage our The being by sheet still a and a versus fitting footprint full-size affords combi us cooking XX%. of size

a spacing operation, into XX% XX% wood our less building reduces going power around the copper efficient combi The footprint footprint combis. generation this cleaning. means XX% smaller and less water steam and during by for vented make smaller load and very with cleaning for which less required innovations This

customer and This Middleby's yet combi Invoq platform. environmental and by The is the Kitchen for this is initiatives. IoT sustainability our designed was Open best the numbers, best-in-class it by ready, on combi our OneTouch Middle and delivering a Control is

third the product Pitco featured finally, Fryer. And new Smart Solstice the is

we SmartSolstice or background Before Fryer, today, fryers. two some comments fryers Traditional; to the common reduced about talk of fryers or the types marketed going oil full about I most and ROV am volume volume make oil

to filtering they due preferred choice top-off. become features deliver fryers. reduced have lead oil oil automating the benefits to and versus fryers consumption the fryers by oil These traditional of ROV

differently, as of all volume. they take savings same fryer ROV breaded the an ROV to will oil frying products. to comes and a advantage and Said benefits the when could heavily fryer, if their with struggle tasks, fryers, chicken our use to full as tend deliver fryers heavy-duty it traditional of automation traditional even such However, frying customers oil continue to

smart first the is through Open the Solstice connectivity and and oil fryer and filtering, reports Smart The automated that measures Control Kitchen. volume only Middleby Touch and oil in sensing, quality oil which deploys oil One life top-off, full and real-time

point filtering Solstice really make zone our all fill ROVfryer the less disposed. fryer oil all-around when chain Compounds, volume, beyond TPCs in requiring and for as longer cold best takes that, to the an form Note the oil concentration the the oil customers TPCs, it life Total thus changes. of determine and levels Smart requires oil be process larger combined should for with extend threshold Polar an more features to These while of it and to customers of

the move are companies synergistic we And two would uses and concluded ready. that Solstice made QX, Middleby Touch beverage These One Kitchen and we mention Open Smart Marco to with to we like as I is platform Mixers. the acquisitions Bryan, before respectively. over Escher Finally, group, Beverage the Control processing and Systems food

of chilled and automated platform. lineup well-engineered of along These Escher beautifully a our planetary additions water. brings already out dispensing and spiral help sparkling Marco group. Mixers beverage Middleby's with hot, and mixing Food round bring coffee to dispensing brewing large-scale and water products, lines robust dispensing Processing and capable designed

full-line Middleby bakery our of specify afford Middleby to mixers part customers These as a mixers ability the solution.

over and you, Bryan. you, Thank to

sales, happen attacking the XXXX, record about while plan When mind, to from James. We word be record 'XX. comes make market about the this think records conditions. to record earnings, Thanks, broken. in quarter, are record and residential year that one inflation, I is think logistics, To meant we records, chains, they labor delivered and supply challenges to that

More me performance. by let on reviewing start that later, but briefly recent our

billion. of XXXX, fiscal we record over For generated revenues $X

million, exceeded EBITDA $XXX year-over-year rates. when impacts changes exchange million considering in foreign was nearly and adjusted $XXX the Our from

of in and GAAP the amortization as earnings the our income, which pension noted well adjusted $X.XX as items per release non-operating in were was and press expense EPS, back $X.XX. excludes share other reconciliation

at revenue $XXX.Xmillion. billion $X.XX. in $X.XX over adjusted records over generated at at GAAP EPS we quarter, and with $X per QX fourth the EBITDA earnings share were For adjusted

quarter, organically. XX% year. For grew the year – sorry, for EBITDA over Adjusted revenues or the grew year-over-year XX% over prior XX% the

from XX.X% over excluding and organic well, will margin as discuss and are way, points impacts. basis an on I QX expanded XXX By margins or were all values acquisitions the any Our FX hereafter meaning basis XX.X% organically.

Commercial Foodservice was year. prior XX%. adjusted revenues margin over the were organically XX% The EBITDA over up over

X% favorable XX%. XXXX. While we revenue did approximately and organic saw $XXX residential, In some sales exceeded an million whopping we work hurdles, adjusted EBITDA rather In organically. was revenues decline of Food increased a margin XX% mix. a through The versus have total we Processing, operational

with full-line EBITDA XX%, adjusted margin was Our our customers. are solutions resonating

quarter, record innovation goals. not still easy that an Even labor operations, our taking and impact results, is though to we solutions margin best mix, did we towards us we results providing where delivered and marching but was matters show compelling volume chain are our and the supply our drove maximize it

$XXX cash and were over is inflation were which present, it flow cash this quarter working years. chain capital has and our past from conversion flows the impacts less supply still impactful The million. the challenges, over best operating while exceededXXX%, two been Our free

should forward, our year. to at expect levels, free Looking we flow least had income cash net our cash flow been pre-COVID fiscal we seeing of return to generation for that where XX%

was ratio X.Xx. leverage total Our

nearly the $XXX is These limit we stock QX figures have covenant and so after currently deployed effect X.Xx, in Our million capacity. acquisitions we borrowing buybacks. billion are to on $X.X giving over

For of capital-related over nearly made leverage flows we stock cash have million for in we been thus and capital had transactions. almost used $XXX $XX would acquisitions million turns capital or $XXX not million invested lower. cash deployed and free around the flow. we million $XXX We year, transactions, operating of $XXX Had these also generating on million our X.X expenditures,

are be with NAFEM of innovation help home While wizards to from will founded famous impressive delivered Orlando very do profitability and The committed Potter, Diagon and alley fully by answer exceptionally show was Harry at XXXX. popular In what two February, amongst alleys. we How in even made Alley, alley little the proud delivering as may are our this? and we records booth. more we a magic. in trade spells new to we in 'XX,

I Diagon it us scarves gloves. out one mobiles was in were of interested more cold the in wearing turns he coats, down heavy day, and and Alley Florida with over my other. on unseasonably son an The walking two was where

stretching Fortescue's cream block. long line winding, the was However, around parlor ice and Florean the down

shop, the discovered a special two are its dispensing produced. tailor I treats out boost recent freezer Imagine that only entered a secret. from machine with a not They Their from entirely we As most flavors. existence starts a acquisition. magically come the

instantly spell a of if are your burst, one flavors. you you wand flavor have cast serving Grab XX and

him with son magic he its brought At my the ice. and a ice wanted he chew why, playing as This to larger beverage delectable and he it. meal, [Indiscernible] my stop he learned. with and face, your cream the asked with to one in me will chewblet colder keeps not was ice too. his told I a apply drink fill does was glass Our area, spell for longer it with exactly your soon looking as drink, what huge surface bonus, smile

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dispense your pop dispensing, can restaurant of to perfectly remove afraid out beverages special The bigger? Newton, will revolutionize your easy flow but constant one ventlessly you a will have you the every EVO quickly To combination of addressed. looking nowhere. ghosts, frying time, curse, have Are and Nikko fountain valves or and of formulated word grilling Solstice want appear are needs

Wizard. the that there While found believe favorite the the MIC, muggle and you is Ministry now my at place may of truth Magic, is I that Incredible son transform can to Ministry the culinary Journey Kitchens. my from be that work to of

may have all magic. have Our wands. your seem which spells talented chefs our like fingertips. at control, the One puts Touch It don't They

running And names soft-spoken of wonderful be led is we like distinguished battle cannot whose gentlemen what this even keeps descent. spoken, culinary Hogwarts, those by smoothly, just while Irish Middleby world a

whether to experience. the to and using We powers 'XX. is we our in So, want with grow there at and explore all powers Hogwarts are much our you, share to or learn, all MIC,

may excellence While because we seem grow like execution. and magic, innovation will actually it of in

In expand look total our for our as three we work of segments and company margins in XXXX, the two we medium-term towards to targets.

on know are reminder, margin challenges EBITDA in a platform. for residential focus our get to for XX% adjusted I there food As and the is will is market and Foodservice the facing. the Commercial residential that. much annual I processing targets XX%

growing across be down proving new problematic basis, we chain is we slowing for our supply It's portfolio year. in markets. mean areas. important this still that are are to be 'XX? even will greater investing new in facing in and entire and a presence understand pressures. to on daily not tackling Nonetheless, capabilities should challenges Labor It still an What our inflationary

will QX segments. was It We two the QX keeping is from we just favorable mix quarter great completed, recently that solutions. full-line product and of step in that delivery from fourth in mind benefited back exceptional a

pre-COVID back So, think our strong some a is not some getting then back comparing we're world, quite to I'd now norms. in seemingly where QX are is means, having usually peak post-COVID to seasonality as sequentially. when like to This and QX living patterns we quarter

sequentially to improving Over the be course of 'XX, of all we the look segments. bottom-line top and for

to expansion versus performance our a of the revenue modest for Comparing revenue 'XX, food meaningful see quarter year-over-year both. growth not for processing, our margin unexpected outlook that declines QX will and 'XX first What commercial see we residential at be should are and basis. on looking is

QX Nonetheless, are is of housing QX. The over with the largely probably 'XX included revenue 'XX conditions Resi's along just QX from grills, grill residential that was the residential of around decline for $XXX our highest down ever, of generally destocking million the Recall of 'XX which company revenues. slightly quarter market. being challenging outdoor impact driven from retail revenues

reiterate progresses, board. delivering that be across the 'XX we currently expect I as sequential to Overall, growth

the food For levels. expansion. revenue with plan to make I for get you next see to total, organic are we growth our processing and wait year backlog info. margin this our in Supporting week filing XX-K this in commercial won't

was the total backlog ended year, we As nearly $X.XX our billion.

over have was Residential help $XXX margins. decent margins, and our for does in though see yet mid-teens has over anyone to segment Resi look industry-leading it likely revenue operations, in Processing, $XXX the year, them In came we that, understood million, at which not declines. we the of be commercial, million who meaning was million, Food this total reminding will to it $XXX even about fully at seeing For and spite have buoy expected the

Given impacts buying be after customer will patterns, QX. less the much destocking

currently As the anticipate a growth for second result, on a we Resi. year-over-year basis, in seeing half

Processing, at for growth. Food Looking poised 'XX are we solid for

large We have we to a and orders. land continue strong very backlog

segment, build this the the year. As low, margins is year typical start for out across but

customers' together, piecing We segments drivers, growth total growth likely to in margins we and currently and expand. and margins. and modestly should year year-over-year and our backlog full amongst all commercial in the this too, our resi see with are dollars Year-over-year revenues growth development leading in the plan for plans growth, second two companies growth up expansion half seeing see total - with EBITDA margin company year-over-year technology,

We known are for. is Middleby delivering what

they with when Before as while I time GAAP on our non-cash to have our cover the pension the our have will within to bear for and a and results GAAP close, 'XX, impact GAAP of comparing will we generated accounting spend please Again, impact I want a just area one technical results, our earnings. on by plans. 'XX I pension it what me plans 'XX little benefit non-operating

non-GAAP Note at over the This amount most values. process. of year in $XX exclude we this This the interest that an adjusted from by of impacted The rates asset determined totaled amount XXXX. is valuation million actuarial earnings. our is and as part beginning

XXXX, amount $XX a million interest asset the year. at For and past in the due in rates be decline will values in pension the this plan much approximately lower increase to over

to amount for frozen, only XXXX. not benefits largest cash pension plan that the plans contributions our make year Given each a change are modest and will we of

the cash Again, has stood not metrics. million non-GAAP been at – approximately to large benefit will large way, determined The actuarial see sheet. seen balance while a our at benefit eliminated will that 'XX just not our has nearly $XXX have the the impact changes liability at or 'XX. end unfunded noted, of P&L flows on this we the due By end as I nearly in 'XX a of

Jordan, even a think that I year, all I be as year greatness, 'XX think 'XX, automatically of Michael jerseys Middleby's an will reminder exceptional probably Being wear 'XX will a better. Chicagoan, be when Ryan was their Sandberg, of yet. greatest I conclusion, In 'XX year,

open that, your with And are questions. we for

be Joyner go Capital [Operator Markets. ahead. Please from Instructions] And BMO from will the first question John

I Hi, suggestion. you on But progression throughout a anyway, Thank and might flavor a great. this bit my a exit you mean, expected showed expansion for XQ, guess, business I a the and I probably processing so questions just in few year, optimistic back rate you for your in bit modest the definitely solid both verse XXXX. Bryan, is mentioned margin commercial for the for there we -- that a commercial for the first the margins, which mean, had need know margin year, which to I taking cut makes on EBITDA days, and

there any quantification more you margins businesses is full But by that or offer of kind year the kind in particularly commercial? can of EBITDA around

Yes, half through and at year as having would we year, as combined, of second I obviously, expanding of pricing such. continuing looking at well the through quarter, as look through I each as say inflation commercial, kind the you I go by to as and we face start look we're are come more the pressures

than So you from down that little will the closer for and bit is build be to we'll QX back level probably 'XX. year But year step look and if think for that like then QX. of a did say, XX% I a or to we to did get XX% better at half that we the the I

to it of takeaway target it again, full the year on right? there. towards peak at be than a look that I 'XX, is, is have think you and we 'XX But progression in do again, on a path expect year. the we higher QX building basis, out There marching has our we're from as always

maybe just and if more, I one could. Okay. Excellent

their any quarter positive really haven't say, would shifts or you kind end-markets a regard has are there again, by back a some expansion Tim guess, about sticking I been Just to that coming are, demand, end-markets bit. that with ago, of the overall back negative? and mean, I – these And plans? say and But business, versus, stepped customers of on talked commercial with really commercial

continued here think of off we've I strong Steve, see am to trade kind levels. mean, but I with activity I

constant supply activity through I is places think of large quarter kind issues, that in you've kind we've with gone particularly over have our the the got all but the chain of patterns I think chains. really marketplace, what's been been

But other comments, I as in we there are XX on been that turning ago. I segments mentioned, see there that not mean, months had the also

kind here. on as it's broadening going is of So out time

Okay. so Great. Thanks much.

Saree Jefferies. And question go Boroditsky Please with the next from will be ahead.

sequentially. It margins how thanks kind given like Is the just looks think question. looks right the think on first decline, And of to about it? this down for taking if do we for my year-over-year, like year quarter? you XX% down maybe focusing resi start Hi, way the about this you're

to just offsets segment? price follow about from think in investments this And to maybe that up, do then, volume margin how cost or we some

You the QX? say, what number did revenue you call for

XX%. down Maybe

We I a talked range, you Yeah, did if could kind plus bit than year think XX X.XX last that about being [Indiscernible] XX less QX. that, right. I do little of it be that math. to the

So, – that's comments you I captured think my did appropriately.

grills, – Bryan's in think up. probably an of given well driving is did that north outdoor we outsized this and is frame $XXX I surprisingly decline maybe in to million wanted comments not the well, Just The as year. it just

as the So of a larger grill. much destocking the you're you seeing got decline

is So the as the rest much. of down not platform

very I than acquired half. is mean, The businesses. it's growth. So majority of those towards – certainly, kind from Yes. but it's more down over heavily grill the decline weighted the double-digit, recently of

headwinds can then, by And being just volume you the first that margin the costs think in talk offset just as And maybe expectations the some investments rest the about then, in price you about or quarter? year of segment?

as talked in QX revenue call kind margins decline at the of it's about revenue not it, quarter. in QX we the for But the still [Audio so be of, the for from having being from I expect and down in QX looking comes I will – leverage that Gap] levels, build to impact with year. the step there, QX. said, teens the higher with Yeah, Obviously,

year revenues year, QX on growing the from talked than about leverage is work would through it helping right? is, we we more full benefits I there, as say, so the right, And as margin given get improvement that thus pressure I well. number, more

I quarter more one international versus And about squeeze growth. you perspective? XXXX you're demand just from of seeing talk domestic filters, could another very the obviously, if in strong in just a Can commercial

Commercial.

about again, think think prior and about the larger I it's chain you most Saree, plans had They've things, chains, I big calls. again, their of the openings our think in great. for of couple talked really about you great XXXX. I've I store of when And new talked One, customers, the you one have all last record we build before, XXXX again, at in think, reiterated has come from years.

through chain working year. for a supply So gotten understanding closer plans the of disruptions, terms upcoming we've lot in

view So the year. good international have for is I I it growing very think look especially will chains tell where many at are mean, you, we in markets. if this you I a

a You lot year-over-year think Brazil, chains be perspective. from actually positive where build parts definitely like of store markets - India, will perspective, of you new growing see a the

some actually the markets of some to I think substantial store key growth. opening pretty new international those But is see do going again, market back will you where

chains, just you think the of the of you'll general I kind not in market. domestic segments, think think when some see do more of growth other primarily of I in

your consultants. in specifications put library driving I think which talked et the schools, our is call, into prior cetera. I we a work B&I, about

think do the domestic in will I segment. that show up So

back again, for going you international some growth will substantial XXXX. think, So the positive But I do the think change, to both pretty I are see for year.

for and the taking on my Congrats thanks question. quarter Great.

Zakaria you. next go Thank And is Tami our ahead. from JPMorgan. question Please from

Hi, good morning.

Or food some other turning by So be that to to processing, be back going operating this like drivers and is for So expansion tailwind? comment your price/cost – for price into going leverage? assumptions driven food both are primarily by so margin cost there what driven finally or commercial year? a would mix that like

seen mean the driven a our expansion platform we've margin think the strategic all is really lot the of really across by above. it's So, I initiatives. that I

one. say mix And would that's we the really in investing evolving then, definitely products. So platform. are our number I of the manufacturing

you've think I that a So seen of coming lot through.

it been a headwind. Price cost has and be headwind a to continues

So of I kind up. even as take the dig but down, commodity half items come as another. I'd year, I to go things components, think see has through continued specific pricing, continued the say, you the and they've you we've like through to continued of mean, going electronic some controls back inflation more to of in

So, we is have gap price/cost the of closing. the of kind is here trended way

So I progress the some in fourth think we saw quarter.

we still are curve that the did We So the pricing is higher close that behind some cost take gap. XXXX further where into price. going will than

So we're it that cost. quarters between the here. it before perspective get closing parity couple – gap of it's from we a tailwind pricing a is still the But a be will probably the

year? are very the Can the segments just taking Got follow-up three you it. helpful. you on And us a this pricing quick That's action comment made. you remind what across pricing incremental

we've didn't we Like the pricing take board, XXX across got right? it's Well, brands.

very competitive cost and relative also the thoughtful brand-by-brand, what have and is. marketplace seen market we've that passing it's the contemplating So, them around they the it, to in been position

launched we've remind, so also products. just many I'll new

have of that really to existing an didn't we're So a bringing lot out there. products we the market price times,

look into segments a of I'll took, the is that at mid-single-digit say, you price factor. So the in increases also as we Kind year. commercial overall, going

It's probably It's of on quoting depending were lot step-ups on somewhat what although similar of food some took where projects basis that on significant last processing, are specific customer the year. a lesser very been those residential on we a kind needs.

much. you Thank it. so Got

Hammond Capital ahead. Please go be question from next the KeyBanc from Jeff Markets. And will

guys. Hey, good morning,

morning, Good Jeff.

res has also and kind destock I and Just on on – the this of back weakening One, been supply there guess chain Kitchen, kind issues. of two dynamic.

of sight when sense chain supply you line get improving? us the of give Just a kind to of

get destocking, when just of And new you new and then, And some around of through about your think Analyst it partners you think you partners and destock? had Day those channel I to the at wins Thanks. some just some talked their inflect? channel would

I are mean on, so it's year the inventory, levels of until part they've only, the in got of again, to they're destocking say, inventory that our not our not to overall. going continue there up, of load other they some got we Yes, up see to but so and products products the in the new going first inventory brands is coming let's

So, way in of continue I by it mean, I to half first year. be think we impacted this the that we about the is think

of most last The to first quarter year drops effect strong kind $XXX first because very at of revenue off unexpectedly, significantly that had quarter significantly in not we lesser a probably that QX. a million grills over

do say we platform. to Kamado we the products that can't momentum and at we back certainly, then, and there could Certainly, James inventory new feel much into levels see Konnected of we're going Masterbuild and because and situation be the one are Charcoal year precisely, in point, got and And of like as great is like is but are is number reset the commented a we perhaps of the on we've going series growth the channel is gravity one I inventory there some half them, a in better Digital which well. a in to feel think

there. we see some share So, and I mean, gains market I think great demand

of have orders been we season kind there. some having load-in initial So

those about excited we're products. mean, I So

those of demand for pretty but So, growth I excited kind think we're what see we products season, those. are, through as about go we'll the

supply chain China the just And dynamic?

we supply by a think, Yeah, chain, but have chain can I up tomorrow, we wake from so I supply large, also China mean only issues and of better. you and manufacturing, you is the mean, the that's COVID-related, which certainly, lot issues much out I and new But there, mean lots I not shipping. of could had have some still a story. that

cost you container in has a the very year, as well. freight, remember of situation of And some domestic availability, last different which improved, from as can we're

much in better there. a are situation We

we I So last that. growth a mean of season of year, bit missed think I little because the

So I mean, be foresee I in happening think we – XXXX. don't we'll that

there's I are Okay. And just thinking wanted interest change on the us kind side, update been you at can non-operating on any your go losses you're FX away? an about if level to how away of you go how Analyst update think these don't thinking there? And I or set Day, you expense just just gave it, on

Yes.

feel our On say, current current I that we say, stays folks the are expense interest rates, it probably work for is to been debt our another we interest and And variability FX, where will interest rate current XX would expense, significant, see, based less and then, manage see in some around should approach. through they on swaps of less QX. have forecasting hedging do increase, points levels XXXX. in I we in as reviewing it basis constantly like on there. interest baking I our

that's current state. Again, based on

and pay they downs come But cash given then as relatively place, So, if debt, it buybacks, pay subject that's all could I'm and/or viewing again, activity down. steady down generate swap to it and/or those M&A again, holding in we portfolio things. our

So and...

you. model kind absent run So, good to XQ capital? rate the of Okay. is Thank

Yes. Exactly Yes.

was really Hey, I mean, operating an know the just – dollar it I the relative in little U.S. currency am mean us year. and was I it to detailed. EBITDA, in million other the I dollars went strength translating to perspective it a on going as given to foreign – currencies through local of comment to big exchange of currency, $XX local Bryan just to from bit a compared just mean pretty I to XXXX. this impact But

$XXX So, north I of like-for-like have we would a been mean, basis. EBITDA at of million on

I for is – markets these don't $XXX just stable baked think our mean number, into right, of million that's more financial of now that But mean to this I now that the anybody I think it's Certainly, EBITDA. is predict year. I days. So currency difficult

most in XXXX. not incur would be a again would headwind that that likely we So

Thank you. Okay.

Thanks.

ahead. the question [Operator from Please McNamara be next from go And will Brian Canaccord. Instructions]

question. Thanks for my taking Good morning.

it you signs customers equipment For come to deferred to spending, whether of macro the starting murky? in deferred now bit for recover since through? are was with demand, is seeing so, picture confidence a driving commercial if these that foodservice And step what

accelerate back has don't new earlier customers, continue to openings. been our think I you chain think anything Again, about deferred. store going to really comments, if

we seen not that have So slowdown.

we've I think talked the the business have been that may is calls. replacement prior deferred about on some thing, only of

think so about Again, year two chains. do orders last just many about has the historically with our half store with or bigger replacement from business and shifted orders our you come that from the our if new come traditionally openings where pre-COVID,

on the focus stores. some stores, their new focus has So new COVID think, on then deferred I replacements, with first

I year, deferred, trend the this store level that think same was So as it's cycle. think new at if anything for I replacement do that continues XXXX.

been on all And I a is is, so you're the And equipment which about the that thing what and see exciting call is, exciting. obviously James about I our cycle I having innovation. certainly and too, 'XX, cycle with obviously, do technology you replacement going deferred end talked of and year and this about in big replacement and see new with think think there, maybe that back customers. kick talked to we the towards replace this the what's 'XX in think

for So commercial. great I think within a it years us sets of up next couple

signaled to on could for residential. has understood. a than grill Got destocking worse had I another ago? months destocking expected relates At it pretty well it. few And one I grill as least traded publicly and then, you if the your the players, been squeeze in perhaps guess, business, HX is should be

I I us, don't that there surprising I here few is is But expected to mean, ago. what no, remember anything think months we no. don't a

Thank Okay. you.

Company. And is the question ahead. from Please Benchmark go Todd from Brooks next the

Hey, thanks for questions. my taking

as more that as made? investments own with we the far XX that so, do backlogs were are more ability one, realized to First over in efficiently, you the invested or with quickly we feel capital past your production months capabilities where the the

lots So, so made brands. progress there different businesses. across I We've got been brands, lot think lot realizing a XXX we've is of Again, a of benefits. those we've of those

respond to I we're Some to lot to lot infrastructure – not growing of trying capital about a mean, platforms. of of We got – there. thinking throw those backlog. we've are are need longer-term as plays a we're of just kind these

group. our think we where in we're cooking in invested the launching large We've organic to group. a areas innovations see where our market coffee and in our growth platforms, number new have We of across longer-term particularly invested solutions company. our invested platform, We've we going we're ICE packaging opportunities where

certainly us think Certainly, backlogs, longer-term help our as initiatives to the through So they strategic platform they us I we're XXXX are grow but that with mean, the as they we well. I are and making, really going help profitability. to go investments

seeing getting and the I'll So point. areas, automate I more to the think tends factories and that's more trying still been I particularly fabrication as on we're we've really mean benefits and we've to turned more in gone as here, say, we through be pinch fabrication our have, year, speak the we equipment the

So get we'll improvements XXXX. in – kind we say, our as I'll of through continual production gradual go

Okay. Fair enough.

through as step in function really growth a being investments. enhancement 'XX, revenue not just unlocked is It's go year a then. by these to there that's we So further the

Yeah, that's I correct. think

talked that put production just more large seeing your then, you you're Okay. the and you've And more full if project late clients? and food about, quarter, backlog, can, that you ones, the calendar knowing the the typically within build in seasonal processing side about trends year. two solutions Can large together we talk line a get as within Great. quick maybe, that demand for obviously, in I projects. just increasingly on mix the But

from go driver is a equipment business. of backlog, the The shelf-ish or about XXX%, orders, maybe have so, good say in or is I levels, is think that or not such. quite that turns bit I a that predominant I do months it of there right? is I'd and the go pre-COVID increase and modest more little off – a I'll to weeks XXX% little if right, of back As bit and large is parts up math. to but this mean more chunk the

there because XX stay projects into deliver. they the to the talked But take come we've to larger about backlog months XX longer and they

we've to two would and increase projects. past again, grow say again, larger years. the large backlog it’s continue seen that percentage And over a it of is I the by So, take driven

Bryan. Okay. Thanks, Great.

Thanks.

Ladies and gentlemen, this concludes...

Do you see another Okay. one?

concludes our session. this question-and-answer Sorry,

So remarks. over for the I'd conference to management back to turn like closing any

to like of the thank the forward being to just today everybody We'd speaking QX. call and on you end to look for at

you The today's you. conference has Thank now for Thank presentation. Okay. concluded. attending

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