AGM 2021

May 10, 2021

Good morning, and welcome to the Middleby Corporation twenty twenty one Annual Meeting of Stockholders. I would like to introduce the first presenter, Timothy Fitzgerald, Chief Executive Officer of the Middleby Corporation. Thank you. I am Tim Fitzgerald, Chief Executive Officer of the Middleby Corporation, and I will act as Chairman of the meeting. I would like to introduce the following people: Brian Mittelman, Chief Financial Officer and Martin Lindsay, Chief Risk and Administration Officer, Treasury and Secretary James Poole, Chief Technology and Operations Officer and Steve Spittle, Chief Commercial Officer. Mr. Mittleman will act as Secretary of the meeting. I would also like to take this opportunity to introduce our Board of Directors of the company, starting with our Chairman, Gordon O'Brien Kathy McCarthy, John R. Miller III, Robert A. Nirban, Sarah Polisi Chapin and Nassim Ziyad. Also present virtually are representatives from the accounting firm of Ernst and Young, who will be available to answer questions later in the meeting. We will follow the agenda and the rules of conduct posted on the virtual meeting porthole. Following introduction of the items of business, we will address pertinent questions related to those items. Stockholders may submit questions at any time during the meeting in the space provided on the virtual meeting portal. After the meeting has concluded, we will have a short presentation on our 2020 performance. '20 We do not plan to provide any updates at this meeting beyond what has already been publicly disclosed regarding the proposed well built transaction or our most recent quarterly results. Mr. Mittleman, would you please present the notice of the meeting and affidavit of the mailing? I have in my hand a copy of the notice of the annual meeting of stockholders and an affidavit stating that the notice and accompanying proxy materials and annual report were mailed and posted online on I'm sorry, were posted online on 03/31/2021, to all stockholders of record at the close of business on 03/19/2021, the record date for this meeting. The secretary is directed to file the notice of annual meeting and the affidavit of mailing with the minutes of this meeting. In accordance with Delaware law, the board of directors has designated Martin Lindsay as inspector of election. I have requested mister Lindsay to submit his oath as inspector and directed the secretary to file the same with the minutes of this meeting. Will the inspector of elections report on how many stockholders are present in person or by proxy? As of the record date, there was only one class of stock outstanding, common stock. They are now present in person or by proxy to holders of 49,085,242 shares of common stock out of a total of 55,638,477 shares of common stock issued and outstanding as of the record date. This constitute more than a majority of the outstanding shares of common stock entitled to vote at the meeting and therefore, is a quorum presence. Mr. Mittleman, will you present a certified list of stockholders of the company? I present to you an alphabetical list of the stockholders of the company of record at the close of business on 03/19/2021, the record date for this meeting. This list has been open to the examination of any stockholder at the office of the company for more than ten days prior to this meeting, and it will be kept open during this meeting for inspection by any stockholder present. We have four formal items of business to consider at this meeting. We will vote on these items after I have presented all of them. The first item of business is the election of directors. In accordance with the bylaws of the company and the proxy statement failed to stockholders, seven directors will be elected by a majority of the votes cast at the meeting to hold office until the twenty twenty two Annual Meeting of Stockholders and until their successor shall have been duly elected and qualified. Each stockholder is entitled to one vote per share for each director to be elected. Will the secretary report the names of the nominees of the board of directors for election as directors? On behalf of the board of directors, I present the following nominees to be elected as directors of the Middleby Corporation to hold office until the twenty twenty two Annual Meeting of Stockholders and until their successors shall be elected and shall qualify: Timothy John Fitzgerald, Sarah Felici Chapin, Kathy McCarthy, John R. Miller III, Robert A. Nirbaughn, Gordon O'Brien, Ms. Sims Liad. The Board of Directors unanimously recommends a vote in favor of each of the nominees as a director of the company. The secretary has advised that under the company's bylaws, the only persons who have been properly nominated are those nominees listed in the company's proxy statement. I therefore declare that nominations for directors are closed. Proposal number two is the approval on an advisory basis of the compensation of the company's named executive officers as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission. The proposal to approve the compensation of the company's named executive officers is described in detail in the company's proxy statement. The Board of Directors unanimously recommends a vote in favor of proposal number two for ratification. Proposal number three is the approval of the adoption of the company's 2021 long term incentive plan. The proposal to approve the adoption of the 2,021 long term incentive plan is described in detail in the company's proxy statement. The board of directors unanimously recommends a vote in favor of proposal number three for ratification. Proposal number four is the ratification of the selection of Ernst and Young LLP as the company's independent public accountants for the current fiscal year ending 01/01/2022. The board of directors unanimously recommends a vote in favor of proposal number four ratification. If you want to make a question or comment, please submit your question or comment through the virtual meeting portal. You have now heard the four items of business to be voted upon at this meeting. At this time, I declare the voting polls for each of these items to be open. Any stockholder who hasn't yet voted or wishes to change their vote may do so by clicking on the voting button in the virtual meeting portal and following the instructions there. Stockholders who have sent in proxies or voted via telephone or Internet and do not want to change their vote do not need to take any further action. While the polls are open, we now proceed to the question and answer period for the agenda items. I now ask the inspector of election to read any questions that are germane to this meeting. Tim, we have received no questions that are germane to these matters. Now that everyone has had an opportunity to vote, I declare the polls are closed for all matters to be voted upon at this meeting. I understand that the inspection the inspector of election has inspected the proxies and ballots and has a preliminary vote report. Will the inspector please report the results? On proposal number one, a majority of the votes cast at this meeting have voted for the election of each of the nominations of the Board of Directors. And accordingly, Mr. Fitzgerald, Ms. Chapin, Ms. McCarthy, Mr. Miller, Mr. Nurbhan, Mr. O'Brien and Mr. Ziyad have been duly elected as directors of the company. On proposal number two, a majority of the votes cast at this meeting have voted in favor of approval on an advisory basis of the compensation of the company's named executive officers. And accordingly, proposal number two has been approved. On proposal number three, a majority of the votes cast on the proposal have voted in favor of the approval of the adoption of company's 2021 long term incentive plan. And accordingly, proposal number three has been approved. On proposal number four, a majority of the votes cast at this meeting have voted for the ratification of the selection of Ernst and Young LLP as the company's independent public accountants for the fiscal year ending 01/01/2022. And accordingly, proposal number four has been approved. We will be reporting the final vote results in a form eight k to be filed within four days four business days after this meeting. Now that we have completed all the business of the meeting, and therefore, I will entertain a motion to adjourn. I move that the meeting be adjourned. I second the motion. All in favor, please say aye. Aye. There being no opposition, the meeting is adjourned. That concludes our meeting. Thank you, ladies and gentlemen, for attending. And now that the meeting has concluded, we would like to take an opportunity to give our shareholders a short presentation on Middleby's 2020 performance. I would like to begin by first thanking all of our stakeholders, including our employees, customers, suppliers, financial partners and shareholders that have supported us over this past year. As we look back at 2020, I'm very proud of what we accomplished. 2020 was a year that I'm sure will prove to be as transformative as it was challenging. Faced with the COVID pandemic, our Middleby team members swiftly responded to the crisis, adapting our business during significant disruption and responding while dealing with uncertainty. Our people around the globe demonstrated the Middleby can do attitude, working around the clock to assure continuity of our business, meet the essential needs of our food service customers, and most importantly prioritize first the safety of our employees. I'm grateful for the commitment of our team. Our people are our greatest strength and in 2020, this strength was on display. While facing the challenges of COVID, we remain committed to our long term strategy and we invested in the reinvention of our business. We advanced our strategic growth initiatives, furthering the development of our residential and beverage platforms. Our investment in new products, sales and service capabilities at our residential business positioned us well during 2020 as we experienced significant growth as working from and dining at home bolstered the housing market. In 2020, we added to these investments with the opening of the third Middleby Residential showroom in Orange County, California, featuring the latest in kitchen equipment innovations and spectacular designs from our portfolio of premium brands. While international markets were disrupted, we continue to push forward with building upon our global infrastructure. This included expanding manufacturing in China with the opening of our new facility in Qingdao. We also added our capabilities in Europe, investing in our long time distribution partner in The Netherlands to bring an added Middleby sales and service office supporting our products and brands in that region. We continued with our technology initiatives, furthering our efforts in the development of controls and automation. As we started 2020, we debuted our Open Kitchen IoT platform powered by Powerhouse Dynamics, a Middleby company acquired in 2019. The Open Kitchen IoT solution provides the ability to monitor equipment and automated processes across the kitchen and entire facility, delivering to our customers reduced labor costs, energy savings, food safety and enhanced sustainability of their food service operations. Open Kitchen addresses many of the accelerating trends and increasing operating challenges of our changing food service industry. In 2020, we also invested in our sales capabilities with the development of digital sales tools, improving the effectiveness of our marketing and training efforts, while strengthening the relationships with our strategic channel partners. During 2020 and through the pandemic, we also continued to execute upon our acquisition strategy, addressing key areas of focus. We invested in our automation platform with RAM, an automated food dispense system for french fries and other products, providing labor savings and faster service times. We added to our beverage platform with the acquisitions of Deutsche, an innovator in brewing systems for beer, cold brew coffee, kombucha and CBD. And Wild Goose, a leader in canning and specialty bottling for the craft beverage industry. We acquired United Foodservice Equipment and its brand Thor, adding to our manufacturing capabilities and footprint in China the broad set of food service equipment offerings allowing us to better serve this targeted growth market. And we also expanded our portfolio of technologies to address customer and employee safety with investments in Blue Zone and Vai. The Blue Zone patented technology kills airborne pathogens, including viruses such as COVID nineteen with a 99.9995 effective rate and without the need for a filter. Unlike HEPA solutions providing for operating cost savings and ensuring effectiveness of the Blue Zone solution over time. The patented light technology kills surface bacteria, and unlike UV light systems, the Vi technology is safe to humans. As a result, we are able to deploy the solution into dining rooms, kitchen preparation areas, and food holding stations. The combination of our Blue Zone and Vi technologies provide best in class solutions to support a safe environment for customers and employees as we anticipate the return to restaurants and indoor dining. And as we finished 2020, we did so on strong financial footing. Early during the onset of COVID, we took decisive actions to adjust our business and cost structure. Despite the sharp decline in revenues, we were able to maintain high levels of profitability, posting double digit EBITDA margins throughout the pandemic. We generated a record free cash flow of over $500,000,000 during the year, and we retained the strength of our balance sheet, maintaining modest levels of leverage while enhancing the flexibility of our capital structure through the issuance of a convertible note offering. This financial strength positioned us well us well as we entered 2021, providing the ability to make continued strategic investments to grow our business for the long term. And our actions during last year led us to our most recent announcement, the acquisition of Welbilt. We are very excited about this pending transaction. It is a transaction that will allow us to expand our international footprint, enhance our sales and service capabilities, add to our portfolio of brands and accelerate our technology innovations for the foodservice industry. While 2020 proved to be a challenging year, we look back proud of the achievements that have positioned us for the future and we are more excited about our business than ever. Now I'd like to turn the call over to James Poole, our Chief Technology and Operations Officer, for a brief overview of our Middleby Innovation Kitchens, otherwise known as the mix. James? Thank you, Tim. I am pleased to present the Middleby Innovations kitchens, which opened 01/04/2021 in the Dallas Fort Worth area. We built the Middleby Innovation kitchens for our customers and channel partners as a tool for them to use and experience the latest in automation, beverage, brewing, cold side, hot side and IoT technologies that Bitlby has to offer. While the MIC is commercially focused, we also have 6,000 square feet of our 40,000 square feet dedicated to the Middleby Residential brands. With the opening of the Dallas showroom in the next month or so, this will be the fourth Middleby Residential show kitchen, with the others being in Chicago, New York City and Los Angeles. The Middleby Innovation Kitchen showcases 15 active vignettes featuring over 150 pieces of live Middleby equipment, two dining areas, an ad hoc kitchen for our customers to configure and test their unique kitchens themselves and a world class training facility. The kitchen is like no other commercial showroom or demonstration kitchen in the world. We are fortunate to have such a tool. The mission staffed by a team of accomplished culinary talent and is led by our certified master chef, Russell Scott. Our chefs are here to educate, demonstrate and entertain our customers upon a visit to the MEC. And we couldn't be happier. To date, we've had over 70 plus visits from industry leading chain partners, consultants, dealers and factory representatives with phenomenal feedback. Upon leaving the MEC, our customers finally understand the scope and depth of Middleby's products that they can now truly design their entire foodservice experience with Middleby as their sole partner or primary partner. Lastly, I encourage everybody to visit www.middleby.com mic to find out more about the kitchen and to book your visit. Thank you. And this concludes our presentation.