Q4 2024 The Middleby Corp Earnings Call

February 25, 2025

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After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone and to withdraw your question. Please press Star then two please note. This event is being recorded on today's call are Mr. Tim Fitzgerald CEO.

Speaker Change: After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone and to withdraw your question. Please press Star then two please note. This event is being recorded on today's call are Mr. Tim Fitzgerald CEO.

Bryan Mittelman: Now taking a look at 25 for the full year, in commercial and residential, we are expecting at least low single-digit organic revenue growth rates with modest margin expansion. for Food Processing, Organic Revenue Growth is expected to be in the mid-single digits for the year. As I noted earlier, recall that the baseline on food processing margins is now in the 24% range due to recent acquisitions.

Bryan Mittelman: Mr. Bryan Mittelman CFO, Mr. James pool, CTO, and COO and Mr. Steve Spittle CTO.

Speaker Change: Mr. Bryan Mittelman CFO, Mr. James pool, CTO, and COO and Mr. Steve Spittle CTO.

Bryan Mittelman: I'd now like to turn the conference over to Mr. Tim Fitzgerald, Chief Executive Officer. Please go ahead Sir.

Speaker Change: I'd now like to turn the conference over to Mr. Tim Fitzgerald, Chief Executive Officer. Please go ahead Sir.

Good morning.

Bryan Mittelman: Good morning.

Bryan Mittelman: Margins here will likely fall below last year's strong level as the integration processes are just beginning with two acquisitions having been completed late in 2024. Summing it up, for 25 for the total company, we expect to deliver organic revenue growth in the low single digits with profitability growth at rates in excess of our organic revenue growth. Our view is also that revenues are growing sequentially over the course of the year for all of this activity.

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

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

Bryan Mittelman: This morning, we have made several important announcements alongside our 2020 for fourth quarter earnings.

Speaker Change: This morning, we have made several important announcements alongside our 2020 for fourth quarter earnings.

Speaker Change: These announcements include.

Bryan Mittelman: These announcements include.

Speaker Change: The decision to separate our Middleby food processing business into a separate Standalone public company.

Bryan Mittelman: The decision to separate our Middleby food processing business into a separate Standalone public company <unk>.

Speaker Change: Additionally, we are pleased to announce the addition of two new board members to our board of directors.

Bryan Mittelman: Additionally, we are pleased to announce the addition of two new board members to our board of directors. Please.

Speaker Change: Please note there are two separate slide presentations, covering our quarterly earnings and the food processing spin transaction on the Investor page of our website.

Bryan Mittelman: Please note there are two separate slide presentations, covering our quarterly earnings and the food processing spend transaction on the investor page of our website.

Speaker Change: As we've shared over the past several quarters, our board of directors and management team have been conducting a comprehensive review of our business portfolio with the goal of realizing <unk> full value potential.

Bryan Mittelman: As we've shared over the past several quarters, our board of directors and management team have been conducting a comprehensive review of our business portfolio with the goal of realizing <unk> full value potential.

Bryan Mittelman: Please note that this outlook excludes costs which may be incurred to support the food processing spin we have announced today. We will provide updates on those activities throughout the year.

Bryan Mittelman: As part of this process. Our board has unanimously approved a plan to separate our food processing business into a standalone separate public company.

Speaker Change: As part of this process. Our board has unanimously approved a plan to separate our food processing business into a standalone separate public company.

James Pool: I will now turn it over to James for a NAFEM overview. If you come and see us there, you might find me serving ice cream, and I'm hoping to get adventurous and combine that with soda from our absolutely incredible new beverage dispensing platform by Newton to create ice cream floats. Innovation tastes great, but maybe isn't less filling, but I like it, and hopefully so will you.

Speaker Change: This action will create two independent innovative industry leaders, the Middleby Corporation, which will be comprised of the commercial and residential kitchen equipment businesses.

Bryan Mittelman: This action will create two independent innovative industry leaders, the Middleby Corporation, which will be comprised of the commercial and residential kitchen equipment businesses.

Speaker Change: And that'll be food processing.

Speaker Change: And that will be food processing.

James Pool: James. Thank you, Brian. Today, I'd like to take a moment to extend a special invitation to our shareholders, analysts, and prospective investors to come experience Middleby's commercial food service equipment at the North American Food Equipment Manufacturer Show in Atlanta, Georgia. The show runs tomorrow through Friday. You may refer to the accompanying earnings presentation for a detailed overview of our NAFEM setup and insight to what's cooking at Middleby. This year marks our most ambitious presentation for any show. We are featuring nine live cooking vignettes, including two fully operational, high-volume restaurants, one dedicated to smash burgers and fried chicken, and the other to pizza and wings.

Speaker Change: Our team has successfully built a premier food processing business with the necessary scale that now enables us to take this exciting next step in the evolution of the company.

Speaker Change: Which we expect will unlock further value and growth opportunities for both middleby food processing and our remaining middleby kitchen equipment businesses.

Speaker Change: As to market, leading but separate businesses the separation will assure greater strategic and operational focus at each standalone entity allows.

Speaker Change: As to market, leading but separate businesses, the separation will assure greater strategic and operational focus at each standalone entity.

Speaker Change: Allowing each business to implement an optimized capital structure and capital allocation policy to best support growth opportunities, while greatly enhancing the strategic and financial impact from M&A opportunities for each standalone business.

Speaker Change: And and enabling Middleby foot pricing with its best in class growth and margin profile to be valued in line with key food processing peers.

Speaker Change: And enabling middleby food pricing with its best in class growth and margin profile to be valued in line with key food processing peers.

James Pool: Both concepts will be powered by our cutting-edge, embedded, digital, robotic automation solution. Additionally, we will unveil and showcase our latest beverage dispensing technologies from Newton CFV, as Bryan mentioned, the Newton Gravity, and wild goose filling, the Cervisi. Along with a comprehensive lineup of ice solutions from Volodites and IceTro. Be sure to also check out our new innovative ICE, which is one and a quarter by one and a quarter by one and a quarter craft cube solution. Beyond these innovations, our full service coffee cafe will highlight various solutions for Middleby Coffee and Marco, including the Marco Milk Pal, which I discussed on our last earnings call.

Speaker Change: Now to get into the specifics of each company I'll first start with what this means for Middleby food processing.

Speaker Change: As highlighted in our investor deck, and it'll be foot pricing as well positioned as a best in class equipment provider to the bakery and protein industries.

Speaker Change: As highlighted in our investor deck that'll be foot pricing as well positioned as the best in class equipment provider to the bakery and protein industries.

Speaker Change: We are posed for organic growth as we continue to execute on our strategy to be the full line solutions provider of choice by enhancing the ROI and value delivered to our customers.

We are posed for organic growth as we continue to execute on our strategy to be the full line solutions provider of choice by enhancing the ROI and value delivered to our customers.

Speaker Change: We see market expansion opportunities as we extend into attractive adjacent market segments, such as poultry pet and snack food leveraging our existing competencies and.

James Pool: Our enterprise IoT solution, Open Kitchen, will be predominantly featured seamlessly connecting all live equipment at the booth. We invite you to discover how we can quickly transform your kitchen operation from the front of the house with EMS, HVAC, and lighting control, the middle of the house with cold chain monitoring, HACCP reporting, and labor tracking, and the back of the house with equipment connectivity. Open Kitchen is quickly driving to become the IoT standard for the commercial food service industry. Within Open Kitchen, we are also introducing a new prior profitability tool to drive prior connectivity sales and differentiation for Middleby.

Speaker Change: And with a strong track record of M&A, we expect to quickly scale. The platform through continued strategic acquisition, which on a standalone basis, we will be more impactful financially and better understood by shareholders.

Speaker Change: And with a strong track record of M&A, we expect to quickly scale. The platform through continued strategic acquisition, which on a standalone basis will be more impactful financially and better understood by shareholders.

Speaker Change: And our Middleby remained coke commercial and residential kitchen equipment business.

Our middle be remain co commercial and residential kitchen equipment business, we are positioned to capture market opportunities and we will continue with an even greater focus executing on our strategic growth initiatives.

Speaker Change: We are positioned to capture market opportunities and will continue with an even greater focus executing on our strategic growth initiatives.

Speaker Change: We are leading in innovation and are positioned to benefit from accelerating demand for automation boundless kitchens electrification digital technologies and Iot connectivity in the kitchen.

Speaker Change: We're leading in innovation and are positioned to benefit from accelerating demand for automation Mentalist kitchens electrification digital technologies and Iot connectivity in the kitchen.

Speaker Change: We have exciting growth opportunities through our expansion into new categories of ice and beverage with recent launches of new innovations highly relevant to our customers and current market trends.

James Pool: The tool is designed to help restaurant operators understand and optimize their frying processes by providing insights into oil usage per pound of food cooked, oil quality, efficiency, and waste through Open Kitchen's real-time analytics.

We expect to benefit from the differentiated go to market investments we've made over the past several years as we are creating an engine to drive long term organic growth.

Speaker Change: We expect to benefit from the differentiated go to market investments we've made over the past several years as we are creating an engine to drive long term organic growth.

James Pool: I'd like to conclude by acknowledging the Magnificent Seven, seven innovative products selected for the What's Hot, What's Cool, Innovation section at NAPFIN. Middleby is honored to have received more selections than any other manufacturer.

Speaker Change: And we are well positioned to benefit from a recovery at our residential business.

Speaker Change: Which has been strengthened during the market downturn turn through strategic investments in sales and marketing new product launches and.

Speaker Change: Which has been strengthened during the market downturn turn through strategic investments in sales and marketing new product launches and operational initiatives driving profitability and growth opportunities.

James Pool: The Magnificent Seven will be showcased live and will feature the new Pit Hill Pork Fryer, the first commercialized, continuously filtering, high-efficiency fryer at the Vitless Nacho Bar, and the new Invoke Combi, which will be preparing some delicious bites within the center of the booth. Thank you.

Speaker Change: And operational initiatives driving profitability and growth opportunities.

We expect to benefit from the differentiated go to market investments we've made over the past several years as we are creating an engine to drive long term organic growth.

Speaker Change: We intend to execute the separation of the food processing business through a tax free spinoff, which is expected to be completed by early 2026.

Speaker Change: We intend to execute the separation of the food processing business through a tax free spin off which is expected to be completed by early 2026.

James Pool: And we look forward to seeing you at the show.

Unknown Executive: We will now open it up for questions. Thank you.

Speaker Change: Separately I'm very excited to announce the additions of Julie Bauman, and Ed Garden to our board of directors.

Speaker Change: Separately I'm very excited to announce the addition of Julie Bauman and Ed Garden to our board of directors.

And we are well positioned to benefit from a recovery at our residential business.

Unknown Executive: We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys.

Which has been strengthened during the market downturn turn through strategic investments in sales and marketing new product launches and operational initiatives driving profitability and growth opportunities.

Speaker Change: Julian Ed bring a wealth of relevant operating and director experience to Middleby as we implement our forward focused growth strategies execute on our portfolio evolution with the announced spin transaction and drive value for our shareholders.

Speaker Change: Julien <unk> bring a wealth of relevant operating and director experience to Middleby as we implement our forward focused growth strategies.

Unknown Executive: If at any time your question has been addressed, and you would like to withdraw your question, please press star, then two. And at this time, we'll pause momentarily to assemble our roster.

Speaker Change: Execute on our portfolio evolution, with the announced spin transaction and drive value for our shareholders I.

We intend to execute the separation of the food processing business through a tax free spin off which is expected to be completed by early 2026.

Speaker Change: I am confident that Julian Ed will be strong additions to our boardroom as we drive value for shareholders and I could not be more pleased to welcome them to the Middleby Board.

Speaker Change: I'm confident that Julian Ed will be strong additions to our boardroom as we drive value for shareholders and I could not be more pleased to welcome them to the Middleby Board.

Separately I'm very excited to announce the additions of Julie Bauman, and Ed Garden to our board of directors.

Saree Boroditsky: And the first question will come from Saree Boroditsky with Jeffrey. Please go ahead.

Julian Ed's appointments, our continuation of our board refreshment process, which started last year with the additions of Steve Scherger and TGI Shaw to our director group.

Speaker Change: Julian Ed's appointments, our continuation of our board refreshment process, which started last year with the additions of Steve Scherger and TGI Shaw to our director group.

Saree Boroditsky: Good morning. Thanks for taking the question.

Speaker Change: Julian that bring a wealth of relevant operating and director experience to Middleby as we implement our forward focused growth strategies execute at our portfolio evolution with the announced spin transaction and drive value for our shareholders.

Timothy Fitzgerald: I mean, I think we have to start with the decision to separate food processing. So could you just walk us through that decision process? What are the benefits of having the segment operate separately? And then how do you think about the standalone cash generation of food processing and the ability to sustain the acquisition pipeline?

Speaker Change: Throughout this process, we have continued to focus on extending the capabilities of our board and bringing on fresh perspectives.

Speaker Change: I am confident that truly and Ed will be strong additions to our boardroom as we drive value for shareholders that I could not be more pleased to welcome them to the Middleby Board.

We also announced that long standing director Jack Miller has elected to retire from our board.

Speaker Change: We also announced that long standing director Jack Miller has elected to retire from our board.

Timothy Fitzgerald: Good morning, Saree. So we've been considering it for a while. I mean, every year, continuously, the board is always reviewing the portfolio and what we think makes most sense to maximize shareholder value, and really support the growth of all three of those businesses. So I think, you know, we've been building, you know, I said in the comments, the food processing platform, you know, for a while now, and really over the last decade, you know, that's accelerated. I think if you were to go back five years ago, it was not large enough. And I will say it wasn't in the part of the lifecycle of the journey where we could stand it up as a separate standalone business.

Speaker Change: Jack has been instrumental to the success of the company greatly contributing to the growth of Middleby from its small beginnings when the company was only $25 million in revenues and throughout the journey into the global Foodservice leader that we have become today.

Speaker Change: <unk> has been instrumental to the success of the company greatly contributing to the growth of it'll be from its small beginnings when the company was only $25 million in revenues and throughout the journey into the global Foodservice leader that we have become today.

Speaker Change: Julian ebbs appointments are a continuation of our board refreshment process, which started last year with the additions of Steve Scherger and TGI Shaw to our director group.

Speaker Change: Our management team and board are incredibly grateful.

Speaker Change: Throughout this process, we have continued to focus on extending the capabilities of our board and bringing out fresh perspectives.

Speaker Change: Jack for his service to Middleby and our shareholders.

Speaker Change: Jacques for his service to Middleby and our shareholders.

Speaker Change: We also announced that long standing director Jack Miller has elected to retire from our board.

Lastly, I would like to briefly comment on our fourth quarter results we.

Speaker Change: Lastly, I would like to briefly comment on our fourth quarter results.

Speaker Change: We closed 2024 by delivering our strongest margins of the year with all three businesses posting strong results given respective the respective backdrop for each industry.

Speaker Change: Jack has been instrumental to the success of the company greatly contributing to the growth and that'll be from its small beginnings when the company was only $25 billion in revenues and throughout the journey into the global Foodservice leader that we have become today.

Speaker Change: We continue to make progress on our profitability initiatives across the businesses as we execute on supply chain.

Speaker Change: Our management team and board are incredibly grateful to John for his service to Middleby and our shareholders.

Timothy Fitzgerald: But now we feel that we're at that point. And I think, you know, there's, it's benefited from being part of Middleby for a long time to get to this point.

Speaker Change: Take action to drive operational efficiencies and strategically repositioned sales mix to our latest higher margin product innovations.

Speaker Change: Take action to drive operational efficiencies and strategically reposition sales mix to our latest higher margin product innovations.

Speaker Change: Lastly, I would like to briefly comment on our fourth quarter results.

Timothy Fitzgerald: But now I think as a separate company, being part of Middleby will hold back the growth and separating it will accelerate the growth. So we think, you know, it's really, we're excited about it. I mean, I think, you know, the things that I commented on the greater, you know, focus with the management team, not being one of three businesses. And as you can see, in some of the slides that we had, you know, this morning, there's a very strong track record of M&A over a long period of time, which we think will continue on and then perhaps even accelerate.

Speaker Change: Macro conditions in the quarter remained challenged for our commercial and residential business, but are showing signs of gradual improvement as we move through the quarters ahead.

We closed 2024 by delivering our strongest margins of the year with all three businesses posting strong results given respective the respective backdrop for each industry.

Speaker Change: While the food processing business finished the year exceptionally strong.

Speaker Change: We continue to make progress on our profitability initiatives across the businesses as we execute on supply chain.

Speaker Change: And we look to realize continued growth as we head into 2025 with favorable long term drivers.

Speaker Change: Take action to drive operational efficiencies and strategically reposition sales mix to our latest higher margin product innovations.

Speaker Change: We are navigating near term market conditions.

Speaker Change: But as we continue to execute on our strategic initiatives focused on driving sustainable long term organic growth.

Speaker Change: But as we continue to execute on our strategic initiatives focused on driving sustainable long term organic growth with.

Timothy Fitzgerald: So we think that the platform will further scale on a more rapid basis outside of Middleby as a separate standalone company.

Speaker Change: With recent launches of transformative product innovations across all three businesses and the development of our differentiated go to market capabilities, we're competitively well positioned across all three business to expand and realized growth in each segment as we progress through 2025.

While the food processing business finished the year exceptionally strong.

Saree Boroditsky: Thank you.

Saree Boroditsky: And then should we think about the free cash flow conversion of both separate businesses as being 100% or greater? How do we think about that?

Speaker Change: And we look to realize continued growth as we head into 2025 with favorable long term drivers.

Speaker Change: Brian I'll turn it over to you now for further comment on the quarter.

Speaker Change: We are navigating near term market conditions.

Timothy Fitzgerald: Yeah, I mean, it's a little early, we haven't provided, you know, I'll call it specific long range guidance, certainly for the food processing company. But I do think that, you know, a fair assumption, you know, all our businesses really have somewhat similar, you know, cash flow generating characteristics. I appreciate that.

Brian: Thanks, Tim.

Speaker Change: But as we and we continue to execute on our strategic initiatives focused on driving sustainable long term organic growth.

Brian: While challenging market conditions persisted throughout 2024, driving margins and cash flow continued to be demonstrated strengths of ours.

Brian: Challenging market conditions persisted throughout 2024, driving margins and cash flow continue to be demonstrated strengths of ours.

With free cash flows of $229 million in the fourth quarter. We concluded the year with the new record having delivered over $640 million.

Brian: With free cash flows of $229 million in the fourth quarter. We concluded the year with a new record having delivered over $640 million.

Saree Boroditsky: And this one last one on Resi, just given the positive inflection, you know, how are you thinking about that recovery? And what are the incremental margins on that business, given some of the factory investments you've made in recent years? Yeah, so I mean, I think, you know, we're clearly at a long term, cyclical trough, kind of put a bit of that in the deck as well. So I mean, I think there are significant opportunities and unrealized shareholders who kind of go through the next several years. So it's hard to tell what the inflection is going to be on the backdrop of the market with housing, but it is positive.

Brian: Revenues in 2024 declined modestly to around $3 $9 billion.

Speaker Change: Brian I'll turn it over to you now for further comment on the quarter.

Brian: Adjusted EBITDA of $866 million at a 22, 4% margin, which was slightly ahead of last year.

Brian: Adjusted EBITDA of $866 million and a 22, 4% margin, which was slightly ahead of last year.

Tim: Thanks, Tim.

Tim: While challenging market conditions persisted throughout 2024, driving margins and cash flow continue to be demonstrated strengths of ours.

Brian: So the power of our overall system with particularly impressive performance by the food processing segment at 25, 6%.

Tim: With free cash flows of $229 million in the fourth quarter. We concluded the year with a new record having delivered over $640 million.

Brian: GAAP earnings per share were $7 90.

GAAP earnings per share were $7 90.

Brian: Adjusted EPS.

Tim: Revenues in 2024 declined modestly to around $3 $9 billion.

Brian: Which excludes amortization expense and impairment charges non operating pension income as well as other items noted in the reconciliation at the back of our press release was $9 49.

Tim: Adjusted EBITDA of $866 million at a 22, 4% margin, which was slightly ahead of last year.

Timothy Fitzgerald: And we're, you know, we've got a significant, I'll say, tailwinds through the next several years. So I think it'll be kind of gradual as we go through 2025 with some recovery. But you know, that that will pick up steam, we think is in the years going forward.

Brian: Looking at Q4 quarterly revenue returned to a level above $1 billion.

The power of our overall system with particularly impressive performance by the food processing segment at 25, 6%.

Brian: Our adjusted EBITDA of over $251 million was a record at a margin of 24, 8%.

Tim: GAAP earnings per share were $7 90.

Tim: Adjusted EPS.

Brian: Q4, GAAP earnings per share were $2 seven.

Tim: Which excludes amortization expense and impairment charges non operating pension income as well as other items noted in the reconciliation at the back of our press release was $9 49.

Brian: Adjusted EPS was $2 88.

Brian: Food processing was really cooking.

Brian: Four 7% organic revenue growth in the quarter led to revenues of over $219 million the adjusted.

Brian: Four 7% organic revenue growth in the quarter led to revenues of over $219 million. The adjusted EBITDA margin was 29, 6% up 200 basis points versus the prior year.

Tim: Looking at Q4 quarterly revenue returned to a level above $1 billion.

Brian: <unk> EBITDA margin was 29, 6% up 200 basis points versus the prior year.

Tim: Our adjusted EBITDA of over $251 million was a record at a margin of 24, 8%.

Bryan Mittelman: margins higher. And also commercially, we've made a lot of investments around new product, as well as kind of our sales and marketing capabilities. So, you know, as we kind of get to more normalized levels, we think that that is all an exciting part of the story that that shows up in the years ahead.

Brian: With organic growth over the back half of the year.

Brian: With organic growth over the back half of the year. We finished 2024 was $731 million of total revenue and expanded margins by 70 basis points to 25, 6%.

Tim: Q4, GAAP earnings per share were $2 seven.

Brian: We finished 2024 was $731 million of total revenue and expanded margins by 70 basis points to 25, 6%.

Tim: Adjusted EPS was $2 88.

Tim: Food processing was really cooking.

Bryan Mittelman: Yeah, and sorry, this is Brian spanning that a little bit, as you think about the, you know, incremental, certainly, I will say this business will have, you know, the largest incremental benefits as revenues grow, you know, compared to the other segments, given, you know, the low operating leverage, we're seeing right now, right. And you've seen that in our gross profit reporting. So I think the incrementals here can be, you know, over 40%, going forward. And to echo what Tim noted, you know, as we achieve, I'll say revenue levels, you know, consistent with those that we have posted in the past, we will have higher levels of profitability than we achieved in the past, because of, you know, the investments and improvements that have been made in the business.

Tim: Four 7% organic revenue growth in the quarter led to revenues of over $219 million. The adjusted EBITDA margin was 29, 6% up 200 basis points versus the prior year.

Brian: Now considering the impact of fourth quarter acquisitions. The segment run rate revenues now exceed $800 million with a run rate margin of around 24%.

Now considering the impact fourth quarter acquisitions. This segment run rate revenues now exceed $800 million.

Brian: With a run rate margin of around 24%.

Brian: In residential looking at Q4 $185 million of revenue was the sequential increase from Q3.

Tim: With organic growth over the back half of the year. We finished 2024 was $731 million of total revenue and expanded margins by 70 basis points to 25, 6%.

Brian: This was down a modest two 4% versus 2023 and was the slowest decline of the year adjusted.

Brian: This was down a modest two 4% versus 2023 and was the slowest decline of the year.

Tim: Now considering the impact of the fourth quarter acquisitions. This segment run rate revenues now exceed $800 million with a run rate margin of around 24%.

Brian: EBITDA margin was 13% the highest level in one five years.

Brian: <unk> EBITDA margin was 13% the highest level in one five years for 2024, and total revenues were $725 million at roughly 10% margins.

Brian: For 2024, and total revenues were $725 million at roughly 10% margins.

Saree Boroditsky: Appreciate the color.

Tim: In residential looking at Q4 $185 million of revenue was the sequential increase from Q3.

Ross Sparenblek: The next question will come from Ross Sparenblek with William Blair. Please go ahead.

Brian: In commercial Q4 revenues of over $609 million were up sequentially with organic revenues down two 8% year over year, the slowest decline of the year.

Brian: In commercial Q4 revenues of over $609 million were up sequentially with organic revenues down two 8% year over year. The slowest decline of the year margins remained healthy at over 28%.

Ross Sparenblek: Good morning, gentlemen. Good morning.

This was down a modest two 4% versus 2023 and was the slowest decline of the year adjusted.

Timothy Fitzgerald: Hey guys, just sticking with the spin, can we put a finer point on some of the moving parts as we think about, you know, one-time and ongoing dis-energies and maybe the expectations of the tax benefit versus an outright sale of food processing? Yeah, so, I mean, it's tax-free, so it's not a benefit, quote-unquote, but it's tax-avoidant if we were to contemplate other options. But we do see long-term upside in this business, so we really think shareholders benefit it being a separate public company trading on its profile with the margins, the growth characteristic. We think it trades in line with kind of higher industrial companies and that kind of compset.

Brian: <unk> remained healthy at over 28% for.

Tim: EBITDA margin was 13% the highest level in one and a half years for 2024, and total revenues were $725 million at roughly 10% margins.

Brian: For 2024 revenues of $2 4 billion were supported by strong and fairly consistent margins of 27, 4%.

Brian: Given our strong cost control moderated capex and focus on reducing inventory levels, which have declined by over $250 million in two years, we delivered record cash flows.

Brian: Given our strong cost control moderated capex and focus on reducing inventory levels, which have declined by over $250 million in two years.

Tim: In commercial Q4 revenues of over $609 million were up sequentially with organic revenues down two 8% year over year. The slowest decline of the year margins remained healthy at over 28% for 2024 revenues of $2 4 billion.

Brian: We delivered record cash flows.

Brian: Operating cash flows were $687 million for the year with free cash flow conversion of 140%.

Tim: Supported by strong and fairly consistent margins of 27, 4%.

Brian: Our total year end leverage ratio is two times our.

Brian: Our total year end leverage ratio is two times.

Brian: Our balance sheet is strong.

Tim: Given our strong cost control.

Brian: Share repurchases in the fourth quarter were $16 million and we have repurchased an additional $20 million in the open market in the first quarter to date.

Tim: Moderated capex and focus on reducing inventory levels, which have declined by over $250 million in two years, we delivered record cash flows.

Timothy Fitzgerald: From a dis-synergy slash synergy standpoint, I mean, I think one of the philosophies of Middleby is running decentralized. That's been very core to us over a long period of time, so certainly we're an engine for accelerating growth with kind of a lot of our strategies and our core company culture. I mean, I think those things are exportable, and we think, you know, this is kind of Middleby 2.0 as we, you know, think about it with, you know, continuing, you know, with the culture, a lot of the best practices and operating philosophies of the business that we'll port over.

Brian: We are planning further buyback activity at this pace for 2025, and thus would potentially utilize around 20% of our free cash flow in this manner.

Brian: We are planning further buyback activity at this pace for 2025.

Tim: Operating cash flows were 687 million for the year with free cash flow conversion of 140%.

Brian: And thus would potentially utilize around 20% of our free cash flow in this manner.

Tim: Our total year end leverage ratio is two times.

Brian: With respect to 2025 cash generation, we expect free cash flow to again exceed operational net income.

Tim: Our balance sheet is strong.

Tim: Share repurchases in the fourth quarter were $16 million and we have repurchased an additional $20 million in the open market in the first quarter to date.

Brian: Capital spending in 2025, we will be back up to more typical levels around 2% of revenues. We continue to actively manage overall working capital levels. However, we may have a lower inventory reduction this year Nonetheless.

Brian: Capital spending in 2025 will be back up to more typical levels around 2% of revenues. We continue to actively manage overall working capital levels. However, we may have a lower inventory reduction this year.

Bryan Mittelman: But because the operations are largely, you know, central or decentralized, there's not a whole lot of dis-synergies here, so I think, you know, that makes it fairly clear from us, you know, from an operational standpoint for us to separate the business.

Tim: We are planning further buyback activity at this pace for 2025.

Tim: Thus would potentially utilize around 20% of our free cash flow in this manner.

Brian: Nonetheless cash flow generation will remain a real strength for the business.

Tim: With respect to 2025 cash generation, we expect free cash flow to again exceed operational net income.

Brian: Taking a look into the Q1 P&L I will share a few perspectives.

Speaker Change: Taking a look into the Q1 P&L I will share a few perspectives.

Bryan Mittelman: and Ross, this is Brian. We're not, we're not prepared, you know, to specifically quantify, you know, those things today, but in future quarters, we will get into more levels of granularity around, you know, one time costs and such. Yeah, I appreciate that.

Brian: On a year over year basis, and looking at total company revenue, we expect modest revenue growth benefiting from the impact of acquisitions and food processing.

Speaker Change: On a year over year basis, and looking at total company revenue, we expect modest revenue growth benefiting from the impact of acquisitions and food processing, along with having slight margin expansion.

Tim: Capital spending in 2025 will be back up to more typical levels around 2% of revenues. We continue to actively manage overall working capital levels. However, we may have a lower inventory reduction this year Nonetheless cash flow generation will remain a real strength for.

Brian: Along with having slight margin expansion.

Ross Sparenblek: Well, I previously was under the expectation that food processing is more of the M&A engine here, just kind of given the fragment of white space. But with a strong free cash flow profile for RemainCo, can you maybe just update us on what the M&A landscape looks like within commercial and kind of your early capital allocation expectations for the RemainCo business? Yeah, I guess.

Brian: Shifting to an organic view for Q Q1 on a year over year basis revenues in total are likely generally flat.

Speaker Change: Shifting to an organic view for Q Q1 on a year over year basis revenues in total are likely generally flat.

Tim: The business.

Tim: Taking a look into the Q1 P&L I will share a few perspectives.

Brian: The commercial business will have a slow start to the year with the timing of chain orders, so revenues will be down slightly for the quarter.

Speaker Change: The commercial business will have a slow start to the year with the timing of chain orders, so revenues will be down slightly for the quarter.

Tim: On a year over year basis, and looking at total company revenue, we expect modest revenue growth benefiting from the impact of acquisitions and food processing.

Timothy Fitzgerald: So definitely, M&A is the core that, you know, for a long period of time that that continues. However, we're at a different size and scale today. I mean, I think, as you've kind of just noted, you know, for more recent periods, food processing is still in early stages. So it's very fragmented. So it's gotten a bit more of the attention on on M&A. And I think, you know, as a separate company, that's going to become even more clear and more focused. So I think that's one of the things that we're excited about.

Brian: For food processing the timing of project completion was strong in Q4, Q1 will not be as robust organic revenue will be slightly down.

For food processing the timing of project completion was strong in Q4, Q1 will not be as robust organic revenue will be slightly down.

Tim: Along with having slight margin expansion.

In our residential business, we can we expect to continue to see positive momentum.

Shifting to an organic view for Q Q1.

Speaker Change: In our residential business, we expect to continue to see positive momentum, resulting in meaningful year over year growth.

Brian: <unk> and meaningful year over year growth.

Tim: On a year over year basis revenues in total are likely generally flat.

Brian: Now considering performance on a sequential basis. Please recall that seasonality in our business is such that Q1 results and cross across our entire portfolio typically take a modest step down from Q4.

Speaker Change: Now considering performance on a sequential basis. Please recall that seasonality in our business is such that Q1 results and cross across our entire portfolio typically take a modest step down from Q4.

The commercial business will have a slow start to the year with the timing of chain orders, so revenues will be down slightly for the quarter.

For food processing the timing of project completion was strong in Q4, Q1 will not be as robust organic revenue will be slightly down.

Timothy Fitzgerald: As cash flow has grown over time, you know, we've also, you know, kind of contemplated and built into really more recent actions, being able to execute on M&A, while at the same time, really start taking action to return shareholder to capital shareholders through stock repurchases, which is, you know, what we've been doing in the, you know, fourth quarter and the first quarter and Brian alluded to, and, you know, in his comments, so I think it'll be a little bit more, you know, balanced, you know, approaches, given we've got much larger, you know, cash flow to deploy today.

Brian: Residential however could be a positive exception to that trend this year.

Speaker Change: Residential however could be a positive exception to that trend this year.

Brian: As they may demonstrate sequential as well as year over year growth.

Tim: In our residential business, we can we expect to continue to see positive momentum, resulting in meaningful year over year growth.

Speaker Change: As they may demonstrate sequential as well as year over year growth.

Brian: Now taking a look at 25 for the full year and.

Speaker Change: Now taking a look at 25 for the full year.

Brian: In commercial and residential we are expecting at least low single digit organic revenue growth rates with modest margin expansion.

Tim: Now considering performance on a sequential basis. Please recall that seasonality in our business is such that Q1 results and cross across our entire portfolio typically take a modest step down from Q4.

Speaker Change: In commercial and residential we are expecting at least low single digit organic revenue growth rates with modest margin expansion for.

Brian: For food processing organic revenue growth is expected to be in the mid single digits for the year.

Speaker Change: For food processing organic revenue growth is expected to be in the mid single digits for the year.

Brian: As I noted earlier, we call that the baseline on food processing margins is now under 24% range due to recent acquisitions.

Speaker Change: As I noted earlier, we call that the baseline on food processing margins is now under 24% range due to recent acquisitions.

Tim: Residential however could be a positive exception to that trend this year.

Tim: They may demonstrate sequential as well as year over year growth.

Brian: Margins here will likely fall below last year's strong level is the integrate integration processes are just beginning with two acquisitions, having been completed late in 2024.

Timothy Fitzgerald: I think, you know, as you kind of look at RemainCo, the, you know, the platform is built out larger, there's, but however, there still are significant opportunities out there, I think you'll see them be a bit more focused, you know, We think that portfolio will, you know, have significant organic growth opportunities, given the different products, technologies, and kind of backdrop of what's going on in beverage. But there are additional opportunities to further build that ice and beverage platform. So I think that's one of the areas that will continue to be focused on. And I think we've positioned ourselves very nicely there for what we think is going to be driving growth over the next three to five years.

Speaker Change: Margins here will likely fall below last year's strong level is the integrate integration processes are just beginning with two acquisitions, having been completed late in 2024.

Tim: Now taking a look at 25 for the full year in commercial and residential we are expecting at least low single digit organic revenue growth rates with modest margin expansion.

Brian: Summing it up for 25 for the total company.

Speaker Change: Summing it up for 25 for the total company, we expect to deliver organic revenue growth in the low single digits.

Tim: For food processing organic revenue growth is expected to be in the mid single digits for the year.

Brian: We expect to deliver organic revenue growth in the low single digits with profitability growth at rates in excess of our organic revenue growth.

Tim: As I noted earlier, we called it the baseline in food processing margins is now in the 24% range due to recent acquisitions.

Speaker Change: With profitability growth at rates in excess of our organic revenue growth.

Brian: Our view is also that revenues are growing sequentially over the course of the year for all of this segments.

Speaker Change: Our view is also that revenues are growing sequentially over the course of the year for all of this segments.

Margins here will likely fall below last year's strong level as they integrate integration processes are just beginning with two acquisitions, having been completed late in 2024.

Brian: Please note that this outlook excludes costs, which may be incurred to support the food processing spin we've announced today we.

Speaker Change: Please note that this outlook excludes costs, which may be incurred to support the food processing spin we've announced today.

Tim: Summing it up for 25 for the total company.

Brian: We will provide updates on those activities throughout the year.

Speaker Change: We will provide updates on those activities throughout the year.

Tim: We expect to deliver organic revenue growth in the low single digits with profitability growth at rates in excess of our organic revenue growth.

Brian: I will now turn it over to James for Naphtha overview if.

Speaker Change: I will now turn it over to James for Naphtha overview.

Speaker Change: If you come and see US there you might find these serving ice cream and I'm, hoping to get adventurous and combine that with soda from are absolutely incredible new beverage dispensing platform by Newton to create ice cream floats innovation.

Our view is also that revenues are growing sequentially over the course of the year for all of this segments.

Speaker Change: Innovation tastes, great, but maybe isn't less billing, but I like it and hopefully solely U.

Tim: Please note that this outlook excludes costs, which may be incurred to support the food processing spend we've announced today we.

Speaker Change: Innovation tastes, great, but maybe isn't less billing, but I like it and hopefully solely U <unk>.

Speaker Change: James.

Speaker Change: James Thanks.

Speaker Change: Today I'd like to take a moment to extend a special invitation to our shareholders analysts and prospective investors become experienced middle meats commercial foodservice equipment at the North American food equipment manufacturers show in Atlanta, Georgia. This show runs tomorrow through Friday.

Tim: We will provide updates on those activities throughout the year.

Speaker Change: Today I'd like to take a moment to extend a special invitation to our shareholders analysts prospective investors become experience middleby commercial foodservice equipment at the North American food equipment manufacturers show in Atlanta, Georgia. This show runs tomorrow through Friday you.

Tim: I will now turn it over to James for Naphtha overview if.

Speaker Change: Refer to the accompanying earnings presentation for a detailed overview of our naphtha and setup and insight to what's cooking at Middleby.

You may refer to the accompanying earnings presentation for a detailed overview of our naphtha and setup.

Speaker Change: Innovation tastes, great, but maybe isn't less spelling, but I like it and hopefully solely U <unk>.

Speaker Change: Site to what's cooking at Middleby.

Timothy Fitzgerald: So that's certainly an area that we'll continue to focus on opportunistically.

Speaker Change: This year marks our most ambitious presentation for any ship were Fiji, featuring nine live cooking vignettes, including two fully operational high volume restaurants, one dedicated to smash burgers and fried chicken and the other to pizza in ways, both concepts will be powered by our.

James: James Thanks.

Speaker Change: This year marks our most ambitious presentation for any ship were Fiji, featuring nine live cooking vignettes.

Speaker Change: Today I'd like to take a moment to extend a special invitation to our shareholders analysts prospective investors become experienced middle meats commercial foodservice equipment at the North American food equipment manufacturer shell in Atlanta, Georgia. This show runs tomorrow or Friday.

Ross Sparenblek: All right, that makes sense.

Ross Sparenblek: Well, thank you, Tim. Thank you, Bryan.

Ross Sparenblek: I'll leave it there.

Meg Dobre: The next question will come from Meg Dobre with Baird, please go ahead. Thank you. Just maybe start with a clarification in this strategic review process. Where are you on this? Is it complete? Is it still ongoing? Maybe to ask this question more pointedly, is residential also being evaluated for strategic alternatives with something potentially happening down the line? Are there portions of your CFS portfolio? that are being considered for divestiture. I know that you've acquired a lot of businesses over time, and I do wonder if all those brands are as successful as you hoped, or if you might find some better owners for some of those out there.

Speaker Change: <unk> two fully operational high volume restaurants, one dedicated to smash burgers, and fried chicken and the other to pizza and ways. Both concepts will be powered by our cutting edge embedded digital robotic automation solutions. Additionally.

Speaker Change: Cutting edge embedded digital robotic automation solutions.

Speaker Change: Refer to the accompanying earnings presentation for a detailed overview of our naphtha and setup.

Insight to what's cooking at Middleby.

Speaker Change: Additionally, we will unveil and showcase our latest beverage dispensing technologies from neutral Cfd as Brian mentioned, the Newton gravity and while you silly servicing along with comprehensive lineup of IV solutions from fall at ice and ice cream.

Speaker Change: Additionally, we will unveil and showcase our latest beverage dispensing technologies from neutral Cfd as Brian mentioned, the Newton gravity and while you silly that servicing along with comprehensive lineup of IV solutions from fall at ice and ice.

This year marks our most ambitious presentation for any ship were Fiji, featuring nine live cooking vignettes, including two fully operational high volume restaurants, one dedicated to smash burgers and fried chicken and the other to pizza and ways both concepts will be powered by our.

Speaker Change: Be sure to also check out our new innovative ice which is one in the quarter by one in the quarter by one in a quarter craft Q solution.

Speaker Change: Be sure to also check out our new innovative ice which is one in the quarter by one in the quarter by 100, a quarter craft Q solution.

Speaker Change: Cutting edge embedded digital robotic automation solutions.

Speaker Change: Beyond these innovations are full service coffee cafe will highlight various solutions for Middleby coffee and Marco including the Marco milk powder, which I discussed on our last earnings call our.

Speaker Change: Additionally, we will unveil and showcase our latest beverage dispensing technologies from nuclear Cfd as Brian mentioned, the Newton gravity.

Timothy Fitzgerald: So, an update here would be helpful. So, I mean, look, I think we're continuously reviewing the portfolio, right? I mean, just, you know, this announcement is part of, you know, a taking action on something that we think makes... compelling strategic and financial sense for that business at this point in time, but we always review, you know, where we're at with all the businesses and what is the best opportunity to continue to grow those businesses, you know, considering where they're at in the life cycle, you know, what we see, you know, upcoming opportunities, you know, in the future.

Speaker Change: While you silly services, along with our comprehensive lineup of IV solutions fall at ice and ice cream.

Speaker Change: Our enterprise Iot solution open kitchen will be predominantly feature seamlessly connecting all live equipment at the Booth, we invite you to discover how we can quickly transform your fishing operation.

Speaker Change: Be sure to also check out our new innovative ice, which is one of the quarter I wanted to quarter by 100, a quarter craft cube solution.

Speaker Change: The front of the house with MFS, HVAC and lighting control the middle of the house with Cold chain monitoring passive reporting and labor tracking in the back of the house with equipment connectivity open kitchen is quickly driving to become the Iot standards for the commercial foodservice industry.

Speaker Change: The front of the house with Ams, HVAC and lighting control the middle of the house with Cold chain monitoring passive reporting and labor tracking in the back of the house with equipment connectivity open kitchen is quickly driving to become the Iot standards for the commercial foodservice industry.

Speaker Change: Our enterprise Iot solution open kitchen will be predominantly feature seamlessly connecting all live equipment at the booth.

Within open kitchen, we are also introducing a new fryer profitability tool to drive prior connectivity sales and differentiation for Middleby.

Speaker Change: Within open kitchen, we are also introducing a new fryer profitability tool to drive prior connectivity sales and differentiation for Middleby.

Timothy Fitzgerald: And, you know, so I think right now, you know, food processing is in a great place for us to take that next step, right? I mean, I think it will accelerate growth and be a continuation of the journey that we've been on for a long period of time. I mean, I think as we think about residential, it's a phenomenal platform. I mean, we have assembled industry leading brands, even at what is now the trough. You know, we're at very respectable margins. I would argue the margins that we have right now are in line with some of our peers on commercial food service and, you know, and some of the food processing companies out there.

Speaker Change: You did Scott about how we can quickly transform your fishing operation from the front of the house with EMACS HVAC and lighting control the middle of the house with Cold chain monitoring enhanced reporting and labor tracking in the back of the house with equipment connectivity open kitchen is quickly driving to become the Iot.

Speaker Change: The tool is designed to help restaurant operators to understand and optimize their friday processes by providing insights into oil usage per pound to food.

Speaker Change: The tool is designed to help restaurant operators to understand and optimize their friday processes by providing insights into oil usage per pound of food.

Speaker Change: Oil quality efficiency and waste through open kitchens real time analytics I'd.

Speaker Change: Oil quality efficiency and waste through open kitchens real time analytics.

Speaker Change: Standard for the commercial foodservice industry.

Speaker Change: I'd like to conclude by acknowledging the magnificent seven seven innovative products selected for the <unk>.

Speaker Change: Like to conclude by acknowledging the magnificent seven seven innovative products selected for that what's hot what's cool innovations section and naphtha <unk>.

Speaker Change: Within open kitchen, we are also introducing a new fryer profitability tool to drive prior connectivity sales and differentiation for Middleby.

Speaker Change: Cool innovations section and naphtha Middleby is honored to have received more selections at any other manufacturer.

Speaker Change: <unk> is honored to have received more selections at any other manufacturer the magnificent seven we showcase slide and will feature the new port fire. The first commercialized continuously filtering high efficiency fryer at the goodwill Nacho bar and a new invoke combi, which we preparing some delicious.

Speaker Change: The tool is designed to help restaurant operators understand and optimize their friday processes by providing insights into oil usage for food oils.

Speaker Change: Seven we showcase slide and will feature the new Port fire.

Timothy Fitzgerald: And so we see significant margin expansion, knowing that we've been to much higher levels, you know, in the past, and it's a stronger platform today, right? So those are things that we are considering for, you know, where we're at with the journey, you know, of residential, right? So we'll, you know, we're always going to be thinking about what is best for that business to reach its full potential and to maximize shareholder value. But just to press you a little bit on residential, I guess in a theoretical recovery here, what I've heard from you in the past is that when this business is operating in normal volumes, this is maybe a 20% EBITDA margin business.

Speaker Change: First commercialized continuously filtering high efficiency fryer at the vet, what's Nacho bar and a new invoke combi, which we preparing some delicious fights within the center of the pit.

Speaker Change: Oil quality efficiency and waste through open kitchen as real time analytics.

Speaker Change: I'd like to conclude by acknowledging the magnificent seven seven innovative products selected for the what's hot what's cool innovations section that naphtha Middleby is honored to have received more selections at any other manufacturer.

Speaker Change: Within the center of the pit.

Speaker Change: Thank you.

Speaker Change: And we look forward to seeing you at the show we will now open it up for questions.

Speaker Change: Thank you we will now begin the question and answer session.

Speaker Change: To ask a question you May Press Star then one on your Touchtone phone.

Speaker Change: Seven we showcase slide and will feature the new Port fire.

Speaker Change: Ask a question you May press Star then one on your Touchtone phone.

Speaker Change: You're using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: Using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: First commercialized continuously filtering high efficiency fryer.

Speaker Change: Any time your question has been addressed and you would like to withdraw your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.

Speaker Change: If at any time. Your question has been addressed and you would like to withdraw. Your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.

Speaker Change: Nacho bar and a new invoke Tommy what should we be preparing some delicious spikes within the center of the pit.

Timothy Fitzgerald: So, in many ways, this business is dilutive to the overall portfolio from a margin standpoint, and it also carries an inherent degree of cyclicality that, arguably speaking, you do not have in commercial food service. The customers are also different. The way you go to market is different. So, what I'm trying to understand here is, other than where we are in the cycle, Why this business would fit with the Remain Co. longer term and how that would be additive to shareholder value. Well, I think we had similar conversations with that with food processing for many years, right?

Speaker Change: Thank you.

Speaker Change: And we look forward to seeing you at the show we will now open it up for questions.

Speaker Change: And the first question will come from CRE borrow that scheme with Jefferies. Please go ahead.

Speaker Change: And the first question will come from CRE borrow didn't scheme with Jefferies. Please go ahead.

Thank you we will now begin the question and answer session.

To ask a question you May Press Star then one on your Touchtone phone.

Speaker Change: Good morning, Thanks for taking the question I mean, I think we have to start with the decision to separate food processing. So could you just walk us through that decision process. What are the benefits of having this segment operates separately and then how do you think about the standalone cash generation of food processing and your ability.

Speaker Change: You're using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: What are the benefits of having this segment operate separately and then how do you think about the standalone cash generation of food processing and the ability.

Speaker Change: The acquisition pipeline. Thank you.

Speaker Change: And the first question will come from CRE borrow that scheme with Jefferies. Please go ahead.

Timothy Fitzgerald: So I would say it's not so different, right? I think, you know, we've got to You know, taking a long-term approach to build out that that business and then take appropriate action when it was at, you know, it was an opportune time and we were at kind of an appropriate, you know. Buzzer chapter, you know, of its cycle, right? So we're not saying that residential maybe at some point in time, they may be in a, you know, a similar junction, but it's, you know, it's not today, we see significant opportunity for, you know, you know, improvement.

Good morning.

Speaker Change: Good morning.

Speaker Change: So.

Speaker Change: We've been considering it for a while I'm at it every year and continues through the board is always reviewing.

Speaker Change: We've been considering it for a while I mean every year continuously the board is always reviewing the.

Speaker Change: Good morning, Thanks for taking the question I mean, I think we have to start with the decision to separate food processing group. So could you just walk us through that decision process. What are the benefits of having a segment operate separately and then how do you think about the standalone cash generation of food processing and the ability.

Speaker Change: The portfolio and what we think makes most sense to maximize shareholder value.

Speaker Change: The portfolio and what we think makes.

Speaker Change: Both sets to maximize shareholder value.

Speaker Change: And it really support the growth of all three of those businesses. So I think we've been building.

Speaker Change: And then it really support the growth of all three of those businesses. So I think we've been building.

Speaker Change: Comments food processing platform.

Speaker Change: The acquisition pipeline. Thank you.

Speaker Change: For a while now and really over the last decade.

Speaker Change: Thats accelerated.

Speaker Change: Good morning.

Speaker Change: That's accelerated.

Speaker Change: I think if you were to go back five years ago. It was not large enough at all.

Speaker Change: So.

Speaker Change: I think if you were to go back five years ago was not large enough and I'll say it wasn't in the.

Speaker Change: We've been considering it for a while I mean every year, we continue to see the board is always reviewing.

Speaker Change: I'll say it wasn't in the.

Timothy Fitzgerald: And because food processing you know, had been a very lumpy and cyclical business, we had been told by shareholders for many years, and it would have also had lower margins, right. So I, and, you know, we've kind of built it to the point that it that is today that I think now we're excited to unlock a lot of shareholder value and continue on, you know, the journey. So I would say, you know, residential has its own timing and cycle and life of where it is within the Middleby portfolio. Understood.

Speaker Change: Part of the lifecycle of the journey, where we could stand it up as a separate separate standalone business.

Speaker Change: The portfolio.

Speaker Change: Part of the lifecycle of the journey, where we could stand it up as a separate separate standalone business.

Speaker Change: We think it makes most sense to maximize shareholder value.

Speaker Change: But now we feel that we're at that point.

Speaker Change: And then it really support the growth of all three of those businesses. So I think we've been building.

Speaker Change: But I think.

Speaker Change: Theirs.

Speaker Change: And I think.

Speaker Change: There is.

Speaker Change: It's benefited from being part of that will be for a long time to get to this point, but I think as a separate company.

Speaker Change: Comments food processing platform.

Speaker Change: For a while now and really over the last decade.

Speaker Change: Thats accelerated.

Speaker Change: <unk>.

Part of it will be will hold back the growth and separating it will accelerate the growth.

Speaker Change: I think if you were to go back five years ago. It was not large enough and I'll say it wasn't in the.

Speaker Change: <unk> bin.

Speaker Change: Being part of that will be will hold back the growth and separating it will accelerate the growth.

Speaker Change: So I think it's really.

Speaker Change: Part of the lifecycle of the journey, where we could stand it up as a separate separate standalone business.

Speaker Change: We're excited about it I mean I think.

Speaker Change: We're excited about it.

Speaker Change: The things that I can.

Speaker Change: It did.

Speaker Change: Thanks.

Meg Dobre: Last question for me. Just on your outlook in commercial food service, if I heard you correctly, we're starting a little bit slow, maybe slightly negative organic growth. Implicitly, things get much better in the back half to get to low single digit growth.

Speaker Change: On the greater focus with.

Speaker Change: It did.

Speaker Change: But now we feel that we're at that point.

Speaker Change: The greater focus.

Speaker Change: The management team not being one of three businesses and as you can see in some of the slides that we had this morning, there's a very strong track record of M&A over a long period of time, which we think.

Speaker Change: But I think.

Speaker Change: The management team not being one of three businesses and as you can see in some of the slides that we had.

Speaker Change: There is it's benefited from being part of that will be for a long time to get to this point, but I think as a separate company.

Speaker Change: <unk> is a very strong track record of M&A over a long period of time, which we think.

Speaker Change: We will continue on and perhaps even accelerate so we think that the.

Speaker Change: Ill.

Speaker Change: We will continue on and perhaps even accelerate so we think that.

Speaker Change: Being part of it will be will hold back the growth and separating it will accelerate the growth.

Bryan Mittelman: So I guess I'm curious, do you expect to inflect positive from an organic growth in Q2? Or is this all a second half story? And what gives you the visibility that growth here can actually improve? And maybe you can comment in terms of what the headwinds have been in recent years and what gets better. Thank you. This is Bryan. I'll start.

Speaker Change: Platform.

Further scale at a more rapid basis outside of that'll be as except for a separate Standalone company.

Speaker Change: Platform will further scale at a more rapid basis outside of Middleby is except for a separate Standalone company.

Speaker Change: So I think it's really.

Speaker Change: We're excited about it I mean, I think the things that I commented on.

Speaker Change: Thank you and then should we think about the free cash flow conversion of both separate businesses as being 100% or greater how do we think about that.

Speaker Change: The greater focus with the management.

Speaker Change: Thank you and then should we think about the free cash flow conversion of Bullock separate businesses as being 100% of greater how do we think about that.

Speaker Change: <unk> teamed up being one of three businesses and as you can see in some of the slides that we had.

Speaker Change: Yes.

Speaker Change: Yes, I mean, it's a little early we haven't provided specific long range guidance certainly for the food processing company, but I do think that.

Speaker Change: It'll early we haven't provided.

Speaker Change: <unk> is a very strong track record of M&A over a long period of time, which we think.

Speaker Change: Specific long range guidance, certainly for the food processing company, but I do think that.

Speaker Change: We'll continue on and perhaps even accelerate so we think that the.

Bryan Mittelman: I'll call it on the number side a little bit and turn it over to Steve for some of the market commentary. We do think things improve sequentially throughout the year. In terms of, I'll say, doing some math, the one nuance we have as we will compare 25 to 24 is that Q2-24 was the high point. So I'm not going to yet note specifically whether we'll eclipse Q2 of 24 and 25. Obviously, the comps get a little bit easier in the back half of the year. Having said that, we're really looking at things over the perspective of a year and do expect generally improving conditions and hopefully delivering that revenue.

Speaker Change: A fair.

Speaker Change: Platform will further scale.

Speaker Change: Assumption all our businesses really have somewhat similar.

Speaker Change: Rapid basis outside of it'll be as a suffer a separate standalone company.

Speaker Change: Flow generating characteristics.

Speaker Change: Cash flow generating characteristics.

Speaker Change: I appreciate that and then this one last one on Rajeev just given the positive inflection now.

Speaker Change: Thank you and then should we think about the free cash flow conversion of both separate businesses as being 100% of greater how do we think about that.

Speaker Change: I appreciate that and then one last one on <unk> just given the positive inflection now how are you thinking about that recovery and what are the incremental margins on that business given some of the factory investments you've made in recent years.

Speaker Change: How are you thinking about that recovery and what are the incremental margins on that business given some of the factory investments you've made in recent years.

Speaker Change: Yes.

Speaker Change: A little early we haven't provided I'll call. It specific long range guidance certainly for the food processing company, but I do think that.

Speaker Change: So I think.

Speaker Change: Yes.

Speaker Change: Yes, so I mean I think.

Speaker Change: We're clearly at a long term cyclical trough kind of put a bit of that in the deck as well.

Speaker Change: A fair assumption.

Speaker Change: We're clearly at a long term.

Speaker Change: Assumption all our businesses really have somewhat similar.

Speaker Change: Cyclical trough kind of put a bit of that in the deck as well.

Speaker Change: Cash flow generating characteristics.

Speaker Change: So I mean, I think there are significant opportunities and unrealized shareholders should we kind of go through the next several years so.

Speaker Change: I think there are significant opportunities and unrealized shareholders, we kind of go through the next several years so.

Speaker Change: I appreciate that and just one last one on <unk> just given the positive inflection now.

Speaker Change: Hard to tell what the inflection is going to be the backdrop of the market with housing, but it is positive and we're we've got a significant I'll say.

Speaker Change: How are you thinking about that recovery and what are the incremental margins on that business given some of the factory investments you've made in recent years.

Speaker Change: It's hard to tell what the inflection is going to be on the backdrop of the market with housing, but it is positive and we are.

James Pool: I noted, but Steve, I'll give it to you for some market perspectives.

Speaker Change: Got a significant.

Speaker Change: <unk>.

Speaker Change: Tailwind through the next several years. So we think it will be kind of gradual as we go through 2025 with some recovery, but that will pick up steam we think as the years going forward.

Speaker Change: So I mean I think.

Speaker Change: <unk>.

Speaker Change: And a tailwind through the next several years. So I think it will be kind of gradual as we go through 2025 with some recovery, but that will pick up steam we think as the years going forward.

James Pool: Yeah, thank you, Bryan.

James Pool: Good morning, Meg. I would call out maybe three specific areas, Meg, that gives us confidence in really the year progressing in a positive direction. We talked a lot about new store openings with our bigger chain customers, which they've gone back to the last couple of years. I think, unfortunately, we have seen the last couple quarters of those new store openings being pushed out for a number of different reasons. ranges from everything from weather to obviously the fires out west, snow, flooding, etc. has certainly impacted construction. It's been allocation of personnel to actually build restaurants, and just some of the broad macro challenges that, you know, the larger restaurant chains are facing.

Speaker Change: We're clearly at a long term cyclical trough kind of put a bit of that in the deck as well.

So I mean, I think there are significant opportunities and unrealized shareholders, who can kind of go through the next several years. So.

Speaker Change: We had been operating the business into the.

Speaker Change: We had been operating the business into the mid.

Speaker Change: Mid to high teens.

Speaker Change: If you were to go back pre.

Speaker Change: Hard to tell what the inflection is going to be on the backdrop of the market with housing, but it is positive and we're we've got a significant I'll say.

Speaker Change: If you were to go back.

Speaker Change: Pre COVID-19.

Speaker Change: Covid.

Speaker Change: <unk> fundamentally is much stronger today.

Speaker Change: The business fundamentally is much stronger today.

Speaker Change: What is really a tough period relative to what it was in those years, we've certainly taken a lot of actions to improve.

Speaker Change: And what is really a tough period relative to what it was in those years, we've certainly taken a lot of actions to improve.

Speaker Change: Tailwind through the next several years, so I think it will be kind of gradual as we go through 2025 with some recovery, but that will pick up steam we think as the years going forward.

Speaker Change: The operation of the business, which drives margins higher and also commercial we've made a lot of investments around new product as well as kind of our sales and marketing capabilities.

Speaker Change: The operation of the business, which drives margins higher and also commercial we've made a lot of investments around new product as well as kind of our sales and marketing.

Speaker Change: We had been operating the business into the <unk>.

James Pool: I think the positive there is, is if we look at our collective group of top chain customers, and we compare their 25 build plans, holistically for the entire year, knowing stuff does push, you know, and move from quarter to quarter, that the 25 build plans are up over 24. So I think we're pretty confident in our chain customers in their new store build plans for this year over 24. I think the other thing we're seeing with our chain customers is knowing that opening stores has been more challenging. I do think you're seeing them add in sales layers to their existing footprints to try and capture market share.

Speaker Change: Mid to high teens.

Speaker Change: Kind of if you were to go back to.

Speaker Change: Capabilities, so we kind of get to more normalized levels. We think that that is all an exciting part of the story that shows up in the years ahead.

Speaker Change: Pre COVID-19.

Speaker Change: <unk> fundamentally is much stronger today.

Speaker Change: Sorry, this is Brian spending in that a little bit as you think about the incremental certainly I would say this business will have the largest incremental benefits as revenues grow compared to the other segments given the low operating leverage.

Speaker Change: And what is really a tough period relative to what it was in those years, we've certainly taken a lot of actions to improve.

Speaker Change: In theory. This is Brian spending in that a little bit as you think about the incremental certainly I would say this business will have the largest incremental benefits as revenues grow compared to the other segments given the low operating leverage.

Speaker Change: Seeing right now right.

Speaker Change: <unk> seen that in our gross profit reporting so I think the incrementals here can be over 40% going forward and to Echo what Tim noted as we achieve let's say revenue levels consistent with those that we have posted in the past.

Speaker Change: We're seeing right now right and you have seen that in our gross profit reporting. So I think the incrementals here can be over 40% going forward and to Echo what Tim noted as we achieve let's say revenue levels consistent with those that we have posted in the past.

Speaker Change: Capabilities, so we kind of get to more normalized levels. We think that that is all an exciting part of the story that shows up in the years ahead.

James Pool: So that's where we're seeing beverage really start to pick up. That's going from being a concept to being actual, you know, reality in Anglia.

Speaker Change: And Sarah this is Brian spending a little bit as you think about the incremental certainly I will say this business will have the largest incremental benefits as revenues grow compared to the other segments given the low operating leverage we're seeing right now right.

Speaker Change: We will have higher levels of profitability than we achieved in the past because of the investments and improvements that had been made in the business.

James Pool: So that's the view on chains. I would say just two more things. When we look at more of the general market in the U.S., MOSSI, which is our, you know, association of reps here in the U.S., tracks every quarter, their quality and consultant activity. If you look at their progression from the fourth quarter to the first quarter already, they see a very positive uptick in consultant and quoting activity to the general market, which aligns with what we're seeing from our reps and our dealers. So I think you're seeing that pipeline more or less build in the general market.

Speaker Change: I appreciate the color. Thank you.

Speaker Change: The next question will come from Ross and Blake.

Speaker Change: <unk> seen that in our gross profit reporting so I think the incrementals here can be over 40% going forward and to Echo what Tim noted as we achieve I'll say revenue levels consistent with those that we have posted in the past.

Speaker Change: William Blair. Please go ahead.

Speaker Change: Hey, good morning, gentlemen.

Speaker Change: Good morning morning.

Hey, guys just sticking with the spin can you put a finer point on some of the moving parts as we think about one time and ongoing dis synergies and maybe.

Speaker Change: Hey, guys just sticking with the spin can you put a finer point on some of the moving parts as we think about one time and ongoing dis synergies and maybe the expectations of the tax benefit versus outright sale.

Speaker Change: We will have higher levels of profitability than we achieved in the past because of the investments and improvements that had been made in the business.

Speaker Change: The expectations of the tax benefit versus an outright sale.

Speaker Change: Food processing.

James Pool: And I think the third thing I would call out, if you picked up on, you know, the international markets that we talked about, I think we're very positive on what we've seen in our European divisions, knowing that there are some challenges in that market. But we've seen more and more people for innovation kitchens in both Madrid and in the U.K. We're opening a new innovation kitchen in Munich this summer, so see Germany is a big opportunity for us. So really see Europe actually with a lot of momentum as we go into this year.

Speaker Change: Food processing.

Speaker Change: I appreciate the color. Thank you.

Speaker Change: Yes, so I mean, its X rate so.

Speaker Change: Benefit corporate its tax avoided if we were to.

Speaker Change: The next question will come from Ross <unk> with William Blair. Please go ahead.

Speaker Change: Benefit corporate its tax avoided if we were to.

Speaker Change: Contemplate it other options, but we do see.

Speaker Change: Contemplate.

Speaker Change: Other options.

Ross: Hey, good morning, gentlemen.

Speaker Change: Long term upside in this business, so we really think shareholders benefit.

Speaker Change: We do see.

Speaker Change: Good morning, good morning.

Speaker Change: Long term upside in this business, so we really think shareholders benefit.

Speaker Change: Hey, guys just sticking with the spin can you put a finer point on some of the moving parts as we think about onetime and ongoing dis synergies and maybe.

Speaker Change: Being a separate public company trading on its profile with the margins the growth characteristic we think it.

Speaker Change: A separate public company trading on it.

Speaker Change: Our profile with the margins the growth characteristics, we think it.

Speaker Change: The expectations of the tax benefit versus an outright sale.

Speaker Change: Trade in line with kind.

Speaker Change: Food processing.

Speaker Change: At a higher.

Speaker Change: Industrial.

James Pool: So it's really the change with the new stores, it's the quoting and consultant activity, and I think some of the international markets that give us the confidence for the rest of this year, Meg. And we did grow in Q4 internationally. Correct.

Speaker Change: Yes, so I mean, its expiry so no benefit for corporate it's tax avoid if we were to.

Speaker Change: <unk>.

Speaker Change: Kind of comp set.

Speaker Change: The from a dis synergy slush synergy standpoint, but I think one of the philosophies of Middleby is running decentralized thats been very core to us over a long period of time. So certainly we're in etch and for accelerating growth with kind of a lot of our strategies at our core company culture I would think.

Speaker Change: Contemplate.

Speaker Change: Other options, but we do see.

Speaker Change: Long term upside in this business, so we really think shareholders benefit.

Speaker Change: A separate <unk>.

Jeff Hammond: The next question will come from Jeff Hammond with KeyBank Capital Markets. Please go ahead.

Speaker Change: Click company trading on it.

Speaker Change: Profile with the margins the growth characteristics, we think.

Jeff Hammond: Hey, good morning. Morning, Jeff.

Speaker Change: In line with kind of higher.

Speaker Change: Those things are exportable, and we think this is kind of little bit to point out as we can.

Jeff Hammond: Just last one I had on the spin, can you just talk about what you think the leverage profiles of each of the businesses are going to be? Do you lean more leverage on RemainCo and leave the balance sheet to Rye for acquisitions or is it more balanced? Yeah, so we're still a year out from executing the spin, right? So I think, you know, that things will evolve during the course of the year. But on balance, we would expect less leverage, less leverage on the food processing business kind of given the M&A opportunities, you know, post spin.

Speaker Change: Industrial.

Speaker Change: Companies in that.

Speaker Change: Think about it with.

Speaker Change: <unk> got a comp set.

Speaker Change: Continuing with the culture, a lot of the best practices and operating philosophies of the business that will.

Speaker Change: From a dis synergy slush synergy standpoint of it I think one of the philosophies of Middleby is running decentralized thats been very core to us over a long period of time, So certainly where an engine for accelerating growth with kind of a lot of our strategies at our company culture.

Speaker Change: Port over.

Speaker Change: Because the operations are largely central or decentralized.

Speaker Change: Theres not a whole lot of dis synergies here.

Speaker Change: I think that makes it fair.

Speaker Change: Fairly clear from us from.

Speaker Change: Those things are exportable and we think this is kind of it will be two point, though as we think about it with.

Speaker Change: From an operational standpoint for us to separate the business.

Speaker Change: And welcome Brian we're not we're not prepared to specifically quantify.

Speaker Change: Continuing with the culture, a lot of the best practices and operating philosophies of the business that will.

Speaker Change: Those things today, but in future quarters, we will get into more levels of granularity around onetime costs and such.

Timothy Fitzgerald: Okay, and then in terms of adding Ed Garden to the board, can you maybe just I didn't see the 8K, I don't know if it's out yet, something, I think you mentioned cooperation agreement, maybe some of the key tenants in there, and if there's any kind of... You know, early feedback you've gotten, you know, from him or his group, you know, that have kind of been built into this strategic plan.

Speaker Change: It over because the operations are largely set for our decentralized.

Speaker Change: I can appreciate that.

Speaker Change: Well previously was under the expectation that food processing is more of the M&A engine here, just kind of given the fragmented white space with a strong free cash flow profile for remain co can you maybe just update us on what the M&A landscape looks like in commercial and kind of your early capital allocation expectations for that business.

Speaker Change: There's not a whole lot of dis synergies here.

Speaker Change: So I think that makes it fairly.

Speaker Change: Fairly clear from us from.

Speaker Change: From an operational standpoint for us to separate the business.

Speaker Change: Alright.

Speaker Change: We're not prepared to specifically quantify.

Timothy Fitzgerald: Yeah, so maybe I'll just kind of start with the board refreshment overall, because that's been a process we've been going through for a couple of years. We had brought on two new board members with Steve Scherger and Deja Shaw, which has been tremendous. So we've been excited about that, and they've contributed greatly to our board. That process continued on as we kind of moved through the back half of last year. So I think we had a robust process that we were going through, thinking about the capabilities that we wanted to have to expand the board and, again, bring out fresh perspectives.

Speaker Change: Those things today, but in future quarters, we will get into more levels of granularity around onetime costs and such.

Todd: Yes, I guess Todd.

Todd: So definitely M&A is before that for a long period of time that continues however, we're at a different size and scale today I mean, I think as you.

Speaker Change: Yes, I can appreciate that.

Speaker Change: Well previously within the expectation that the processing is more of the M&A engine here, just kind of given the fragmented white space with a strong free cash flow profile for remain co can you maybe just update us on what the M&A landscape looks like in commercial and kind of your early capital allocation expectations for zinc business.

You've got to just noted.

Todd: Our recent periods food processing.

Todd: Still in the early stages. So it's a very fragmented so it's gotten a bit more.

Todd: The attention.

Todd: On M&A and I think as a separate company thats going to become even more clear and more focused so I think thats one of the things that we're excited about this cash flow has grown over time, we've also.

Speaker Change: Yes, I guess.

Speaker Change: So definitely M&A is before that.

Speaker Change: For a long period of time.

Speaker Change: 10 years, however, we're at a different size and scale today, I mean I think as.

Todd: We've contemplated it built into really more recent actions.

Speaker Change: You've got to just noted for <unk>.

Todd: Being able to execute on M&A, while at the same time really start take.

Speaker Change: Recent periods food processing.

Timothy Fitzgerald: So we were kind of in later stages of bringing on two new members alongside Jack Millers, announced retirement, who had been a tremendous board member over many years. And so, you know, as Ed kind of came into the fold, we've had very constructive conversations, sharing of perspective. So, you know, truly, we are very excited to have Ed join the board. I think he's going to add a lot of, you know, financial, investor, operational expertise inside, you know, capabilities. So that's just kind of, you know, aligned.

Speaker Change: Still in the early stages. So it's a very fragmented so it's gotten a bit more.

Todd: <unk> taken extra return shareholder capital.

Todd: Capital to shareholders through stock repurchases, which is what we've been doing.

Speaker Change: The attention.

Speaker Change: M&A and I think as a separate company thats going to become even more clear and more focused so I think thats one of the things that we're excited about this cash flow has grown over time, we've also.

Todd: <unk> fourth quarter, and the first quarter and Brian alluded to it.

Todd: His comments, so I think it will be a little bit more balanced approaches given we've got much larger cash flow.

Speaker Change: Kind of contemplated in it built into really more recent actions.

Todd: To deploy today.

Todd: I think as you kind of look at remain co.

Speaker Change: Being able to execute on M&A, while at the same time.

Todd: The platform is built out.

Start.

Speaker Change: Taken extra return shareholder capital to shareholders through stock repurchases, which is what we've been doing.

Todd: Larger.

Todd: But however, there still are significant opportunities out there I think you'll see them be a bit more focused.

Speaker Change: <unk> fourth quarter, and the first quarter and Brian alluded to it.

Particularly on the ice and beverage platform.

Speaker Change: In his comments, so I think it will be a little bit more balanced.

Todd: I think thats something that we have also been excited to have built in scale relatively quickly here.

Speaker Change: Broaches.

Speaker Change: We've got much larger cash flow.

Jeff Hammond: You know, there is a cooperation agreement that's out there on an AK, but it's got policy kind of standard, you know, standstill confidentiality provisions in it. Okay, thanks.

The thing about the last five years to seven years it has a larger market.

Speaker Change: To deploy today.

Speaker Change: I think as you kind of look at remain co.

Todd: I continue to say, we're still a new player, but you can see it's meaningful to our revenues and it's already a very highly profitable business. So.

Speaker Change: The platform is built out.

Speaker Change: Larger.

Speaker Change: But however, there still are significant opportunities out there I think youll see that would be a bit more focused.

Todd: We're pretty happy with the portfolio that we've got right now and we think that portfolio will have.

Speaker Change: Particularly the ice and beverage platform, but.

Todd: Significant organic growth opportunities given the different products technologies and kind of backdrop with whats going out in beverage, but there are additional opportunities to further build that ice and beverage platform. So I think thats one of the areas that will continue to be focused on that.

Bryan McNamara: The next question will come from Bryan McNamara with Canon Corps Genuity. Please go ahead.

Speaker Change: I think thats something that we have also been excited to have built in scale relatively quickly here.

Bryan McNamara: Morning, guys. Thanks for taking the questions. I know you mentioned you regularly review the portfolio, but when was the official strategic review launched? Did that date back to the J.B. T. Murrell transaction last April?

Speaker Change: Talking about the last five years to seven years it has a larger market.

Speaker Change: I continue to say, we're still a new player, but you can see it's meaningful to our revenue. So it's already a very highly profitable business. So.

Timothy Fitzgerald: And is holding on to the residential business at this point just a function of nursing that business back to health before you contemplate a separation or so? So again, we're, you know, we're, we continuously have been reviewing the portfolio. So that, that was not only last year, that was the year before. So I mean, that is something our board does, does regularly. I mean, I think with these things, they evolve. I mean, certainly, we were looking at, you know, many different options as we entered the year last year. And then I think as we started evolving, what we thought might be the most strategic option to unlock shareholder value for the long term.

Todd: Technology overall, I mean, I think we've.

Todd: Really positioned ourselves.

Speaker Change: We're pretty happy with the portfolio that we've got right now and we think that portfolio will have.

Todd: As kind of the.

Todd: The leader.

Todd: At automation controls Iot.

Speaker Change: Significant organic growth opportunities given the different products technologies and kind of backdrop with whats going out in beverage, but there are additional opportunities to further build that ice and beverage platform. So I think thats one of the areas that will continue to be focused on it and then just.

Todd: A lot of that has been a combination of our organic investments as well as some of the M&A activity that we've had so I.

Todd: I think we want to ensure that we're gapping the competition and I think we've positioned ourselves very nicely. There for what we think is going to be driving growth over the next three to five years. So that's certainly an area that will.

Speaker Change: Technology overall, I mean, I think we've.

Speaker Change: Really positioned ourselves.

Todd: We continue to focus on.

Speaker Change: Got it.

Todd: <unk>.

Speaker Change: The leader.

Speaker Change: Alright that makes sense well. Thank you Tim Thank you Brian.

Speaker Change: At automation controls Iot.

Timothy Fitzgerald: You know, that was, you know, probably, you know, mid year, when we made that kind of more of a official comprehensive review, bringing on, you know, advisors in that regard. Look, the residential business, you know, you know, I would not frame it, you know, the way, you know, you did. I mean, I think we, again, it is a tough period for residential. There's no question about it, where housing, existing home sales, remodels are, it's disrupted operationally, even by trying to, you know, execute in the marketplace, because getting contractors, electricians, etc. I mean, I think that's been pressure on longer lead time, you know, products in the housing market.

Speaker Change: A lot of that has been a combination of our organic investments as well as some of the M&A activity that we've had so.

Speaker Change: The next question will come from Mig <unk> with Baird. Please go ahead.

Speaker Change: Thank you just maybe to start with a clarification in this strategic review process.

Speaker Change: I think we want to ensure that we're gapping the competition and I think we've positioned ourselves very nicely. There for what we think is going to be driving growth over the next three years to five years. So that's certainly an area that will.

Speaker Change: Where are you on this is it complete as it is still ongoing and maybe to ask this question more pointedly.

Speaker Change: Is it residential also being evaluated for strategic alternatives.

Speaker Change: <unk> continued to focus on Opportunistically.

Thank You: Alright that makes sense. Thank you Tim Thank you Brian.

Speaker Change: With something potentially happening down the line.

Speaker Change: The next question will come from Mig <unk> with Baird. Please go ahead.

Speaker Change: Are there portions of of your CFS portfolio.

Speaker Change: Thank you just maybe to start with a clarification in this strategic review process.

Speaker Change: That are being considered for divestiture.

Speaker Change: I know that you've acquired a lot of businesses over time.

Speaker Change: Where are you on this is it complete as it is still ongoing and maybe to ask this question more pointedly.

Speaker Change: I do wonder if all of those brands are as successful as you hoped or if you.

Speaker Change: You might find some better owners for some of those out there. So an update here would be helpful.

Speaker Change: Is residential also being evaluated for strategic alternatives.

Speaker Change: So I mean look I think we are continuously reviewing the portfolio right. I mean, just this announcement is part of.

Speaker Change: With something potentially happening down the line.

Speaker Change: Are there portions of of your CFS portfolio.

Speaker Change: A taking extra that's something that we think makes <unk>.

Speaker Change: Selling strategic.

Speaker Change: That are being considered for divestiture.

Speaker Change: And financial sets for that business.

Speaker Change: I know that you've acquired a lot of businesses over time.

Speaker Change: At this point in time, but we always review.

Speaker Change: I do wonder if if all of those brands are as successful as you hoped or if you.

Speaker Change: Where we're at with all the businesses and what is the best opportunity.

You might find some better owners for some of those out there. So an update here would be helpful.

Speaker Change: To continue to grow those businesses.

Speaker Change: <unk>, where they're at in the lifecycle.

Speaker Change: Yes, so I mean look I think we are continuously reviewing the portfolio right.

Speaker Change: What we see upcoming.

Speaker Change: <unk>.

Speaker Change: <unk> and.

Speaker Change: Announcement is part of.

Speaker Change: In the future.

Speaker Change: A taking extra that's something that we think makes.

Speaker Change: And so I think right now food processing is in a great place for us to take that next step right. I mean, I think it will accelerate growth and be a continuation of the journey that we bid on for a long period of time I mean, I think as we think about residential.

Speaker Change: Pelling strategic.

Speaker Change: And financial sets for that business.

At this point in time, but we always review.

Timothy Fitzgerald: You know, that being said, you know, we always will continue to review the portfolio, what is the best opportunities for each of the businesses for the long term and to create shareholder value. But, you know, we think that The residential business, you know, again, presents probably some of the higher growth and higher margin expansion opportunities as we go through the next several years, kind of flipping it from where we are to where we think we will be.

Speaker Change: Where we're at with all the businesses and what is the best opportunity.

Speaker Change: To continue to grow those businesses.

Speaker Change: It's a phenomenal platform, we have assembled an industry leading brands.

Speaker Change: <unk> were there at the lifecycle.

Speaker Change: What we see upcoming.

Speaker Change: Even at what is now the trough we're at very respectable margins I would argue the margins that we have right now.

Speaker Change: Opportunities in.

Speaker Change: In the future.

Speaker Change: And so I think right now.

Speaker Change: Are in line with some of our peers.

Speaker Change: Food processing is in a great place for us to take that next step right. I mean, I think it will accelerate growth and be a continuation of the journey that we've been on for a long period of time.

Commercial foodservice.

Some of the food processing companies out there.

Speaker Change: And so we see significant margin expansion, knowing that we've been to much higher levels in the <unk>.

Bryan McNamara: Great, that's helpful. Secondly, on commercial food service, can you talk about your price and volume expectations for 2025 and compare that to recent years? Are volumes expected to be negative? No, I mean, I think the pricing benefits, you know, for 25 are modest, you know, at best. We haven't maybe had the same level of pricing actions to start this year that we have in prior years, as you look at what's kind of cumulatively, you know, happened over the past, let's say, four years or so. So I think, you know, we are in a in a year here where it will be more volume driven than than price driven.

Speaker Change: I think as we think about residential.

Speaker Change: Past and it's a stronger platform to date right. So those are things that we are considering for where we're at with the journey.

Speaker Change: It's a phenomenal platform I mean, we have assembled an industry leading brands.

Speaker Change: Even at what is now the trough we're at very respectable margins I would argue the margins that we have right now.

Speaker Change: Residential right. So we're always going to be thinking about what is best for that business to reach its full potential and to maximize shareholder value.

Speaker Change: In line with some of our peers.

Speaker Change: Commercial foodservice and.

Speaker Change: But just to press you a little bit on residential I guess in a theoretical recovery here what I've heard from you in the past is that when this business is operating at normal volumes. This is maybe a 20% EBITDA margin business.

Speaker Change: Some of the food processing companies out there.

Speaker Change: And so we see significant margin expansion, knowing that we've been to much higher levels.

Speaker Change: And it's a stronger platform to date right. So those are things that we are considering for.

Speaker Change: So in many ways. This business is dilutive to the overall portfolio from a margin standpoint.

Speaker Change: We're at with the journey.

Speaker Change: Residential right. So we're always going to be thinking about what is best for that business to reach its full potential and to maximize shareholder value.

Speaker Change: And then also carries an inherent degree of cyclicality that arguably speaking you do not have in commercial foodservice customers are also different when you go to market is different.

Bryan McNamara: Great. And then finally, I guess for just your restaurant customers, how would you characterize the current operating environment? You have big players really leaning into value for, you know, limited time offers going from one month to one year. You said you're confident in your stores opening plans, I guess your store customers opening plans this year.

But just to press you a little bit on residential I guess in a theoretical recovery here what I've heard from you in the past is that when this business is operating at normal volumes. This is maybe a 20% EBITDA margin business.

Speaker Change: So what I'm trying to understand here is other than where we are in the cycle.

Speaker Change: Why this business would fit with the remain co longer term and how that would be additive to shareholder value.

Bryan McNamara: I guess what drives that confidence kind of given the mid-year surprise in 2024? Thank you. Yes, it's a great question. I think, yes, there has been this push towards value that I think has probably been more in the the traditional fast food QSR segment. I think what you're seeing, though, is I think you're seeing some of the more fast casual dining concepts really start to thrive. I mean, I give so many of them a lot of credit for thinking creatively about adopting new operational initiatives, new technology initiatives, to help with throughput, to help drive labor costs down, to help drive food costs down.

Speaker Change: In many ways. This business is dilutive to the overall portfolio from a margin standpoint.

Speaker Change: Well I think we had similar conversations with that with food processing for many years right. So I would say, it's not so different I think.

Speaker Change: And it also carries an inherent degree of cyclicality that arguably speaking you do not have in commercial foodservice customers are also different when you go to market is different.

Speaker Change: We've got a.

Speaker Change: Taking a long term approach to build out that business and then take appropriate action when it was that it.

Speaker Change: So what I'm trying to understand here is other than where we are in the cycle.

Speaker Change: It was an opportune time, and we were at kind of an appropriate.

Speaker Change: Why this business would fit with the remain co longer term and how that would be additive to shareholder value.

Speaker Change: Chapter of its.

Speaker Change: <unk> cycle right. So we're not saying that residential maybe at some point in time, they may be in a similar direction, but it's.

Speaker Change: Well I think we had similar conversations without with food processing for many years right. So I would say it's not so different.

Bryan McNamara: And I think you're seeing those actually thrive in this scenario. So it's a little bit of a nuance that, yes, there are challenges around value, but you're also seeing, again, those, I'd say, more forward thinking chains, again, really adopt the new technologies and try to drive, you know, their costs overall down to give a better product experience to consumers. So I think that's very positive. I think in terms of what gives us confidence is, you know, all the chains are very open with their new store plans. And I do believe that if you look at them, there's so many new markets that they're entering in, especially from an international standpoint.

Speaker Change: It is not today, we see significant opportunity for.

Speaker Change: <unk>.

Speaker Change: We've got a.

Speaker Change: Prove it and because food processing.

Speaker Change: Taking a long term approach to build out that business and then take appropriate action when it was at.

Speaker Change: It had been a very lumpy and cyclical business. We had been told by shareholders. Many years. It would had also had lower margins right. So.

Speaker Change: It was an opportune time that we're at kind of an appropriate.

Speaker Change: <unk>.

Speaker Change: Chapter.

Speaker Change: We've kind of built it to the point that that it is today that I think that we're excited to unlock a lot of shareholder value and continue on the journey. So I would say residential.

Speaker Change: Cycle right. So we're not saying that for a central maybe at some point in time, they may be at a similar injection, but it's not.

Speaker Change: Not today, we see significant opportunity for <unk>.

Speaker Change: It has its own.

Speaker Change: Prove it and because food processing.

Speaker Change: Timing and cycle life of where it is within within the middle of the portfolio.

Bryan McNamara: And so I think when you look at markets like in India, certainly parts of Europe, parts of Africa, that are still new up and coming markets for these chains, they have to get there. And I think they're looking to us more and more to drive down the U.N. economics of opening those restaurants, which I think we're coming through for them. So I think, yes, there's been a couple quarters where, you know, things have been kind of pushed out to the right. I think what gives us confidence is nobody, for the most part in those chains, has pulled their numbers down holistically for the year.

Speaker Change: It had been a very lumpy and cyclical business. We have been told by shareholders. Many years that it would that also had lower margins right. So.

Speaker Change: Understood last question for me.

Speaker Change: Just on your on your outlook in commercial foodservice, if I heard you correctly, we're starting a little bit slow maybe slightly negative organic growth.

Speaker Change: And we've got a built it to the point that that it is today that I think that we're excited to unlock a lot of shareholder value and continue on the journey. So I would say residential.

Implicitly things get much better in the back half to get to low single digit growth. So.

Speaker Change: I guess I'm curious do you expect to inflect positive from an organic growth in Q2 or is this.

Speaker Change: Has its own.

Speaker Change: Timing and cycle life of where it is within within the middle of the portfolio.

Speaker Change: All a second half story.

Speaker Change: Understood last question for me.

Bryan McNamara: So, again, things are always going to, you know, move from quarter to quarter, but really feel like they have held to their overall, you know, next 12 to 15 month, they'll be I just adding a couple of other things. I mean, I think some of the chains were surprised with traffic in the back half of the year. I mean, it was expected to grow. And that became a little bit more of a challenge, I think, as of late, or as we, you know, left the year, traffic patterns had started to improve some, and I think that gave, gives, you know, a little bit more confidence to the chains.

Speaker Change: What gives you the visibility that growth here can actually improve.

Speaker Change: Just on your on your outlook in commercial foodservice.

Speaker Change: Maybe you can comment in terms of what the headwinds have been.

Speaker Change: I heard you correctly, we're starting a little bit slow maybe slightly negative organic growth.

In recent years and what gets better thank you.

Speaker Change: Implicitly things get much better in the back half to get to low single digit growth. So.

Speaker Change: This is Bryan I'll start I'll call. It on the numbers side, a little bit and turn it over to Steve for some of the.

Speaker Change: I guess I'm curious do you expect to inflect positive from an organic growth in Q2 or is this.

Speaker Change: Market Com.

Speaker Change: Commentary.

Speaker Change: We do think do think things improved sequentially throughout the year in terms of I'll say doing some math. The one nuance. We have is we will compared to 25% to 24 is it Q2 24 was the high point, so I'm not going to.

Speaker Change: A second half story.

Speaker Change: What gives you the visibility that growth here can actually improve.

Bryan McNamara: Food cost was also, you know, another driver, and it's kind of a whole cycle, food cost being up, venue goes up, traffic goes down. I think, you know, the, and we did see inflation in food costs in the back half of the year, which I don't think a lot of our chain customers were were anticipating. So I think it was kind of a function of some of those dynamics and how that worked through their operation. I think going into this year, there's more stability in food costs, which then I think allows them to think about venue pricing, which then helps drive traffic and then traffic patterns improving.

Speaker Change: Maybe you can comment in terms of what the headwinds have been.

Speaker Change: In recent years and what gets better thank you.

Speaker Change: This is Bryan I'll start I'll call. It on the numbers side, a little bit and turn it over to Steve for some of the.

Speaker Change: Yet.

Speaker Change: Note specifically.

Speaker Change: Whether we will eclipse Q2 of 24% and 25, obviously the comps get a little bit.

Speaker Change: The market comp.

Speaker Change: Commentary.

Speaker Change: We do thinks do think things improved sequentially throughout the year in terms of I'll say doing some math. The one nuance. We have is we will compare to 25% to 24 is it Q2 24 was the high point, so I'm not going to.

Speaker Change: Easier in the back half of the year, having said that we're really looking at things over the perspective of the year and do expect generally improving conditions and hopefully deliver.

Delivering that.

Bryan McNamara: So I just think it's a little, you know, some of the issues that we saw in the third quarter started to kind of work their way through the cycle, which then allows the chains to be a little bit more confident on executing on their plans.

Speaker Change: Revenue.

Speaker Change: But Steve I'll give it to you for some market perspectives, yes. Thank you Brian Good morning, Mig I would call out maybe three specific areas megabit gives us confidence and really the year progressing in a positive direction, we talked a lot about new store openings with our bigger chain customers, which they have gone back to the last couple of years I think on.

Speaker Change: Yet you don't know specifically when.

Speaker Change: We will eclipse Q2 of 24 and 25, obviously the comps get a little bit.

Bryan McNamara: Great. Thanks for the call, guys. Appreciate it.

Speaker Change: Easier in the back half of the year, having said that we're really looking at things over the perspective of the year and do expect generally improving conditions and hopefully.

Tami Zakaria: The next question will come from Tami Zakaria with J.P. Morgan.

Speaker Change: Fortunately, we have seen in the last couple of quarters of those new store openings being pushed out for a number of different reasons.

Tami Zakaria: Please go ahead.

Tami Zakaria: Hi, good morning. Thank you so much. A question on the parts and services business. I saw in the presentation, the remain co has about 17% and the spin co would be about 33%. Do you have any targets in mind to increase the mix of parts and services over time for either of these businesses? Is that going to be a focus or strategy going forward or do you think this mix is pretty reasonable through the cycle? Yeah, no, that's a great question. I mean, I think we have Initiatives and expectations to increase and invest in service for both.

Speaker Change: Livery.

Speaker Change: Ranges from everything from weather to obviously, the fires out west no flooding et cetera has certainly impacted construction, it's been allocation of personnel to actually build build restaurants, and just some of the broad macro challenges, but the larger restaurant chains are facing I think the positive.

Speaker Change: Revenue I noted, but Steve I'll give it to you for some market perspectives, yes. Thank you Brian Good morning, Mig I would call out maybe three specific areas megabyte gives us confidence and really the year progressing in a positive direction, we talked a lot about new store openings with our bigger chain customers, which they have gone back to the.

Speaker Change: There is if we look at our collective group of top 10 customers and we compare their 25 built plans holistically for the entire year knowing stuff.

Speaker Change: A couple of years I think unfortunately, we have seen in the last couple of quarters of those new store openings being pushed out for a number of different reasons.

It does push and move from quarter to quarter for the 25 build plans are.

Speaker Change: Over 24, so I think we're pretty confident in our chain customers in their new store build plans for this year over <unk> four I think the other thing we're seeing with our chain customers is knowing that opening stores has been more challenging I do think youre seeing them add in sales layers to their existing footprints.

Timothy Fitzgerald: Food Processing, as well as RemainCo. One of the slides that we also put in the investor deck, a lot of the go-to-market initiatives that we have to drive organic growth, that includes service. I think we're very focused on how do we provide an enhanced and more efficient customer experience, kind of leveraging the scale of the platform, leveraging some of the new tools that we've got coming out. IoT is included in that as we start leveraging data for service. And those statements are true both for food processing as well as for commercial. So I think over time, our expectation is to increase the percentage of that piece of the pie for all the businesses, respectively.

Speaker Change: There is as if we look at our collective group of top 10 customers and we compare their 25 built plans holistically for the entire year knowing stuff.

Speaker Change: By capturing market share. So that's where we're seeing beverage really start to pick up that is going from being a concept to being actual reality in AG lands. So that's the view on chain I.

Speaker Change: Does push and move from quarter to quarter with a 25 build plans are.

Speaker Change: Over 24, so I think we're pretty confident in our chain customers and their new store build plans for this year over 24, I think the other thing we're seeing with our chain customers is knowing that opening stores has been more challenging I do think youre seeing them add in sales layers to their existing footprints to try.

Speaker Change: I would say just two more things when we look at more of a general market in the U S.

Speaker Change: <unk>, which is our association of reps here in the U S tracks every quarter, they're quoting and consultant activity. If you look at their progression from the fourth quarter to the first quarter already.

Speaker Change: See a very positive uptick in consulting and quoting activity to the general market, which aligns with what we're seeing from our our reps and our dealers. So I think youre seeing that pipeline more or less filled and the general market.

Speaker Change: Capturing market share. So that's where we're seeing beverage really start to pick up that is going from being a concept to being actual reality in Atlanta.

Speaker Change: The view unchanged I.

Tami Zakaria: Understood. That's very helpful.

Speaker Change: I would say just two more things when we look at more of a general market in the U S.

Tami Zakaria: So a quick follow-up to that is, would you be able to tell us what the mix was for these two businesses, call it in 2019? I'm just trying to understand how the mix has changed over time in the last five years.

Speaker Change: And I think the third thing I would call out if you picked up on the international markets that we talked about I think we're very positive on what we've seen in our European divisions, knowing that there are some challenges in that market, but we've seen.

Speaker Change: <unk> C, which is our association of reps here in the U S tracks every quarter, they're quoting and consultant activity. If you look at their progression from the fourth quarter to the first quarter already.

Speaker Change: More and more people through our innovation kitchen, and both Madrid and in the U K or opening a new innovation kitchen in Munich. This summer so see Germany as a big opportunity for us So really see Europe actually with a lot of momentum as we as we go into this year. So it's really the change now with the new stores its the quoting.

Bryan Mittelman: Yeah, Tami, this is Brian. I'd have to go back and see, I forget if we started breaking that out as early as this 19. My colleagues think maybe it was around 2021, we started publishing some, I'll say pie charts, you know, on that. I'll say, you know, residential has always had, you know, the lowest portion of its business in terms of parts, as you think about the three segments. I bet commercial has been probably fairly consistent in the high teens to 20-ish percent area. And then, you know, food processing is one that we've probably been doing, you know, has seen the most, you know, growth in it, as we've been really working to offer more, you know, services to our to our customers.

Speaker Change: Consultant activity and I think some of the international markets that gives us the confidence for the rest of this year and we did grow in Q4 internationally correct.

Speaker Change: Alright, thank you.

Speaker Change: The next question will come from Jeff Hammond with Keybanc capital markets. Please go ahead.

Jeff Hammond: Hey, good morning.

Speaker Change: Good morning, Jeff.

Speaker Change: Just last one I had on the spin can you just talk about what you think the leverage profiles of each of the businesses are going to be the leading more leverage on remain co and leave the balance sheet drive.

Speaker Change: Consultant activity and I think some of the international markets that gives us the confidence for the rest of this year, we did growing in Q4 internationally correct.

Bryan Mittelman: And with that comes parts. And also our customers have seen how their operations are being managed, as being evolving, you know, as we've been working through, I'll call it labor issues for the past, you know, couple of years, a lot of our large customers, I'll say, have lost some of their, you know, maintenance and service abilities on their own, and it's giving us nice opportunities to, to be providing that level of service to them. As Tim noted, you know, in commercial, working on certain things strategically, to be an even better and more aligned service provider, you know, with with different networks out there.

Speaker Change: Alright, thank you.

Speaker Change: For acquisitions or is it more balanced.

Speaker Change: The next question will come from Jeff Hammond with Keybanc capital markets. Please go ahead.

Speaker Change: Yes, so we're still a year out from executing the spin right. So I think.

Hey, good morning.

Speaker Change: Thanks will evolve during the course of the year, but on balance we would expect less leverage less leverage on the food processing business kind of given the M&A opportunities.

Speaker Change: Good morning, Jeff.

Speaker Change: Just last one I had on the spin can you just talk about what you think the leverage profiles of each of the businesses, we're going to be the leading more.

Speaker Change: Post spin.

Speaker Change: More leverage on remain co and leave the balance sheet dry form.

Speaker Change: Okay and then.

Speaker Change: In terms of adding Ed Garden to the board can you maybe just.

Tami Zakaria: Wonderful. Thank you.

Tami Zakaria: That's all I had.

Speaker Change: Acquisitions or is it more balanced.

Speaker Change: I didn't see the 8-K I don't know if its something I think you mentioned cooperation agreement maybe some of the key tenants in there and if there is any kind of.

Walt Liptak: The next question will come from Walt Liptak with Seaport.

Speaker Change: Yes, so we're still a year out from executing the spin right. So I think.

Walt Liptak: Please go ahead. Hi, thanks.

Speaker Change: Thanks will evolve during the course of the year, but on balance we would expect less leverage less leverage on the food processing business kind of given the M&A opportunities.

Speaker Change: Early feedback you've gotten from hammer, who is group.

Steven Spittle: Good morning. Yeah, I wanted to ask about, about, you know, your supply chain work. I think you've been doing procurement. and, you know, in supply chain. Operations or consolidations for a number of years now, and I wonder, I think I heard in the prepared remarks that there's going to be some benefits in 2025. I wonder if you could talk about if that's true. And if you guys are getting some benefits in 2025.

Speaker Change: What's kind of been built into this strategic plan. Thanks.

Yes, so maybe I'll just kind of start with the board refreshment overall, because thats been a process we've been going through for a couple of years, we had brought out.

Speaker Change: Post spin.

Speaker Change: Okay and then.

Speaker Change: Terms of adding Ed Garden to the board can you maybe just.

Speaker Change: Two new board members with Steve Scherger at DHS Shaw.

Speaker Change: I didn't see the 8-K I don't know if its I'll add something I think you mentioned cooperation agreement, maybe some of the key tenants in there and if theres any kind of.

Speaker Change: <unk>, which has been tremendous so.

Speaker Change: So we've been excited about that they've contributed.

Speaker Change: Early feedback you've gotten from hammer, who is group.

Speaker Change: Greatly to our board that process continued on.

Speaker Change: What's kind of been built into this strategic plan. Thanks.

Steven Spittle: Yeah, good morning, Walt, this is Steve. I'd call out a couple things from a supply chain standpoint. I think our team really over the last, you know, four or five years has done a phenomenal job, you know, first navigating all the supply chain disruption, certainly from a couple years ago. And then, you know, as we kind of move into this new chapter with, with the tariffs coming through, I think we are extremely well positioned to navigate that from a competitive landscape standpoint. I think from a pure cost savings perspective, I think it's a challenge that we put in front of every one of our divisions every year to be thoughtful and creative on how we can come up with supply chain savings.

Speaker Change: As we kind of move through the back half of last year.

Speaker Change: Yes, so maybe I'll just kind of start with the board refreshment overall, because thats been a process we've been going through for a couple of years, we had brought out.

Speaker Change: I think our.

Speaker Change: The.

Speaker Change: We had a robust.

Speaker Change: Two new board members with Steve Scherger at DHS Shaw.

Speaker Change: So we're going through and thinking about the capabilities that we wanted to have to expand the board and again bring a fresh perspective so.

Speaker Change: Which has been tremendous so.

Speaker Change: So we've been excited about that they've contributed.

Speaker Change: So we were kind of in late later stages of bringing on two new members alongside.

Speaker Change: Greatly to our board that process continued on.

Speaker Change: As we got to move through the back half of last year.

Speaker Change: Jack builders announced retirement, who had been.

Speaker Change: I think our.

Speaker Change: Tremendous board ever over many years.

Speaker Change: The.

Steven Spittle: And then you layer in the Middleby supply chain team on top of that, to leverage our brands together, to leverage the network together, to come up with savings. So we do feel like there are savings that will come through this year from a supply chain standpoint. So I think that positions us uniquely. It's a great competitive advantage, I think, as we come into this year, both from a savings standpoint, but really from a competitive, you know, selling perspective as well.

Speaker Change: We had a robust.

Speaker Change: So.

Speaker Change: It kind of came into the fold we've had.

Speaker Change: So we're going through and thinking about the capabilities that we wanted to have to expand the board and again bring out fresh perspective. So.

Speaker Change: Very constructive.

Speaker Change: Conversations sharing of perspective.

Speaker Change: So truly we are very excited to have.

Speaker Change: So we were kind of in late later stages of bringing on.

Speaker Change: Joined the board I think.

Speaker Change: Two new members alongside.

Speaker Change: To add a lot of.

Speaker Change: Financial.

Speaker Change: Jack builders announced retirement, who had been.

Speaker Change: Investor operational.

Speaker Change: Read this board ever over many years.

Expertise in sight.

Speaker Change: Our capabilities, so that just kind of aligned.

Speaker Change: And so.

Speaker Change: It kind of came into the fold we've had.

Speaker Change: There is a cooperation agreement that's out there on an 8-K, but its got I'll say kind of standard.

Speaker Change: Very constructive.

Speaker Change: Conversations sharing of perspective.

Speaker Change: Standstill confidentiality confidentiality.

Speaker Change: So truly we are very excited to have.

Speaker Change: Provisions in it.

Speaker Change: Joined the board, but I think he's going to.

Speaker Change: A lot of.

Speaker Change: Financial.

Speaker Change: Okay. Thanks.

Speaker Change: Investor operational.

The next question will come from Brian Mcnamara with Canaccord Genuity. Please go ahead.

Speaker Change: Expertise at site.

Speaker Change: Our capabilities, so that just kind of aligned.

Brian McNamara: Good morning, guys. Thanks for taking the questions.

Speaker Change: There is a cooperation agreement that's out there, but it's got I'll say kind of standard.

Brian McNamara: I know you mentioned you regularly review of the portfolio, but when was the official strategic review launch did that date back to the JV team morale transaction last April.

Speaker Change: Standstill confidentiality confidentiality.

Speaker Change: Provisions in it.

Brian McNamara: And is holding on to their residential business at this point just a function of nursing that business back to health before you contemplate a separation or sale.

Steven Spittle: Okay, great. Maybe just as a follow up with the food process or food processing, you know, are there or have there been supply chain cost savings between the other two segments, between commercial food service and residential, or are those supply chain benefits unique to each of the segments? There, so we've got one supply chain team that facilitates across all three of the businesses, and there's kind of unique, I'll say synergies, you know, depending on product by product, brand by brand. The, the food processing is inherently different in terms of the products, obviously, size of the products and some of the components that go go into it.

Speaker Change: Okay. Thanks.

Speaker Change: The next question will come from Brian Mcnamara with Canaccord Genuity. Please go ahead.

Brian McNamara: So again, we're continuously have been reviewing the portfolio. So that was not only last year that was the year before.

Brian McNamara: Good morning, guys. Thanks for taking the questions.

Brian McNamara: I know you mentioned you regularly review of the portfolio, but when was the official strategic review launch did that date back to the JV key morale transaction last April.

Brian McNamara: That is something that our board does does regularly.

Brian McNamara: I think with these things they are all I mean, certainly we were looking at many different options as we entered the year last year that I think as we started evolving what we thought might be the most strategic option.

Brian McNamara: And is holding on to their residential business at this point just a function of nursing that business back to health before you contemplate a separation or sale.

Brian McNamara: To unlock shareholder value for the long term.

Brian McNamara: So again, we're continuously have been reviewing the portfolio. So that was not only last year that was the year before.

Brian McNamara: That was probably mid year, when we made that kind of more of a official comprehensive review offering.

Brian McNamara: That is something that our board does does regularly.

Brian McNamara: <unk> been.

Steven Spittle: So there, there's probably a bit less synergies there with the food processing than there is with commercial and residential, which you've got great similarity, you know, frankly, in the process and has very much overlapping and shared supply chain.

Brian McNamara: I think with these things they evolve I mean, certainly we were looking at many different options as we entered the year last year that I think as we started evolving.

Brian McNamara: And that regard.

Brian McNamara: Look the.

Brian McNamara: The residential business.

Brian McNamara: Yes.

Speaker Change: I would not frame it the way you did I mean, I think again.

Brian McNamara: What we thought might be the most strategic option.

Speaker Change: He is a tough period for residential there is no question about it we're housing existing.

Brian McNamara: To unlock shareholder value for the long term.

Brian McNamara: That was probably mid year, when we made that kind of more of a official comprehensive review.

Speaker Change: Existing home sales Remodels are it's disrupted operationally even by try to to execute in the marketplace, because getting contractors electricians et cetera, I mean, I think that's been pressure on longer lead time.

Steven Spittle: Okay, great. All right. Thank you.

Unknown Executive: This concludes our question and answer session.

Timothy Fitzgerald: I would like to turn the conference back over to Mr. Tim FitzGerald for any closing remarks. Please go ahead, sir. Thank you, everybody, for joining us today on the call. Obviously, we're excited about all the announcements that we've made and looking forward to the future of Middleby and the food processing spin. And we think this is going to create meaningful value to all of our shareholders. And looking forward to updating everybody on those activities as we kind of move through the next several quarters.

Brian McNamara: <unk>.

Brian McNamara: Advisors that.

Brian McNamara: And that regard.

Brian McNamara: Look the.

Brian McNamara: The residential business.

Brian McNamara: Sure.

Speaker Change: Products into houses.

Speaker Change: I would not frame it the way you did I mean, I think we again.

Speaker Change: Market and one year dealing kind of with the premium sector, we get hit.

Speaker Change: A bit hard first so it takes a little bit longer to start the engines, but when it comes back it's going to come back strong so.

Speaker Change: He is a tough period for residential there is no question about it.

Speaker Change: Housing existing.

Speaker Change: Existing home sales Remodels are it's disrupted operationally even by try to to execute in the marketplace, because getting contractors electricians et cetera, I mean I think.

Speaker Change: We're confident of that so.

Speaker Change: As an exciting platform that I think when it is not and I won't call. It a cycle I would call. It a disrupted period kind of coming out of Covid. That's just got at that normal.

Speaker Change: That's been pressure on longer lead time.

Speaker Change: Macro up and down.

Timothy Fitzgerald: Hopefully we'll see some of you at NAFEM, as James mentioned, we've got an exciting trade show with our latest and greatest products, and otherwise we will talk to you next quarter.

Speaker Change: Products into houses.

Market and one year dealing kind of with the premium sector, we get hit.

Speaker Change: Significant disruption.

Speaker Change: So we think.

Speaker Change: A bit hard first so it takes a little bit longer to start the edges, but when it comes back it's going to come back strong so.

Speaker Change: In better days that this is a very this is a.

Speaker Change: Best in class highest margin.

Unknown Executive: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: We're confident of that so it is an exciting platform that I think when it is not and I won't call. It a cycle I would call. It a disrupted period kind of coming out of Covid. That's just got back to normal.

Speaker Change: Very unique portfolio of premium brands.

Speaker Change: With nothing else like it and we think Theres a lot of shareholder value there.

Speaker Change: That being said.

Speaker Change: We always will continue to review the portfolio.

Speaker Change: Macro up and down.

Speaker Change: What is the best opportunities for each of the businesses.

Speaker Change: Difficult disruption.

Speaker Change: So we think.

Speaker Change: For the long term and to create shareholder value.

Speaker Change: And better days that this is a very this is a.

Speaker Change: But.

Speaker Change: We think that.

Speaker Change: Best in class highest margin.

Speaker Change: The residential business again projects, probably some of the higher growth.

Speaker Change: Very unique portfolio of premium brands.

Speaker Change: Higher margin expansion opportunities as we go through the next several years kind of flipping it from where we are to where we think we will be.

Speaker Change: Nothing else like it and we think theres a lot of shareholder value there.

Speaker Change: That being said.

Speaker Change: We always will continue to review the portfolio.

Speaker Change: Great. That's helpful. Secondly on commercial foodservice can you talk about your price and volume expectations for 2025 and compare that to recent years, our volumes expected to be negative.

Speaker Change: What is the best opportunities for each of the businesses.

Speaker Change: For the long term and to create shareholder value.

Speaker Change: <unk>.

Speaker Change: We think that.

Speaker Change: No I think the pricing.

Speaker Change: The residential business again projects, probably some of the higher growth.

Speaker Change: Benefits for 25 or are modest.

Speaker Change: Higher margin expansion opportunities as we go through the next several years kind of flipping it from where we are to where we think we will be.

Speaker Change: At best we haven't maybe have the same level of pricing actions to start this year that we have in prior years as you look at what's kind of cumulatively.

Speaker Change: Happened over the past eight.

Speaker Change: Four years or so so I think we are in a in a year here, where it will be more volume driven.

Speaker Change: No I think the pricing.

Speaker Change: And then price driven.

Speaker Change: Benefits for 25 or are modest.

Speaker Change: Great and then finally I guess for just your restaurant customers. How would you characterize the current operating environment you have big players really leaning into value for limited time offers going from one month to one year.

Speaker Change: At best we haven't maybe have the same level of pricing actions to start this year that we have in prior years as you look at what's kind of cumulatively.

Speaker Change: You said, you're confident in your stores opening plans to restore customers opening plans. This year I guess what drives that.

Speaker Change: What happened over the past, let's say.

Speaker Change: Four years or so so I think we are in a in a year here, where it will be more volume driven.

Speaker Change: Confidence kind of given the mid year surprise in 2024. Thank you.

Speaker Change: Then than price driven.

Speaker Change: Yes, it's a great question I think yes, there has been this push towards value that I think has probably been more in the traditional fast food <unk> segment, I think what youre seeing though is I think youre seeing some of the more fast casual casual dining concepts really start to thrive.

And you're confident in your stores opening plans to restore customers opening plans. This year I guess what drives that.

Speaker Change: So many of them a lot of credit for thinking creatively about adopting new operational initiatives, new technology initiatives to help with throughput to help drive labor costs down to help drive food costs down I think youre seeing those actually thrive in this scenario. So it's a little bit of a nuance that yes, there are challenges around value.

<unk> kind of given the mid year surprise in 2024. Thank you.

Speaker Change: Yes, it's a great question I think yes, there has been this push towards value that I think has probably been more in the.

Traditional fast food <unk> segment, I think what Youre seeing though is I think youre seeing some of the more fast casual casual dining concepts really start to thrive.

Speaker Change: But youre also seeing again, those let's say more forward thinking chains again really adopt the new technologies and try to drive their cost overall down to give a better product experience to consumers. So I think that's very positive I think in terms of what gives us confidence.

Speaker Change: And then a lot of credit for thinking creatively about adopting new operational initiatives, new technology initiatives to help with throughput to help drive labor costs down to help drive food costs down and I think youre seeing those actually thrive in this scenario.

Speaker Change: As you know.

Speaker Change: All the chains.

Speaker Change: We are very open with their new store plans.

Speaker Change: I do believe that if you look at.

So it's a little bit of a nuance that yes, there are challenges around value, but you're also seeing again, those let's say more forward thinking chains again really adopt new technologies and try to drive their cost.

Speaker Change: There are so many new markets that theyre entering and especially from an international standpoint, and so I think when you look at markets like in India, certainly parts of Europe parts of Africa are still.

Speaker Change: Cost overall down to give a better product experience to consumers. So I think that's very positive.

Speaker Change: Still new up and coming markets for these chains.

Speaker Change: They have to get there.

Speaker Change: In terms of what gives us confidence is.

Speaker Change: They are looking to us more and more to drive down the unit economics of opening those restaurants, which I think were coming through for them. So I think yes, theres been a couple of quarters, where things have been kind of pushed out to the right I think what gives us confidence is nobody for the most part of those teams has pulled their numbers down holistically for the year. So again.

Speaker Change: All the chains are very open with their new store plans and I do believe that if you look at there's.

Speaker Change: There are so many new markets that they are entering and especially from an international standpoint, and so I think when you look at markets like in India, certainly parts of Europe parts of Africa that are still new up and coming markets for these chains.

Speaker Change: Things are always going to move from quarter to quarter, but really feel like they have helped to their overall.

Speaker Change: Next 12 months to 15 months built plant.

Speaker Change: They have to get there I think they are looking to us more and more to drive down the unit economics of opening those restaurants, which I think were coming through forum.

Speaker Change: I just.

Speaker Change: Adding a couple of other things I mean, I think some of the changes we're surprised.

Speaker Change: With traffic in the back half of the year I mean, it was expected to grow.

Speaker Change: Yes, theres been a couple of quarters, where things have been kind of pushed out to the right I think what gives us confidence is nobody for the most part of those teams has pulled their numbers down holistically for the year. So again things are always going to move from quarter to quarter, but really feel like they have helped to their overall.

Speaker Change: But that became a little bit more of a challenge I think as of.

Speaker Change: Late or as we left the year traffic patterns thats starting to improve so I mean, I think that gave.

Speaker Change: Little bit more.

Speaker Change: With confidence to the chains food cost was also.

Speaker Change: Yes next 12 to 15 month build plan.

Speaker Change: Another driver and it's kind of a whole cycle food costs being up and <unk> goes up traffic goes down.

Speaker Change: I'll just.

Speaker Change: Adding a couple of things I mean, I think some of the changes we're surprised.

Speaker Change: Thank you.

Speaker Change: And we did see inflation in food costs.

Speaker Change: With traffic in the back half of the year I mean, it was expected to grow.

Speaker Change: In the back half of the year, which I don't think a lot of our chain customers.

Speaker Change: But that became a little bit more of a challenge I think as of <unk>.

Speaker Change: We're anticipating so I think it was kind of a function of some of those dynamics.

Speaker Change: Late or as we left the year traffic patterns had started to improve so I think that gave a little bit more.

Speaker Change: How that works through their operation I think going into this year there is more stability.

Speaker Change: And food costs, which I think allows them to think about menu pricing, which then helps drive traffic and traffic patterns, improving so I just think it's equal.

Speaker Change: With confidence to the chains food cost was also.

Speaker Change: Another driver and it's kind of a whole cycle food cost paid up and you goes up traffic goes down.

Speaker Change: Yes.

Speaker Change: Some of the issues that we saw in the third quarter is starting to kind of work their way through.

Speaker Change: And we did see inflation in food costs.

Speaker Change: In the back half of the year, which I don't think a lot of our chain customers.

Speaker Change: The cycle, which that allows us that change to be a little bit more confident.

Speaker Change: We're anticipating so I think it was kind of a function of some of those dynamics.

Speaker Change: <unk> other plants.

Speaker Change: But how that works through their operation I think going into this year there is more stability at.

Speaker Change: Great. Thanks for the color guys I appreciate it.

Tami Zakaria: The next question will come from Tami Zakaria with Jpmorgan. Please go ahead.

Speaker Change: At food costs, which I think allows them to think about menu pricing, which then helps drive traffic and that traffic patterns are improving so I just think it's Steve.

Tami Zakaria: Hi, good morning, Thank you so much.

Tami Zakaria: A question on the parts and services business is the presentation.

Speaker Change: Some of the issues that we saw in the third quarter of starting to kind of work their way through.

Tami Zakaria: <unk> has about 17% and discipline call would be about 33.

Speaker Change: The cycle, which that allows the change to be a little bit more confidence on executing other plants.

Speaker Change: Do you have any targets in mind to increase the.

Tami Zakaria: Mix of parts and services over time.

Speaker Change: Great. Thanks for the color guys I appreciate it.

Speaker Change: Either of these businesses.

Speaker Change: The next question will come from Tami Zakaria with Jpmorgan. Please go ahead.

Speaker Change: Is that going to be a focus of our strategy going forward or do you think this mix is pretty resemble to the cycle.

Tami Zakaria: Hi, good morning, Thank you so much.

Tami Zakaria: On the parts and services business is the presentation.

Speaker Change: Yes, no that's a great question.

Speaker Change: I think we have.

Speaker Change: Initiatives at expectations too.

Speaker Change: <unk> has about 17% and the spin call would be about 33% do you have any targets in mind to increase the mix of parts and services over time for either of these businesses.

Increase that invest in service for both.

Speaker Change: Food processing as well as remain co.

Speaker Change: Slides that we also put in the investor deck.

Speaker Change: Is that going to be a focus of our strategy going forward or do you think this mix is pretty resemble to the cycle.

Speaker Change: The go to market initiatives that we have to drive organic growth that includes service I think we're very focused on.

Speaker Change: Yes, no that's a great question.

Speaker Change: How do we provide.

Speaker Change: I think we.

Speaker Change: Half.

Speaker Change: Enhanced.

Speaker Change: Initiatives at expectations too.

Speaker Change: And more efficient.

Speaker Change: Customer experience.

Speaker Change: Increase and invest in service for both.

Speaker Change: Leveraging the scale of the platform leveraging some of the new tools that we've got coming out Iot.

Speaker Change: Food processing as well as remain co.

Speaker Change: Included in that as we start leveraging data for service.

Speaker Change: Slides that we also put in the investor deck.

Speaker Change: Lot of the go to market initiatives that we have to drive organic growth that includes service I think we're very focused on.

Speaker Change: Those statements are true both for food processing as well as for commercial so I mean, I think overtime.

Speaker Change: Our expectation is to increase the <unk>.

Speaker Change: How do we provide.

Speaker Change: Percentage of that piece of the pie for all the businesses respectively.

Speaker Change: Enhanced.

Speaker Change: More efficient.

Speaker Change: Customer experience.

Speaker Change: Understood. That's very helpful. A quick follow up to that is.

Speaker Change: Leveraging the scale of the platform leveraging some of the new tools that we've got coming out Iot include.

Speaker Change: Would you be able to tell us what the mix was for these two.

Included in that as we start leveraging data for service.

Speaker Change: Business is call. It in 2019, I'm just trying to understand how the mix has changed over time in the last five years.

Speaker Change: Those statements are true both for food processing as well as for commercial so I mean, I think overtime.

Speaker Change: Our expectation is to increase the <unk>.

Speaker Change: Yes, Jamie this is Bryan I'd have to go back and see I forget if we started breaking that out as early as this 19.

Speaker Change: Percentage of that piece of the pie for all the businesses respectively.

Speaker Change: Understood. That's very helpful. A quick follow up to that is.

Speaker Change: My colleagues think maybe it was around 2021, we started publishing some I'll say pie charts.

Speaker Change: Would you be able to tell us what the mix was for these two.

Speaker Change: On that I'll say residential has always had the lowest portion of its business in terms of parts as you think about the three segments.

Speaker Change: Okay.

Speaker Change: This is call. It in 2019, I'm just trying to understand how the mix has changed over time in the last five years.

Speaker Change: Commercial has been probably fairly consistent in the high teens to 20 ish.

Speaker Change: Yes, Jamie this is Bryan I'd have to go back and see I forget if we started breaking that out as early as this 19.

Speaker Change: Sent.

Speaker Change: Area.

Speaker Change: Certainly the last five years, and then food processing is one that we've probably been doing.

Speaker Change: My colleagues think maybe it was around 2021, we started publishing some I'll say pie charts.

Speaker Change: <unk> has seen the most.

Speaker Change: Growth in it as we've been.

Speaker Change: Really working to offer more services to our to our customers and with that comes parts and also our customers have seen how their operations have being manage has been evolving as we have been working through I'll call. It labor issues for the past couple of years, a lot of our large customers sample.

Speaker Change: On that I'll say residential has always had the lowest portion of its business in terms of parts as you think about the three segments.

Speaker Change: Commercial has been probably fairly consistent in the high teens to 20 ish.

Speaker Change: <unk>.

Speaker Change: Area.

Speaker Change: Some of their maintenance and service abilities on their own and it's giving us nice opportunities too.

Speaker Change: Certainly the last five years, and then food processing is one that we've probably been doing.

Speaker Change: It has seen the most.

Speaker Change: To be providing that level of service to them as Tim noted and commercial working on certain things strategically to be an even better and more aligned service provider.

Speaker Change: Growth in it as we've been really working to offer more services to our to our customers and with that comes parts and also our customers have seen how their operations have been managed as being evolving as we've been working through I'll call. It labor issues for the past couple of years a lot of.

Speaker Change: With it with different networks out there.

Speaker Change: Wonderful. Thank you that's all I have.

Speaker Change: Great.

Speaker Change: Large customers sample off some of their maintenance and service abilities on their own is giving us nice opportunities too.

Speaker Change: The next question will come from Walter Liptak with Seaport. Please go ahead.

Walter Liptak: Hi, Thanks, good morning.

Speaker Change: To be providing that level of service to them as Tim noted and commercial working on certain things strategically to be an even better and more aligned service provider.

Speaker Change: Wanted to ask about.

Speaker Change: About <unk>.

Speaker Change: Supply chain work I think <unk> been doing procurement.

Speaker Change:

Speaker Change: And.

Speaker Change: And supply chain.

Speaker Change: With it with different networks out there.

Speaker Change: Operations are consolidations for a number of years now and I Wonder I think I heard in the prepared remarks, there's going to be some benefits in 2025 I Wonder if you could talk about if that is true and if you are.

Speaker Change: Wonderful. Thank you that's all I have.

Speaker Change: Great.

Speaker Change: The next question will come from Walter Liptak with Seaport. Please go ahead.

Speaker Change: Are getting some benefits in 2025.

Walter Liptak: Alright, thanks, good morning.

Speaker Change: I wanted to ask about.

Walt: Yes, good morning, Walt with Steve I'd call out a couple of things from a supply chain standpoint, I think our team really over the last four or five years has done a phenomenal job.

Speaker Change: About your supply chain work I think you've been doing procurement.

Speaker Change:

Speaker Change: And.

Speaker Change: And supply chain.

Walt: First navigating all of the supply chain disruption certainly from a couple of years ago, and then as we kind of move into this new chapter with with the tariffs coming through I think we are extremely well positioned to navigate that from a competitive landscape standpoint, I think from a pure cost savings.

Speaker Change: Yes, good morning, Walt with Steve I'll call out a couple of things from a supply chain standpoint, I think our team really over the last four or five years has done a phenomenal job.

Walt: Active I think it is a challenge that we put in.

Walt: Every one of our divisions every year to be thoughtful and creative on how we can come up with supply chain savings and then you layer in the middle be supply chain team on top of that to leverage our brands together to leverage the network together to come up with a savings. So we do feel like there are savings that will come through this year from a supply chain standpoint.

Speaker Change: First navigating all of the supply chain disruption certainly from a couple of years ago, and then as we kind of move into this new chapter with with the tariffs coming through I think we are extremely well positioned to navigate that from a competitive landscape standpoint, I think from a pure cost savings.

Walt: I also really want to call out.

Walt: I think that we are extremely well positioned to navigate.

Active I think it is a challenge that we put in front of every one of our divisions every year to be thoughtful and creative on how we can come up with supply chain savings and then you layer in the middle be supply chain team on top of that to leverage our brands together to leverage the network together.

Walt: Tariffs have been focused so much obviously being predominantly domestic manufacturer across really all three of our segments. Our team has done a great job over the last couple of years really I'll call it near shoring.

Walt: Our supply chain and manufacturing in many ways.

Speaker Change: To come up with a savings. So we do feel like there are savings that will come through this year from a supply chain standpoint, but also really want to call out.

Walt: I think we've been very focused on diversifying our qualified supplier.

Walt: Roster, if you will to make sure that we have domestic suppliers. If we had an international supplier in some aspects so and I think fundamentally we're all.

Speaker Change: I think that we are extremely well positioned to navigate.

Speaker Change: Tariffs have been focused so much obviously being predominantly a domestic manufacturer across really all three of our segments. Our team has done a great job over the last couple of years really I'll call it near shoring.

Walt: Always leveraging the Middleby global supply chain network, having a 120 brands across the globe and leveraging that to really build up a more resilient supply chain. So I think that positions us uniquely it's a great competitive advantage I think as.

Speaker Change: Our supply chain and manufacturing in many ways.

Speaker Change: I think we've been very focused on diversifying our qualified supplier.

Walt: We come into this year, both from a savings standpoint, but really from a.

Speaker Change: Roster, if you will to make sure that we have domestic suppliers. If we had an international supplier in some aspects so and I think fundamentally we're always leveraging the middleby global supply chain network, having a 120 brands across the globe and leveraging that to really build up a more of a <unk>.

Walt: Competitive selling perspective as well.

Walt: Okay great.

Walt: Follow up.

Walt: With the food processing food processing.

Walt: Sure.

Walt: Or have there been supply chain.

Walt: Cost savings between the other two segments between commercial foodservice and residential are they.

Speaker Change: Supply chain, so I think that positions us uniquely it's a great competitive advantage I think as we come into this year, both from a savings standpoint, but really from a.

Walt: Or are those supply chain benefits.

Walt: Unique to each of the segments.

Speaker Change: Compared to selling perspective as well.

Walt: There.

Walt: So we've got one supply chain team that facilitates across all three of the businesses has got a unique I'll say synergies depending on product by product brand by brand.

Speaker Change: Okay great.

Speaker Change: Follow up.

Speaker Change: With the food processing food processing.

Speaker Change: Sure.

Speaker Change: Or have there been supply chain.

Walt: The.

Speaker Change: Cost savings between the other two segments between commercial foodservice and residential are they.

Walt: Food processing is inherently different in terms of the products that obviously size of.

Speaker Change: Or are those supply chain benefits.

Walt: The products and some of the components that go go into it so there.

Speaker Change: Unique to each of the segments.

Walt: There is probably a bit less.

Speaker Change: They are.

Walt: Synergies there with the foot pricing than there is with commercial and residential which you've got.

Speaker Change: So we've got one supply chain team that facilitates across all three of the businesses has got a unique I'll say synergies depending on product by product brand by brand.

Walt: Great similarity frankly in the process.

Walt: Very much overlapping and shared supply chain.

Speaker Change: The.

Walt: Okay, Great alright, thank you.

Speaker Change: Food processing is inherently different in terms of the products that obviously size of.

Walt: This concludes our question and answer session I would like to turn the conference back over to Mr. Tim Fitzgerald for any closing remarks. Please go ahead Sir.

Speaker Change: The products and some of the components that go go into it so there.

Speaker Change: There is probably a bit less.

Speaker Change: Synergies there with the food pricing than there is with commercial and residential which you've got.

Yes, no. Thank you.

Body for joining us today.

Speaker Change: On the call obviously, we're excited about all the <unk>.

Speaker Change: Great similarity frankly in the process. It is very much an overlapping sure supply chain.

Walt: Spits that we've made and looking forward.

Speaker Change: To the future.

Walt: It'll be the food processing spend.

Speaker Change: Okay, Great alright, thank you.

I think thats going to create meaningful.

Speaker Change: This.

Speaker Change: <unk> our question and answer session I would like to turn the conference back over to Mr. Tim Fitzgerald for any closing remarks. Please go ahead Sir.

Speaker Change: Value to all of our shareholders.

Speaker Change: Looking forward to updating everybody on those activities, we've got to move through the next several quarters.

Speaker Change: Yes, no. Thank you everybody for joining us today.

Speaker Change: Hopefully we will see some of you at <unk>.

Speaker Change: But as James mentioned, we've got an exciting trade show.

Speaker Change: On the call obviously, we're excited about all the <unk>.

Speaker Change: With our latest and greatest products.

Spits that we've made and looking forward.

And otherwise we will talk to you next quarter.

Speaker Change: To the future.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker Change: It'll be the food processing spend.

Speaker Change: We think that's going to create meaningful value.

Speaker Change: <unk> to all of our shareholders.

Speaker Change: Looking forward to updating everybody on those activities, we've got to move through the next several quarters.

Speaker Change: Hopefully we will see some of you at <unk>.

Speaker Change: But as James mentioned, we've got an exciting trade show with our latest and greatest products.

Speaker Change: And otherwise we will talk to you next quarter.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

[music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Q4 2024 The Middleby Corp Earnings Call

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