1400 Toastmaster Drive Elgin, Illinois 60120 www.middleby.com ANNUAL REPORT www.middlebyresidential.com www.middprocessing.com 2018 2018 FINANCIAL HIGHLIGHTS CORPORATE INFORMATION (dollars in thousands) BOARD OF DIRECTORS EXECUTIVE OFFICERS INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS Gordon O’Brien 2, 4 Timothy J. FitzGerald 2018 2017 2016 2015 2014 Chairman of the Board Chief Executive Officer Ernst & Young LLP Managing Partner Chicago, Illinois David Brewer NET SALES $2,722,931 $2,335,542 $2,267,852 $1,826,598 $1,636,538 Cannon Capital Executive Vice President STOCK MARKET INFORMATION Sarah Palisi Chapin 5, 4, 6 & Chief Operating Officer GROSS PROFIT $1,004,140 $912,741 $901,180 $706,505 $640,585 Principal The Middleby Corporation is traded on Chapin Creative Bryan Mittelman The NASDAQ Stock Market LLC under the Chief Financial Officer INCOME FROM OPERATIONS $445,966 $378,613 $419,018 $299,385 $300,519 symbol “MIDD.” Timothy J. FitzGerald Chief Executive Officer Martin Lindsay Corporate Treasurer INVESTOR RELATIONS NET EARNINGS $317,152 $298,128 $284,216 $191,610 $193,312 The Middleby Corporation For additional information: 2 TRANSFER AGENT EPS ON NET EARNINGS $5.70 $5.26 $4.98 $3.36 $3.40 Robert Lamb, Ph.D. The Middleby Corporation Professor AND REGISTRAR 1400 Toastmaster Drive, NYU Graduate School of Business Elgin, IL 60120 55,604,000 56,719,000 57,085,000 56,973,000 56,784,000 Computershare Trust Company, N.A. WEIGHTED AVERAGE SHARES [email protected] Cathy L. McCarthy 1, 2, 6 250 Royall Street 847 741 3300 Chief Executive Officer Canton, MA 02021 CASHFLOW FROM OPERATIONS $368,914 $304,455 $294,110 $249,592 $233,882 or visit www.middleby.com CrossTack, Inc. CORPORATE HEADQUARTERS 3, 4, 6 TOTAL ASSETS $4,549,781 $3,339,713 $2,917,136 $2,761,151 $2,066,131 John R. Miller III 1 Chair of Audit Committee Former President The Middleby Corporation 1400 Toastmaster Drive 2 Audit Committee Member $1,892,105 $1,028,881 $732,126 $766,061 $598,167 E.O.P., Inc. TOTAL DEBT Elgin, Illinois 60120 3 Chair of Compensation Committee Nassem Ziyad 2 847 741 3300 4 Compensation Committee Member STOCKHOLDERS´ EQUITY $1,665,203 $1,361,148 $1,265,318 $1,166,830 $1,006,760 Chief Operating Officer FAX 847 741 0015 5 Chair of Nominating and Governance Ziyad Brothers Importing 6 Nominating Committee Member STOCK PRICE PERFORMANCE $3,000 $350 $6 2018 200 2,800 2018 2018 150 Middleby 2017 2017 NASDAQ Composite Index 2,600 300 100 2016 NASDAQ 100 index 2016 5 2,400 2017 50 2016 2,200 250 0 2013 2014 2015 2016 2017 2018 2,000 4 2015 COMMERCIAL FOODSERVICE EQUIPMENT 1,800 2014 2015 200 2014 2015 2014 1,600 3 1,400 150 1,200 1,000 2 100 800 FOOD PROCESSING EQUIPMENT 600 1 50 400 200 RESIDENTIAL KITCHEN EQUIPMENT 0 0 0 NET SALES NET EARNINGS EPS ON NET EARNINGS (dollars in millions) (dollars in millions) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the Fiscal Year Ended December 29, 2018 or Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Commission File No. 1-9973 THE MIDDLEBY CORPORATION (Exact name of Registrant as specified in its charter) Delaware 36-3352497 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification Number) 1400 Toastmaster Drive, Elgin, Illinois 60120 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: 847-741-3300 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common stock, par value $0.01 per share The NASDAQ Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “accelerated filer, large accelerated filer, smaller reporting company, and emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No The aggregate market value of the voting stock held by nonaffiliates of the Registrant as of June 30, 2018 was approximately $5,702,423,085. The number of shares outstanding of the Registrant’s class of common stock, as of February 25, 2019, was 55,703,466 shares. Documents Incorporated by Reference Part III of Form 10-K incorporates by reference the Registrant’s definitive proxy statement to be filed pursuant to Regulation 14A in connection with the 2019 annual meeting of stockholders. THE MIDDLEBY CORPORATION DECEMBER 29, 2018 FORM 10-K ANNUAL REPORT TABLE OF CONTENTS Page PART I Item 1. Business 1 Item 1A. Risk Factors 10 Item 1B. Unresolved Staff Comments 19 Item 2. Properties 20 Item 3. Legal Proceedings 21 Item 4. Mine Safety Issues 21 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22 Item 6. Selected Financial Data 23 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 24 Item 7A. Quantitative and Qualitative Disclosure about Market Risk 39 Item 8. Financial Statements and Supplementary Data 41 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 99 Item 9A. Controls and Procedures 99 Item 9B. Other Information 101 PART III Item 10. Directors, Executive Officers and Corporate Governance 102 Item 11. Executive Compensation 102 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 102 Item 13. Certain Relationships and Related Transactions, and Director Independence 102 Item 14. Principal Accountant Fees and Services 102 PART IV Item 15. Exhibits and Financial Statement Schedule 103 Item 16. Form 10-K Summary 104 PART I Item 1. Business General The Middleby Corporation, a Delaware corporation (“Middleby” or the “company”), through its operating subsidiary Middleby Marshall Inc., a Delaware corporation (“Middleby Marshall”) and its subsidiaries, is a leader in the design, manufacture, marketing, distribution, and service of a broad line of (i) foodservice equipment used in all types of commercial restaurants and institutional kitchens, (ii) food preparation, cooking, baking, chilling and packaging equipment for food processing operations, and (iii) premium kitchen equipment including ranges, ovens, refrigerators, ventilation and dishwashers primarily used in the residential market. Founded in 1888 as a manufacturer of baking ovens, Middleby Marshall Oven Company was acquired in 1983 by TMC Industries Ltd., a publicly traded company that changed its name in 1985 to The Middleby Corporation. The company has established itself as a leading provider of (i) commercial restaurant equipment, (ii) food processing equipment and (iii) residential kitchen equipment as a result of its acquisition of industry leading brands and through the introduction of innovative products within each of these segments. The company's annual reports on Form 10-K, including this Form 10-K, as well as the company's quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports are available, free of charge, on the company's internet website, www.middleby.com. These reports are available as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”). Business Segments and Products The company conducts its business through three principal business segments: the Commercial Foodservice Equipment Group, the Food Processing Equipment Group and the Residential Kitchen Equipment Group. See Note 10 to the Consolidated Financial Statements for further information on the company's business segments.