Informational Notes



This report contains forward-looking statements subject to the safe harbor
created by the Private Securities Litigation Reform Act of 1995. The company
cautions readers that these projections are based upon future results or events
and are highly dependent upon a variety of important factors which could cause
such results or events to differ materially from any forward-looking statements
which may be deemed to have been made in this report, or which are otherwise
made by or on behalf of the company. Such factors include, but are not limited
to, the impact of COVID-19 pandemic and the response of governments, businesses
and other third parties; volatility in earnings resulting from goodwill
impairment losses which may occur irregularly and in varying amounts;
variability in financing costs; quarterly variations in operating results;
dependence on key customers; international exposure; foreign exchange and
political risks affecting international sales; ability to protect trademarks,
copyrights and other intellectual property; changing market conditions; the
impact of competitive products and pricing; the timely development and market
acceptance of the company's products; the availability and cost of raw
materials; and other risks detailed herein and from time-to-time in the
company's SEC filings, including the company's 2019 Annual Report on Form 10-K.

During the nine months period ended September 26, 2020, the company's business
experienced significant disruptions due to the COVID-19 pandemic. In response,
the company implemented swift actions to protect our employees, ensure
uninterrupted service to our customers and aggressively adjust our business and
cost structure for a decline in revenues. The company's actions include, but are
not limited to the following:

-Employee Safety - Implemented companywide procedures including enhanced workplace sanitation, travel discontinuation, social distancing, staggered shifts and established work-at-home protocols for non-production employees.

-Customer Support - Ensured continued access to customer support, technical service and uninterrupted shipping of service parts and finished goods. Production continued to meet customer demand with minimal disruptions to address employee safety precautions.



-Cost and Profitability Initiatives - Instituted aggressive reduction of all
controllable and discretionary costs. This included the adjustment of global
office and production workforces in response to near-term reduced demand levels
and reduced cash compensation to executives. Increased focus on prioritizing
product and customers with highest profitability.

-Supply Chain - Established a task force to identify and mitigate supply chain disruption and ensure continuity of business operations and customer support.



-Liquidity and Cash Flow - Reduced capital expenditures for the remainder of
year, enhanced working capital reduction initiatives to drive inventory
efficiency, and suspended the Middleby share repurchase program. Maintained
investments in key strategic initiatives. Improved our capital structure through
the issuance of Convertible Notes and amended our Credit Facility to provide
additional flexibility.

-COVID-19 Product Introductions - Developed and launched products addressing
COVID-19 needs, including sterilization units for N95 masks, mobile and
touchless handwashing stations, plexiglass safety shields for restaurants and
retail locations, mobile foodservice stations and hand and cleaning sanitizer
produced at our most recent acquired company Deutsche.

The company believes that these aggressive cost reduction and liquidity preservation actions serve to position us appropriately and provide additional operating and financial flexibility to successfully navigate this uncertain environment.


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                               Net Sales Summary
                             (dollars in thousands)

                                                       Three Months Ended                                                                Nine Months Ended
                                      Sep 26, 2020                             Sep 28, 2019                            Sep 26, 2020                            Sep 28, 2019
                                Sales              Percent               Sales              Percent              Sales              Percent              Sales              Percent
Business Segments:
Commercial Foodservice     $    371,223               58.5  %       $    500,990               69.2  %       $ 1,081,847               60.6  %       $ 1,471,800               67.8  %
Food Processing                 110,648               17.4                89,147               12.3              316,477               17.7              279,474               12.9
Residential Kitchen             152,654               24.1               133,877               18.5              385,637               21.7              420,546               19.3
  Total                    $    634,525              100.0  %       $    724,014              100.0  %       $ 1,783,961              100.0  %       $ 2,171,820              100.0  %

Results of Operations

The following table sets forth certain consolidated statements of earnings items as a percentage of net sales for the periods:



                                                                    Three Months Ended                               Nine Months Ended
                                                         Sep 26, 2020             Sep 28, 2019            Sep 26, 2020             Sep 28, 2019
Net sales                                                      100.0  %                   100.0  %              100.0  %                   100.0  %
Cost of sales                                                   64.9                       62.7                  64.9                       62.5
Gross profit                                                    35.1                       37.3                  35.1                       37.5
Selling, general and administrative expenses                    20.3                       20.0                  21.6                       20.5
Restructuring                                                    1.1                        0.6                   0.6                        0.3

Income from operations                                          13.7                       16.7                  12.9                       16.7

Interest expense and deferred financing amortization, net

                                                              2.9                        2.9                   3.1                        2.9

Net periodic pension benefit (other than service costs) (1.6) 


               (1.0)                 (1.7)                      (1.0)
Other (income) expense, net                                        -                        0.2                   0.2                          -
Earnings before income taxes                                    12.4                       14.6                  11.3                       14.8
Provision for income taxes                                       2.9                        3.3                   2.6                        3.6
Net earnings                                                     9.5  %                    11.3  %                8.7  %                    11.2  %



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Three Months Ended September 26, 2020 as compared to Three Months Ended September 28, 2019

NET SALES. Net sales for the three months period ended September 26, 2020
decreased by $89.5 million or 12.4% to $634.5 million as compared to $724.0
million in the three months period ended September 28, 2019. Net sales increased
by $8.0 million, or 1.1%, from the fiscal 2019 acquisitions of Pacproinc, Brava
and Synesso and fiscal 2020 acquisitions of RAM and Deutsche. Excluding
acquisitions, net sales decreased $97.5 million, or 13.5%, from the prior year
period. The impact of foreign exchange rates on foreign sales translated into
U.S. Dollars for the three months period ended September 26, 2020 increased net
sales by approximately $4.6 million or 0.6%. Excluding the impact of foreign
exchange and acquisitions, sales decreased 14.1% for the three months period
ended September 26, 2020 as compared to the prior year period, including a net
sales decrease of 27.4% at the Commercial Foodservice Equipment Group, a net
sales increase of 22.4% at the Food Processing Equipment Group and a net sales
increase of 11.4% at the Residential Kitchen Equipment Group.

•Net sales of the Commercial Foodservice Equipment Group decreased by $129.8
million, or 25.9%, to $371.2 million in the three months period ended September
26, 2020, as compared to $501.0 million in the prior year period. Net sales from
the acquisitions of Synesso, RAM, and Deutsche, which were acquired on November
27, 2019, January 13, 2020, and March 2, 2020, respectively, accounted for an
increase of $5.9 million during the three months period ended September 26,
2020. Excluding the impact of acquisitions, net sales of the Commercial
Foodservice Equipment Group decreased $135.7 million, or 27.1%, as compared to
the prior year period. Excluding the impact of foreign exchange and
acquisitions, net sales decreased $137.3 million or 27.4% at the Commercial
Foodservice Equipment Group. Domestically, which is considered to be the U.S.
and Canada, the company realized a sales decrease of $80.8 million, or 23.3%, to
$265.8 million, as compared to $346.6 million in the prior year period. The
decline in domestic sales reflects the impacts of COVID-19. This includes an
increase of $3.8 million from recent acquisitions. Excluding the acquisitions,
the net decrease in domestic sales was $84.6 million, or 24.4%. International
sales decreased $49.0 million, or 31.7%, to $105.4 million, as compared to
$154.4 million in the prior year period. This includes an increase of $2.1
million from the recent acquisitions and an increase of $1.6 million related to
the favorable impact of exchange rates. Excluding acquisitions and foreign
exchange, the net sales decrease in international sales was $52.7 million, or
34.1%. The decrease in international revenues reflects the outbreak of COVID-19.

•Net sales of the Food Processing Equipment Group increased by $21.5 million, or
24.1%, to $110.6 million in the three months period ended September 26, 2020, as
compared to $89.1 million in the prior year period. Excluding the impact of
foreign exchange and the acquisition of Pacproinc, acquired July 16, 2019, net
sales increased $20.0 million, or 22.4% at the Food Processing Equipment Group.
Domestically, the company realized a sales increase of $24.9 million, or 43.5%,
to $82.1 million, as compared to $57.2 million in the prior year period. The
increase in domestic sales reflects growth across our product portfolio.
Excluding the acquisition, the net increase in domestic sales was $24.1 million,
or 42.1%. International sales decreased $3.4 million, or 10.7%, to $28.5
million, as compared to $31.9 million in the prior year period. Excluding the
acquisition and foreign exchange, the net sales decrease in international sales
was $4.1 million, or 12.9%. The decrease in international revenues reflects
declines in sales primarily due to the disruptive impact of COVID-19.

•Net sales of the Residential Kitchen Equipment Group increased by $18.8
million, or 14.0%, to $152.7 million in the three months period ended September
26, 2020, as compared to $133.9 million in the prior year period. Excluding the
impact of foreign exchange and the acquisition of Brava, acquired November 19,
2019, net sales increased $15.2 million, or 11.4% at the Residential Kitchen
Equipment Group. Domestically, the company realized a sales increase of $10.4
million, or 12.0%, to $97.3 million, as compared to $86.9 million in the prior
year period. The increase in domestic sales is primarily related to strong
consumer demand for out premium appliance brands. Excluding the acquisition, the
net increase in domestic sales was $9.1 million, or 10.5%. International sales
increased $8.4 million, or 17.9%, to $55.4 million, as compared to $47.0 million
in the prior year period. This includes a favorable impact of exchange rates of
$2.3 million. Excluding foreign exchange, the net sales increase in
international sales was $6.1 million, or 13.0%, primarily due to strong demand
for our premium appliance brands.

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GROSS PROFIT. Gross profit decreased to $222.7 million in the three months
period ended September 26, 2020 from $270.0 million in the prior year period,
primarily reflecting lower sales volumes related to COVID-19, lower margins at
recent acquisitions, offset by the favorable impact of foreign exchanges rates
of $1.6 million. The gross margin rate was 37.3% in the three months period
ended September 28, 2019 as compared to 35.1% in the current year period.

•Gross profit at the Commercial Foodservice Equipment Group decreased by $59.6
million, or 31.9%, to $127.5 million in the three months period ended September
26, 2020, as compared to $187.1 million in the prior year period. Gross profit
from the acquisitions of Synesso, RAM, and Deutsche increased gross profit by
$1.9 million. Excluding acquisitions, gross profit decreased by $61.5 million
primarily related to lower sales volumes. The impact of foreign exchange rates
increased gross profit by approximately $0.6 million. The gross margin rate
decreased to 34.3%, as compared to 37.3% in the prior year period. The gross
margin rate, excluding acquisitions and the impact of foreign exchange, was
34.4%.

•Gross profit at the Food Processing Equipment Group increased by $9.3 million,
or 29.9%, to $40.4 million in the three months period ended September 26, 2020,
as compared to $31.1 million in the prior year period. Excluding the
acquisition, gross profit increased by $9.1 million. The impact of foreign
exchange rates increased gross profit by approximately $0.4 million. The gross
profit margin rate increased to 36.5%, as compared to 34.9% in the prior year
period primarily related to higher sales volumes and product mix. The gross
margin rate, excluding the acquisition and the impact of foreign exchange, was
36.5%.

•Gross profit at the Residential Kitchen Equipment Group increased by $3.4
million, or 6.5%, to $55.5 million in the three months period ended September
26, 2020, as compared to $52.1 million in the prior year period. The impact of
foreign exchange rates increased gross profit by approximately $0.6 million. The
gross margin rate decreased to 36.3%, as compared to 38.9% in the prior year
period. The gross margin rate, excluding the acquisition and the impact of
foreign exchange, was 36.6%.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Combined selling, general and
administrative expenses decreased from $144.5 million in the three months period
ended September 28, 2019 to $128.8 million in the three months period ended
September 26, 2020.  As a percentage of net sales, selling, general, and
administrative expenses were 20.0% in the three months period ended September
28, 2019, as compared to 20.3% in the three months period ended September 26,
2020.

Selling, general and administrative expenses reflect increased costs of $5.5
million associated with acquisitions, including $0.9 million of intangible
amortization expense. Selling, general and administrative expenses decreased
$6.8 million related to compensation costs and commissions and $12.2 million due
to controllable cost reductions within travel & entertainment, convention costs,
professional fees and advertising. Foreign exchange rates had an unfavorable
impact of $1.0 million. The compensation decreases were partially offset by a
$3.3 million increase related to higher non-cash share-based compensation.

RESTRUCTURING EXPENSES. Restructuring expenses were $4.2 million for the three
months period ended September 28, 2019 and $7.3 million for the three months
period ended September 26, 2020. Restructuring expenses in the current period
related primarily to headcount reductions and facility consolidations within the
Commercial Foodservice Equipment Group. In the three months period ended
September 28, 2019, restructuring expenses related primarily to headcount
reductions and cost reduction initiatives related to facility consolidations
within the Commercial Foodservice Equipment Group and Residential Kitchen
Equipment Group.

NON-OPERATING EXPENSES. Interest and deferred financing amortization costs were
$18.4 million in the three months period ended September 26, 2020, as compared
to $20.8 million in the prior year period, reflecting the reduction in the
average interest rates under the Credit Facility and benefit from the
Convertible Notes, offset by higher non-cash interest from the Convertible
Notes. Net periodic pension benefit (other than service costs) increased $2.9
million to $10.1 million in the three months period ended September 26,
2020 from $7.2 million in the prior year period, related to the decrease in
discount rate used to calculate the interest cost and higher expected returns on
assets driven by higher asset values at the end of fiscal 2019. Other income
was $0.3 million in the three months period ended September 26, 2020, as
compared to other expense of $1.4 million in the prior year period and consists
mainly of foreign exchange gains and losses.

INCOME TAXES. A tax provision of $18.2 million, at an effective rate of 23.1%,
was recorded during the three months period ended September 26, 2020, as
compared to $24.2 million at an effective rate of 22.8%, in the prior year
period. The effective tax rates in 2020 and 2019 are higher than the federal tax
rate of 21% primarily due to state taxes..


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Nine Months Ended September 26, 2020 as compared to Nine Months Ended September 28, 2019

NET SALES. Net sales for the nine months period ended September 26, 2020
decreased by $387.8 million or 17.9% to $1,784.0 million as compared to $2,171.8
million in the nine months period ended September 28, 2019. Net sales increased
by $61.8 million, or 2.8%, from the fiscal 2019 acquisitions of Cooking
Solutions Group, Powerhouse, Ss Brewtech, Pacproinc, Brava and Synesso and
fiscal 2020 acquisitions of RAM and Deutsche. Excluding acquisitions, net sales
decreased $449.6 million, or 20.7%, from the prior year period. The impact of
foreign exchange rates on foreign sales translated into U.S. Dollars for the
nine months period ended September 26, 2020 decreased net sales by approximately
$4.1 million or 0.2%. Excluding the impact of foreign exchange and acquisitions
sales decreased 20.5% for nine months period ended September 26, 2020 as
compared to the prior year period, including a net sales decrease of 29.2% at
the Commercial Foodservice Equipment Group, a net sales increase of 8.7% at the
Food Processing Equipment Group and a net sales decrease of 9.4% at the
Residential Kitchen Equipment Group.

•Net sales of the Commercial Foodservice Equipment Group decreased by $389.9
million, or 26.5%, to $1,081.9 million in the nine months period ended September
26, 2020, as compared to $1,471.8 million in the prior year period. Net sales
from the acquisitions of Cooking Solutions Group, Powerhouse, Ss Brewtech,
Synesso, RAM, and Deutsche, which were acquired on April 1, 2019, April 1, 2019,
June 15, 2019, November 27, 2019, January 13, 2020, and March 2, 2020,
respectively, accounted for an increase of $44.2 million during the nine months
period ended September 26, 2020. Excluding the impact of acquisitions, net sales
of the Commercial Foodservice Equipment Group decreased $434.1 million, or
29.5%, as compared to the prior year period. Excluding the impact of foreign
exchange and acquisitions, net sales decreased $430.3 million or 29.2% at the
Commercial Foodservice Equipment Group. Domestically, the company realized a
sales decrease of $236.4 million, or 23.5%, to $768.2 million, as compared to
$1,004.6 million in the prior year period. This includes an increase of $36.3
million from recent acquisitions. Excluding acquisitions, the net decrease in
domestic sales was $272.7 million, or 27.1%. The decline in domestic sales
reflects the impacts of COVID-19. International sales decreased $153.5 million,
or 32.9%, to $313.7 million, as compared to $467.2 million in the prior year
period. This includes an increase of $7.9 million from the recent acquisitions
and a decrease of $3.8 million related to the unfavorable impact of exchange
rates. Excluding acquisitions and foreign exchange, the net sales decrease in
international sales was $157.6 million, or 33.7%. The decrease in international
revenues reflects the impacts of COVID-19.

•Net sales of the Food Processing Equipment Group increased by $37.0 million, or
13.2%, to $316.5 million in the nine months period ended September 26, 2020, as
compared to $279.5 million in the prior year period. Excluding the impact of
foreign exchange and the acquisition of Pacproinc, acquired July 16, 2019, net
sales increased $24.3 million or 8.7% at the Food Processing Equipment Group.
Domestically, the company realized a sales increase of $54.8 million, or 31.7%,
to $227.8 million, as compared to $173.0 million in the prior year period.
Excluding the acquisition, the net increase in domestic sales was $42.1 million,
or 24.3%. The increase in domestic sales reflects growth in protein equipment
sales. International sales decreased $17.8 million, or 16.7%, to $88.7 million,
as compared to $106.5 million in the prior year period. Excluding the
acquisition and foreign exchange, the net sales decrease in international sales
was $17.8 million, or 16.7%. The decrease in international revenues reflects
declines in sales primarily due to the disruptive impact of COVID-19.

•Net sales of the Residential Kitchen Equipment Group decreased by $34.9 million
or 8.3%, to $385.6 million in the nine months period ended September 26, 2020,
as compared to $420.5 million in the prior year period. Excluding the impact of
foreign exchange and the acquisition of Brava, acquired November 19, 2019, net
sales decreased $39.5 million, or 9.4%, at the Residential Kitchen Equipment
Group. Domestically, the company realized a sales decrease of $6.6 million, or
2.4%, to $264.1 million, as compared to $270.7 million in the prior year period.
Excluding the impact of the acquisition, the net decrease in domestic sales was
$10.6 million, or 3.9%. The decline in domestic sales reflects the impacts of
COVID-19 through the first half of the year, partially offset by strong consumer
demand in the three months period ended September 28, 2019. International sales
decreased $28.3 million, or 18.9%, to $121.5 million, as compared to $149.8
million in the prior year period. Excluding foreign exchange, the net sales
decrease in international sales was $28.9 million, or 19.3%. The decline of
sales in the European market reflects the impacts of Brexit and the outbreak of
COVID-19 partially offset by strong consumer demand in the three months period
ended September 28, 2019.

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GROSS PROFIT. Gross profit decreased to $626.1 million in the nine months period
ended September 26, 2020 from $813.8 million in the prior year period, primarily
related to lower sales volumes due to COVID-19 and the unfavorable impact of
foreign exchanges rates of $0.7 million. The gross margin rate was 37.5% in the
nine months period ended September 28, 2019 as compared to 35.1% in the current
year period.

•Gross profit at the Commercial Foodservice Equipment Group decreased by $176.0
million, or 31.8%, to $377.6 million in the nine months period ended September
26, 2020, as compared to $553.6 million in the prior year period. Gross profit
from acquisitions accounted for $10.9 million of the increase in gross profit
during the period. Excluding the recent acquisitions, gross profit decreased by
$186.9 million on lower sales volumes. The impact of foreign exchange rates
decreased gross profit by approximately $0.6 million. The gross margin rate
decreased to 34.9%, as compared to 37.6% in the prior year period. The gross
margin rate, excluding acquisitions and the impact of foreign exchange, was
35.3%.

•Gross profit at the Food Processing Equipment Group increased by $14.1 million,
or 14.3%, to $112.6 million in the nine months period ended September 26, 2020,
as compared to $98.5 million in the prior year period. Excluding the
acquisition, gross profit increased by approximately $9.8 million. The impact of
foreign exchange rates decreased gross profit by approximately $0.3 million. The
gross profit margin rate increased to 35.6%, as compared to 35.2% in the prior
year period. The gross margin rate, excluding the acquisition and the impact of
foreign exchange, was 35.7%.

•Gross profit at the Residential Kitchen Equipment Group decreased by $26.1
million, or 16.0%, to $137.5 million in the nine months period ended September
26, 2020, as compared to $163.6 million in the prior year period. The impact of
foreign exchange rates increased gross profit by approximately $0.2 million. The
gross margin rate decreased to 35.7%, as compared to 38.9% in the prior year
period, primarily related to lower sales volumes.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Combined selling, general and
administrative expenses decreased from $445.0 million in the nine months period
ended September 28, 2019 to $384.6 million in the nine months period ended
September 26, 2020. As a percentage of net sales, selling, general, and
administrative expenses were 20.5% in the nine months period ended September 28,
2019, as compared to 21.6% in the nine months period ended September 26, 2020.

Selling, general and administrative expenses reflect increased costs of
$21.1 million associated with acquisitions, including $5.4 million of intangible
amortization expense. Selling, general and administrative expenses decreased
$40.7 million related to compensation costs and commissions and $32.3 million
due to controllable cost reductions within professional fees, travel &
entertainment, convention costs and advertising. Foreign exchange rates had a
favorable impact of $1.7 million. The compensation decreases were partially
offset by a $11.2 million increase related to higher non-cash share-based
compensation. The prior year period expenses also included $10.1 million related
to the transition costs with respect to the former Chairman and Chief Executive
Officer upon his retirement in February 2019.

RESTRUCTURING EXPENSES. Restructuring expenses increased $3.5 million from $6.8
million in the nine months period ended September 28, 2019 to $10.3 million in
the nine months period ended September 26, 2020. Restructuring expenses in the
current period related primarily to headcount reductions and facility
consolidations within the Commercial Foodservice Equipment Group. In the nine
months period ended September 28, 2019, restructuring charges related primarily
to headcount reductions and cost reduction initiatives related to facility
consolidations at the Commercial Foodservice Equipment Group and Residential
Kitchen Equipment Group.

NON-OPERATING EXPENSES. Interest and deferred financing amortization costs were
$55.9 million in the nine months period ended September 26, 2020, as compared to
$63.3 million in the prior year period, reflecting the reduction in the average
interest rates under the Credit Facility and benefit from the Convertible Notes,
offset by higher non-cash interest from the Convertible Notes. Net periodic
pension benefit (other than service costs) increased $7.8 million to $30.0
million in the nine months period ended September 26, 2020 from $22.2 million in
the prior year period, related to the decrease in discount rate used to
calculate the interest cost and higher expected returns on assets driven by
higher asset values at the end of fiscal 2019. Other expense was $3.4 million in
the nine months period ended September 26, 2020, as compared to other income
of $0.5 million in the prior year period and consists mainly of foreign exchange
gains and losses.

INCOME TAXES. A tax provision of $46.5 million, at an effective rate of 23.0%,
was recorded during the nine months period ended September 26, 2020, as compared
to $78.2 million at an effective rate of 24.3%, in the prior year period. The
effective rates in 2020 and 2019 are higher than the federal tax rate of 21%
primarily due to state taxes.


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Financial Condition and Liquidity
During the nine months ended September 26, 2020, cash and cash equivalents
increased by $125.8 million to $220.3 million from $94.5 million at December 28,
2019. Borrowings decreased from $1.9 billion to $1.8 billion at December 28,
2019 and September 26, 2020, respectively.
OPERATING ACTIVITIES. Net cash provided by operating activities was $316.2
million for the nine months ended September 26, 2020, compared to $229.7 million
for the nine months ended September 28, 2019.

During nine months period ended September 26, 2020, net cash provided by changes
in assets and liabilities amounted to $80.9 million. This resulted from payments
and collections largely attributable to reduction in sales volumes at the
Commercial Foodservice Equipment Group and Residential Kitchen Equipment Group,
as well as decreases in inventory levels. Changes also included a $19.9
million decrease in accrued expenses and other non-current liabilities including
impacts from the timing of payments made for various customer programs and
compensation programs.
INVESTING ACTIVITIES. During the nine months ended September 26, 2020, net cash
used for investing activities amounted to $53.5 million. This included $33.7
million primarily for the 2020 acquisitions of RAM, Deutsche. Additionally,
$29.8 million was expended, primarily associated with additions and upgrades of
production equipment, manufacturing facilities and residential and commercial
showrooms, and was offset by $9.4 million proceeds on the sale of properties
following facility consolidations actions.
FINANCING ACTIVITIES. Net cash flows used by financing activities were $134.8
million during the nine months ended September 26, 2020. On January 31, 2020,
the company entered into an amended and restated
five-year, $3.5 billion multi-currency senior secured credit agreement (the
"Credit Facility").  On August 21, 2020, the company issued $747.5 million
aggregate principal amount of 1.00% the Convertible Senior Notes due 2025 (the
"Notes"), and incurred $17.6 million of issuance costs. The company then entered
into privately negotiated capped call transactions (the "Capped Call
Transactions") in an aggregate amount of $104.7 million. A portion of the net
proceeds from the Notes offering was used to prepay $400.0 million aggregate
principal amount of its term loan obligations and to execute an amendment to the
Credit Facility. The company incurred approximately $11.0 million of debt
issuance costs, in aggregate, for amendments to the Credit Facility.
In addition to the term loan prepayment, the company's borrowing activities
during the nine months ended September 26, 2020 included $270.2 million of net
repayments under its Credit Facility, as a result of utilization of net proceeds
from the Convertible Notes transactions, as well as repaying borrowing made
during the first half of the year.
Additionally, the company repurchased $77.2 million of Middleby common shares
during the nine months ended September 26, 2020. This was comprised of $7.5
million to repurchase 108,473 shares of Middleby common stock that were
surrendered to the company for withholding taxes related to restricted stock
vestings and $69.7 million used to repurchase 896,965 shares of its common stock
under a repurchase program.
At September 26, 2020, the company was in compliance with all covenants pursuant
to its borrowing agreements. The company has run various scenarios to estimate
the impact of the COVID-19 pandemic and continues to believe that its future
cash generated from operations, together with its capacity under its Credit
Facility and its cash on hand, will provide adequate resources to meet its
working capital needs and cash requirements and maintain compliance with
financial covenants in its Credit Facility for at least the next 12 months.

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Recently Issued Accounting Standards



See Part I, Item 1, Notes to Condensed Consolidated Financial Statements, Note 4
- Recent Issued Accounting Standards, of this Quarterly Report on Form 10-Q.
Critical Accounting Policies and Estimates
Management's discussion and analysis of financial condition and results of
operations are based upon the company's consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these financial statements requires the
company to make significant estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses as well as related
disclosures. On an ongoing basis, the company evaluates its estimates and
judgments based on historical experience and various other factors that are
believed to be reasonable under the circumstances. Actual results may differ
from these estimates under different assumptions or conditions and any such
differences could be material to the company's consolidated financial
statements. There have been no changes in the company's critical accounting
policies, which include revenue recognition, inventories, goodwill and other
intangibles, pensions benefits, and income taxes, as discussed in the company's
Annual Report on Form 10-K for the year ended December 28, 2019 (the "2019
Annual Report on Form 10-K") other than those described below.

During the nine months period ended September 26, 2020, the company adopted ASU
2017-04, "Intangibles - Goodwill and Other (Topic 350)". The amendments simplify
the subsequent measurement of goodwill, by removing the second step of the
goodwill impairment test. The company's qualitative assessment of goodwill
impairment remains consistent; however, in the case of an impairment, the
company will apply a one-step quantitative test and record the amount of
goodwill impairment as the excess of a reporting unit's carrying amount over its
fair value.

During the nine months period ended September 26, 2020, the company completed
the issuance of convertible debt with debt and equity components. The company
evaluated the different components and features of the hybrid instrument and
determined whether certain elements were embedded derivative instruments which
require bifurcation. Components of convertible debt instruments that upon
conversion may be settled fully in cash or partly in cash based on a net-share
settlement basis are accounted for separately as long-term debt and equity when
the conversion feature of the convertible bonds constitute an embedded equity
instrument. When an equity instrument is identified, proceeds from issuance are
allocated between debt and equity by measuring first the liability component and
then determining the equity component as a residual amount. The liability
component is measured as the fair value of a similar nonconvertible debt, which
results in the recognition of a debt discount. In subsequent periods, the
company will amortize the debt discount to interest expense, net within the
Condensed Consolidated Statements of Comprehensive Income, using the effective
interest method based on the expected maturity of the debt. The equity component
is reported in additional paid-in capital within the Condensed Consolidated
Statement of Changes in Stockholders' Equity and is not remeasured as long as it
continues to meet the conditions for equity classification.

The company allocated transaction costs related to the issuance of convertible
debt using the same proportions as the proceeds from the convertible debt.
Transaction costs attributable to the liability component are recorded as a
direct deduction from the related debt liability in the Condensed Consolidated
Balance Sheets and are amortized to interest expense, net within the Condensed
Consolidated Statements of Comprehensive Income over the term of the convertible
debt using the effective interest rate method. Transaction costs attributable to
the equity component are netted within additional paid-in capital within the
Condensed Consolidated Statement of Stockholders' Equity.

For additional information regarding our convertible debt, see Note 12, Financing Arrangements, in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.


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