Welcome to The Middleby fourth quarter 2020 conference call. We will start today's call with comments from management, then open the lines up for questions. We will give instructions on how to get in the queue at that time. With us today from management are Chief Executive Officer, Tim FitzGerald, Chief Financial Officer, Bryan Mittelman, Chief Operating Officer, David Brewer, Chief Technology and Operations Officer, James Pool, and Chief Commercial Officer, Steve Spittle. Now I'd like to turn the call over to Mr. FitzGerald for opening comments. Please go ahead. Thank you, everybody, for joining us today on our fourth quarter conference call. As we begin, please note there are slides to accompany this call on our investor page. I am very pleased to welcome James Pool and Steve Spittle on the call this morning. As recently announced, James and Steve have been appointed as officers of the company, expanding and greatly enhancing our leadership team. James and Steve each bring tremendous experience in the food service industry, along with a long tenure at Middleby. They have successfully been leading a number of our core brands such as TurboChef, Pitco, Blodgett, and Middleby Marshall. James and Steve have also been executing on key initiatives over the past several years that are critical to our business as we accelerate the pace of technology advancement, innovate the customer experience, and differentiate Middleby in the marketplace. In addition to their officer roles, James and Steve Spittle will oversee the portfolio of cooking brands within our commercial food service segment. I'm also very excited to have announced Korey Kohl to lead our Middleby Beverage Group, and Najib Maalouf to lead our Residential Kitchen Equipment business. Korey and Najib bring a deep food service industry experience and are longtime Middleby executives. Both have successfully led integration efforts across many businesses we have onboarded through acquisition. The Beverage Group and our Residential Kitchen Equipment business have expanded rapidly since their inception and present exciting continued growth opportunities for Middleby. Korey and Najib, in their new roles, join Mark Salman, our president that has been leading the Food Processing Group. This expanded team provides leadership for each of our business segments, ensuring the continued execution of growth initiatives, and bolsters our efforts to realize synergies across each of our segments. I'm very excited about the deep bench of talent that we continue to develop at all levels and across the entire organization. The broad team of highly capable leaders is working in collaboration as we leverage our strengths and capabilities across all of Middleby. I believe our people are our most important asset and provide us a true competitive advantage. The Middleby team is stronger than ever. As I'm sure most of you have also seen, David Brewer recently announced his plans to retire at the end of this year. Dave has provided tremendous leadership to the organization for more than a decade. Dave has been a driving force at Middleby while we have substantially grown our business many times over through business acquisition, customer acquisition, and product development. He has been a mentor to many across our company, a committed advocate for all of our customers, a positive lasting imprint on the culture of the company, and a true partner and friend through our journey together. I'm very happy that he will be continuing with us throughout 2021 as we have a very exciting year ahead. Lastly, I would like to once again thank our entire Middleby team around the world. The quick actions, creativity, and dedication of the entire team was on display over the past year as we navigated the uncertainty and challenges of COVID. The efforts and commitment of our team have allowed us to maintain the priority on our customers while we also delivered the achievements of 2020. To this team, I am grateful. As we look back at 2020, I am proud of what we accomplished. Financially, we ended the year in a great position. We reported record operating cash flows in 2020, realized strong profitability across all three of our business segments, and we developed a record backlog, providing momentum as we head into 2021. Despite the impact of COVID, we remain committed to our long-term strategy as we invested in the reinvention of our business. We advanced our technology initiatives, particularly in areas such as controls, IoT, and automation to capture rapidly changing market dynamics. We expanded our sales capabilities with the development of digital sales programs, improved upon the effectiveness of our sales organization, and strengthened the relationships with our strategic channel partners. We bolstered our capital structure, enabling us to reengage our acquisition strategy, and completed acquisitions to further extend our beverage business, add to our portfolio of innovative technologies, and expand our global manufacturing capabilities. We also continue to invest in showrooms for our residential and commercial businesses, and just this past week announced the opening of our Middleby Innovation Kitchens in Dallas. These innovation centers allow us to engage with designers, channel partners, and customers as we promote the latest technologies, product innovations, and integrated solutions we carry across our entire portfolio of Middleby brands. In 2020, we also continued to execute upon important initiatives to improve our profitability as we emerge from COVID. We've progressed manufacturing, supply chain, and acquisition integration efforts across the business. This will result in improved profit margins at each of our business segments in the upcoming year. As we move into 2021, we are optimistic about improving market conditions and the strength of our positioning at each of the business segments. At Commercial Foodservice, while the industry has been significantly disrupted, it has also proven resilient. Even though the foodservice industry in 2021 is not expected to recover to 2019 levels, it is anticipated to improve meaningfully from 2020. Our customers that quickly adapted business models during COVID are making strategic investments in their foodservice operations, leading to new kitchen layouts and the adoption of new technologies. We're actively engaged with customers to address rapidly changing needs, and the many investments we have made leading into 2021 are now more relevant than ever. At our residential business, new home starts and existing home sales continue to be robust, while increased time spent at home is resulting in kitchen remodels. This presents a favorable backdrop to our business for the upcoming year. We're also benefiting from the many new product launches and investments in our sales and service capabilities made over the past several years. All of this has positioned us to capture a growing market share. At Food Processing, travel restrictions continue to be a challenge to customer demonstrations and the installation of equipment. This is particularly impactful due to the amount of cross-border business we have. Despite these challenges, the engagement with customers and the project pipeline remains strong. As COVID restrictions lift, opportunities exist for our products in growing market segments, such as cured meats and alternative protein, and we are prepared with solutions to meet increased demand for automation to address labor and employee safety concerns at our customers. In summary, we are proud of the team that successfully navigated the challenges of the past year, and we are confident the actions taken have successfully positioned us for the year ahead and toward our vision for the future. I'd like to now turn it over to Bryan for the financial discussion. Thanks, Tim. For the fourth quarter, our GAAP earnings per share were $0.94. Adjusted EPS, which excludes amortization expense and non-operating pension income, as well as other items noted in the reconciliation at the back of our press release, was $1.62, which was negatively impacted by $0.04 from acquisitions. Operationally, it was a strong quarter for us. We generated all-time record sales and earnings in the Residential segment. Food Processing closed 2020 with their strongest revenue quarter of the year, and earnings were at the highest percentage level in three years. Commercial Foodservice grew their top line approximately 15% sequentially over Q3 and nearly the same on EBITDA. Our free cash flow exceeded $200 million for the quarter. I've been especially excited to report one number in particular, $500 million. Actually, $504 million. That represents our free cash flow for all of 2020. Being disciplined about cash flows is core to running the business for us. We have demonstrated our ability to manage costs and cash while also investing, driving innovation, and providing excellent service to our customers. Jumping into revenues and segment performance. On a consolidated basis, revenues declined 7%, or 9% organically, as COVID significantly impacted our results. Across the company, we were able to deliver gross margin of just over 35%, which was in line with Q3. By the way, all margin values I will discuss are on an organic basis as well, meaning excluding acquisitions and FX impacts. Total company adjusted EBITDA was $145 million and represented over 20% of revenues, which was also generally in line with Q3. We achieved this while continuing to invest around $5 million in technology initiatives quarterly. Commercial Foodservice revenues globally were down under 19% organically, and when looking at just North America, the decline was approximately 9%. The international decline was 32%. In Residential, we saw revenue up 15% as strong demand persists for our premium appliances and outdoor cooking platform. This led to gross margins of 37% and adjusted EBITDA of over 20%. In the quarter, we did take a charge, which is a component of the impairment shown on the income statement, for the sale of our Fired Earth Tile business, which contributed around $20 million of revenues in 2020. This action will improve profitability of the segment going forward. In Food Processing, revenues increased approximately 9% sequentially and were almost flat organically compared to the prior year. Gross margins were 36%, and the adjusted EBITDA margin was over 23%. As is typically the case for the segment, Q4 was the strongest quarter of the year. Interest expense was nearly $23 million. This was our first full quarter with our improved current capital structure in place, having issued our convertible notes back in August. Beyond the 1% coupon, these notes did have $5 million of non-cash interest expense attributed to them in Q4. However, we are to adopt the new GAAP rules on convertibles accounting in 2021. This non-cash interest expense will not be required in our future results. One more 2021 item that I want to briefly address, the non-cash pension benefit that is depicted in the non-operating section of our income statement is expected to be at relatively consistent levels in 2021 as compared to 2020, based on current exchange rates. As I mentioned earlier, for the quarter, we generated strong cash flows, $209 million from operations, with $70 million in benefit from reduced working capital levels from inventory and other cash management efforts. For the past 12 months, as I said, free cash flow is $504 million, a record level for us. Working capital changes as a result of the pandemic did positively impact cash flows by over $170 million. We do expect some future reversal of this, so reported 2021 cash flows will likely be at a lower amount as working capital adjusts to changing revenue levels. Nonetheless, our discipline remains, and this is a key focus area, especially around inventory. During Q4, we paid down debt by $109 million, and over the full year, we have reduced our net debt level by $203 million. Our total leverage ratio is 3.1x, while our covenant limit is 5.5x. We also have over $1.3 billion of current borrowing capacity under our credit agreement. As with all parts of the business, 2020 was a dynamic year for us from a treasury perspective. We took deliberate actions to improve our capital structure. We refinanced our bank credit agreement twice. Once was to expand the facility as we began the year. We increased capacity and benefited from the relatively low rates we earned, given our profitability levels and cash flow-generating abilities. The second time was when we further enhanced our capital structure in conjunction with the issuance of the convertible notes back in August. With our banking partners, we were able to put in place the flexibility and availability to continue our strategic priorities. During the year, we also bought back over $85 million of stock. We made acquisitions and investments with a total value over $100 million, which included $86 million in cash and $16 million in equity issuances. As we resumed making acquisitions and investments in Q4, we expanded our offerings in Asia and have accelerated new product introductions into this receptive market. We also expanded our product offerings of beverage products with the acquisition of Wild Goose Filling. We continue to demonstrate our ability to innovate and bring complete solutions to our customers. I also find it interesting in how our innovation leads to further innovation by our customers. To this point, another personal reflection. In the past, I've talked about my family's favorite Middleby products. For this quarter, I'm being a bit self-centered. Rather than including my boys, I will focus on the beverage products that I enjoy from time to time. My favorite local restaurant, like many, has added cocktails to their takeout menus to help survive during these crazy times. They have partnered with a local Chicago-area company, Blue Blazer, which utilizes our Ss Brewtech products to bring the bottled drinks to market. By the way, beyond beer and cocktails, Ss Brewtech's amazing product portfolio can cold brew coffee in record time for both commercial and residential uses. Craft brewing is another area of growth for us. I've enjoyed some beers offered at Pilot Project Brewing, which utilizes systems from Deutsche Beverage Technology, which was our first acquisition of 2020. What is especially unique and innovative about Pilot Project is that they are a brewing incubator. They have addressed barriers to entry to support talented brewers in bringing their new beer recipes and styles to market. Even though while I am the one enjoying the outputs, my family has not been entirely left out of the equation. We've had discussions about the science of carbonation and the appropriate technique to generate the proper amount of foam on top of a beverage. This may not be part of the typical remote learning curriculum for most kids, but science can be taught in many practical manners. As our beverage portfolio continues to grow, now with Wild Goose in the fold, I have a bunch more customer spots to try in the coming weeks. More reports will follow. Having covered our 2020 business in my ongoing pandemic customer support activities, it's time to look forward to 2021. In doing so, it is helpful to refer to order and backlog data, which we have shared in the presentation that is available at the investor section of our website. For commercial food service, the positive trajectory continues. After seeing order rates down 22% in Q3, for Q4, we are only down 5%, and this upward trend line has persisted into 2021. The order strength put our year-end backlog up 84% from prior year levels at $238 million. Accordingly, our revenue expectation for Q1 of 2021 is to see modest sequential growth from Q4, which also implies revenue close to prior year levels. I would have hoped to guide to being at least flat to prior year, but supply chain risks are having a somewhat dampening impact on our short-term expectations, and we had some operations disrupted with recent storms, but we are working to safely recover from that. Nonetheless, I still have an optimistic viewpoint at this time. In terms of margins, we do expect to see sequential improvements from Q4 levels and should be at similar levels to prior year profitability in terms of EBITDA percentages. Wrapping up my thoughts on commercial food service, it would not yet be prudent to offer a specific guide on revenue for the full year. We remain encouraged by recent trends in the midterm outlook, considering all the factors benefiting our marketplace. We do expect this could reasonably allow us to reach 2019 profitability levels, meaning delivering above 25% as we progress through 2021, in spite of revenues being below 2019 levels. There are many unknowns, but if the positive trends continue and we successfully manage through and overcome the risks, this is achievable. Residential's growth continues, with Q4 order rates up over 50% from the prior year. In terms of revenue, we clearly expect to have double-digit growth for the first half of the year. Given the many variables and risks, including the strong comparables, I'm not yet comfortable with estimating what growth in the back half of the year could be. Getting a bit more granular, Q1 revenues may be down somewhat from Q4 levels. This is primarily due to three factors. One, the impact of the disposed business. Two, seasonal shifts in product mix, especially in the U.K., has an impact. Lastly, some of our other businesses do see a holiday spike in the fourth quarter. In the production environment, we are focused on ensuring employee safety and managing through labor availability matters, as well as addressing issues from recent weather impacts on operations. This all creates some limitations on us in terms of short-term margin expansion. Nonetheless, we will be at similar levels if not slightly above where we have been in the fourth quarter. For food processing, we enter 2020 with a record backlog and are pleased, given the disruption that impacted this segment during the year, to have exited the year at a relatively similar level. We are positioned well for 2021 as conditions evolve. Q1 revenues will be below Q4 levels, as is the seasonal norm. We do anticipate slight growth over the prior year's first quarter. Margins are typically rather depressed in the beginning of the year. However, we do expect Q1 2021 margins to be well above prior year levels. In summary, modest improvements to start the year with the possibility for a stronger second half. As I wrap up, I want to come back to our people as they make these results happen. We have great teams at Middleby. We faced an incredibly difficult year together, and I know we are all proud of what we have delivered. We look forward to better times in the hopefully not too distant future. With that, we will continue to deliver industry-leading results. Thank you to everyone for working to stay safe, while at the same time continuously demonstrating your dedication, drive, and commitment. A closing shout-out to Dave, one of Purdue University's finest graduates, and he didn't even pay me to drop that in. He's a tremendous engineer, a passionate leader, someone we all trust, and a little-known secret, a pretty decent accountant, too. Dave, I'm so very appreciative of the time and the interest you've taken in me, and in my family as well, to not only ensure my accounting skills are as strong as yours, but to help me learn the industry and grow at Middleby. You've always been someone I could count on to ensure there was room for ice cream after dinner. I could go on and on how great it has been to work with you, to learn from you, and to see what you give others. Your love of the industry, our company, our people, and more importantly, of family, is always inspiring. I've probably taken too long already, so I'll close with a simple thank you, and we'll look forward to a toast with a buttery Chardonnay sometime later. With that, before we turn the call open to questions, I will give it over to you, Dave, for concluding comments. Thanks, Bryan. I will say, as most of the people on the call know and appreciate, we get very organized and disciplined about preparing for these calls. Those last comments were a surprise to me. Thank you, Bryan. We will talk later. Take a second, sorry. I do appreciate having just a couple of minutes to say a couple of things as I transition out of the company and step down as an officer of the company, and I work for the next 10 months on some strategic opportunities that we have, and on an irregular basis, maybe even being on this call. I wanted to take an opportunity to say my appreciation. I would like to start off by congratulating James and Steve for stepping up to an officer role of a global company. They have clearly demonstrated their capacity, their capability, and their leadership skills over many years, and it couldn't be two better leaders to step into those roles, and I'm very excited for Middleby overall. As I've said many times on this call, a lot of Middleby people listen in on this call. They read the document afterwards. I cannot resist sending my appreciation for the hard work of the supply chain, the purchasing, the operations, the engineering, and the sales team of Middleby around the world. Just an outstanding group of people. I love working with them every week. I think I talk to a couple of hundred of them on conference calls and processes and leadership reviews. I'm always amazed by the capability we have embedded in our organization. Clearly, Tim and I have pulled forward some great group presidents, too, in Najib and George and Korey, Jeremy, John. Look at their resumes. I challenge everybody to look at their LinkedIn profiles and be amazed by their capabilities. They're backed up by a group of 30+ country managers, managing directors, presidents, GMs, that are just so capable, so diverse, out-of-the-box thinkers, young, aggressive people, 30+ of them around the world. Just amazing group. I have to say, even though Bryan caught me by surprise, Bryan is just an outstanding Chief Financial Officer. What I love about Bryan is he always gets his hands dirty. We get a little corny about his personal interactions with some of our equipment, but he is a get-your-hands-dirty Chief Financial Officer. The best part about Bryan is he always asks about numbers behind the numbers. That deep understanding of the business makes a difference for all of us. As a fellow officer, Martin Lindsay is just outstanding. I know he doesn't get the credit that a lot of people should based upon his leadership through COVID, was outstanding. His leadership around banking relations are amazing and just a great officer of this company. I have to say, I appreciate the board of directors of Middleby that I've known for 13 years. Challenging, diverse, wise, humble, and personally involved in the business from a personal background with their resumes. Before I get to my last two appreciations, I have to give some credibility. Anytime you go through a transition, you clean out your desk. I was going through my passports, and I was looking at the number of countries that I've worked in, and I got to 70 and stopped counting. The other thing is I have 25 extended year-long work visas in 17 different countries, which was amazing. Then you put that on top of, I've had the opportunity to work directly for, indirectly for, around some of the most transitional, transformational Chief Executive Officers in the industry. From Roger Enrico and Steve Reinemund to the Lindner family, to David Novak, to David Gibbs, to Joseph Han, Sam Su in China, to José Cil, one of the most transformational Chief Executive Officers in the industry. I just wanted to say I appreciate Tim FitzGerald. With that background and that experience I have, Tim is the best Chief Executive Officer in the industry. He is a transformational thinker. He understands technology, he understands the customer, and he understands how to create shareholder value based upon the value of the products we produce, the quality of the products, and the interaction with the end user. There is no better humble, ethical, making other people first Chief Executive Officer in this industry, and just an outstanding friend. We've worked together for 13 years side by side, and just an amazing Chief Executive Officer. My last appreciation is for the analysts on this call. I've been dealing with analysts for as long as I can remember, in trade shows, investor conferences, these earnings calls. Your questions, your tough questions, your questions behind the questions, your questions about our competition, your questions about our customers, they sharpen us. They've made Tim and I and Bryan better leaders. We are more competitive, more capable because of the analysts asking us tough questions during trade shows, walking around, what ifs, how do you look at this? What are you thinking? I really do appreciate the tough questions and the growth that this company has seen and the capabilities this company has seen from the analysts asking us tough questions. I wanted to say thank you to the people on this call. With that, I'm going to turn it right back to the operator for questions. Our first question comes from the line of Mircea Dobre with Baird. Your line is now open. Thank you. Good morning. Dave, congrats to you on a fantastic career, and all the best of luck going forward. You mentioned great folks in Middleby that are listening on the call. Congrats to them as well for the way they managed through 2020. Definitely an unprecedented year for the industry. I guess my first question, Bryan, I appreciate all the context and detail you've provided on commercial food service and all the other segments into Q1. I'm sort of curious here. You're building backlog and demand is getting better. Two things. One, can you maybe parse out how much of this demand improvement is really sort of driven by the end markets, and how much might simply come from different product initiatives that you guys have had through 2020? You've introduced a lot of new product that I'm presuming is starting to result in incremental revenues for you. As you've built up this backlog, how should we think about your ability to convert this backlog? Are there any issues beyond the weather that you mentioned, in terms of supply chain constraints? Should we start to see revenues kind of approximate order intake as we get to Q2 and beyond? Maybe we can start there. Yeah. Certainly, we are seeing adoption of our new products. I would say, especially as I call it, maybe some of the more headline products that have been on pages in our decks, it's a little bit of good news, so-so news. Those are not yet, I'll call it driving what we're, I'll call short-term successes that are in front of us. I'll say that benefit is still to come, and we have a lot of products that are in evaluation and test, and really the revenue contributions are small at this point. The order success and the backlog we are having is from things that have been in our pipeline. I'm not going to say that they're old products. They've been a result of the innovations over the past year or two, but it's about being able to address the customer needs. Again, those headline products will be incremental to that as we progress into second quarter and back half of the year. Now I've lost track of other parts. A little bit, you talked about supply chain challenges and such. We are monitoring supply chain on a daily basis. I'll say fortunately so. We feel very good that we haven't lost any meaningful customer opportunities because of that thus far and feel good about Q1. However, I'm not going to sit here and ignore those factors, certainly things that are kind of in the headlines, whether it be component availability or cost or logistics challenges. Those are real. My margin comments have contemplated those, especially for the next three months out, and they are literally on our radar every day going forward. We're prepared to address them and certainly not trying to downplay them. I want to make sure that I understand the nature of your comment, Bryan. The way I interpreted it, what I heard is that demand continued to improve thus far in Q1 relative to the fourth quarter. From an order intake perspective, my understanding is that you're actually up. Yep to the prior year. You continue to build backlog, which is why you're saying that your revenue might actually be closer to flattish. Do I have that right? Yes. As we look at our order rates, that kind of by quarter on the charts and what we've kind of posted, Q3 order rates were -22%, our revenue was a little better than that. Q4, we just posted a -5% on order rates, and you heard me correctly. We've flipped over to the other side of zero, the good side of it now. That's kind of about taking us to flat for Q1 and with the backlog is the reasons why I'm positive through the first half of the year, and then it's just all the great things hopefully that are happening in the market. Weather's going to get better, vaccinations are going to improve. I'm not going to get over my skis for the back half of the year. That's why, to your point, Q1, let's call it in the neighborhood of flat. Q2, I haven't done the percentage. Q2 last year was obviously a dismal number, so I started to think about things more sequentially. Certainly feel like Q2 could be at or above Q1 levels as we look at the top line. That's a good color. Thank you for that. My final question, we talked about this in prior calls as well. As you're sort of looking at your customer mix, I'm curious of the moving pieces here, QSRs and some of the pizza and fast casual guys versus maybe some of the casual dining and even your institutional exposure, how you kind of see that play out through the year. You sound better about the casual dining component, to me, that's a little bit surprising. You've gone through a quarter with a spike in COVID cases that we've never quite seen before, obviously, a lot of the outdoor dining was closed in areas with cold temperatures. It's a little counter to what I personally expected out of the quarter. Any color there would be helpful. Thank you. I'll turn it over to Steve in a second. Let me clarify. I wouldn't say that I'm banking on casual dining as being an overly strong contributor to where I've made positive comments as we look out. I'm sure Steve will address the areas we've seen strength. It really is continuation from the areas that have been doing well and are accelerating themselves. I think where you're going with casual dining and other stuff really maybe is more about probably more so the back half of the year. I guess Q2 has good weather months in it. Again, we'll see how vaccination. I think casual dining, independents, travel, entertainment are all upsides yet to hit. I'll turn it over to Steve to kind of talk about what we've been feeling and what's coming. Thanks, Bryan. Mig, just to build on that, again, certainly the QSR segment is where we've seen, obviously, let them hold in through the back half of this year. I think what's changing recently for many of these QSRs is really getting back to new builds. That obviously was muted last year, delayed. Many of the QSRs are really saying, "Hey," they're going to be back to 2019 new build levels, if not ahead of 2019 new build levels. I think we're starting to see that in some of our orders to certainly start this year. The other segments, again, we've talked about retail and C-stores continue to be very strong. Expect them to really continue throughout this year. Again, retail is a great pickup, I think, for us just knowing retail was, for Middleby, relatively new in the last two or three years as a segment and having a dedicated team, dedicated products focused on retail. That's a big benefit. As far as that casual dining segment goes, I do think we've seen them hang in there okay, the ones that have adopted things like virtual brands that have allowed them to pivot to kind of new revenue streams. I agree with Bryan, I think it's just a lag behind the other segments. Hopefully, in the back half of the year, you start to see, again, people coming back to in-store dining, vaccinations, weather gets better, and obviously, we could see casual dining really start to pick back up as this year progresses. It's still the QSR, retail, C-store, pizza segments that I think are driving right now, and that certainly continues throughout the year. That's great. Thank you. Thanks, Mig. Thank you. Our next question comes from the line of Todd Brooks with C.L. King & Associates. Your line is now open. Hey, good morning, everybody, and congrats, Dave, and also congrats to Steve and James on your promotions as well. Well deserved. Thank you. Thanks. You're welcome. First question. Bryan, if we could just walk through, the working capital performance was amazing this year, and you qualitatively talked about some of that benefit unwinding as we do recover here. Maybe if we could talk about opportunities and learnings from how efficient you got during the pandemic and how much of that savings generated in 2020 do you see coming back onto the balance sheet in a recovery scenario towards 2019 volumes? Yeah. A lot of that obviously will be volume dependent. I'll say, I do like to think about primarily, AR and inventory, right? Those are the biggest components on our books and it drives a lot. AR, we do a good job of managing AR, and we're also fortunate to have a good credit risk profile, I'd say. The simplistic view for me on AR is that, it's going to move as sales move. We've actually been able to bring down DSO a little bit through this. We had a lot of great programs and relations that we were able to benefit from with our dealers and distributors in supporting them, and again, supporting them in managing our risk. Again, AR is going to move as sales move generally. Inventory has been obviously a very positive area for us in terms of working capital management. I do expect to give back some but not all of that next year. Maybe, I'll say 75% of it goes back because of volume. We have been actively working, especially in CSG, to bring down our inventory levels and really be looking at safety stocks, products we have on hand, and we've talked about sharpening our focus on product mix as well, right? We have scratched some products that are lower profit levels and such. All that ties into the fact that why the full inventory item will not flip back to the balance sheet as improvements in the market happen. Admittedly, right now in residential I would take more inventory if I had it, right? I guess I need to admit to not having been prepared for 50% growth there, right? This is a good problem we're having, and we're continuing to improve our operations and such daily. I guess, to stop rambling, I want to summarize. AR is going to move back as sales move back and inventory we will be able to drive down lower DIOH, especially on the commercial side. That's great. Just a final question. It was good to see in the deck the summary of deals during the year, the six acquisitions. I guess, A, can we talk about, and I don't know if you'll disclose it, but kind of incremental revenue from the class of 2020 from an acquisition standpoint, and any commentary about the M&A pipeline as we're entering the backside of the pandemic would be helpful. My sense is that the differentiation between offerings from companies in commercial food service or food processing or even residential is getting to a greater gap than we've seen in the past. That should be a competitive advantage for Middleby. Thanks. I'll take the first one, and then Bryan can maybe add up the numbers on the second. Certainly acquisitions has always been a core competency of Middleby. We worked really hard throughout the year to get our balance sheet back, hence the financing and as you can see in the deck with the cash flow and availability, we're really well positioned to bring the acquisitions back online and, in fact, have brought the acquisitions back online. You could see, as you referenced there. We've done quite a bit, really including I think about four at the back end of COVID here. We always have a great view of I would say, a strategic pipeline of targets that we have that really add to the long-term value of the company, and we're actively working on those. I'm anticipating that 2021 is going to be back online, and really is already back online. We're pretty excited about the pipeline that we've got going into the year. More and more, we're investing in, I would say, technology companies that cut across all brands. Certainly, historically, we've always gone after key brands and product categories that are new and complementary to us. Really, we're accelerating things, just like you've seen with L2F, Powerhouse Dynamics, that really cut across the platform. Excited about the opportunities there. Yeah. In terms of the numbers, we have disclosed some of these when we made the acquisitions. Wild Goose was around $35, Deutsche was around $40, which shows that as Thor on our product page or United Foodservice was around $10. That's $85 million there. RAM was certainly a smaller one. Bluezone is one with more opportunity. That was more of an investment. We haven't quantified that one for folks. The same thing with Viking. When you put the other ones together, it probably starts getting it to around $90 million. That's very helpful. Thanks for the questions. Yep. Great. Thanks. Thank you. Our next question comes from the line of Saree Boroditsky with Jefferies. Your line is now open. Good morning, and welcome, James and Steve, and congratulations, Steve, on your retirement. You talked about getting to 25% EBITDA margins in commercial foodservice in 2021, despite the lower sales in 2019. Given the structurally higher margins, could you just update us on how you're thinking about the long-term potential for EBITDA margins in this segment? I mean, yeah, I'll say that's an easy question. We've put out the 30% there as the goal, and that still is the goal and still what we're marching towards, right? The hard part of that question is to tell you exactly when that hits, right? It's still just probably a couple of years out. The hardest part for me to get more specific on that is the pace of recovery, right? We probably have debates around the table here whether it's two to three years out or so. Hopefully it's in that, I'll call it small single-digit range of years to get there. We had talked more extensively about margins at some point before COVID and how I'll say our mature cooking businesses were really already at that level, and I'll call it our larger and the kind of the beverage cold side businesses that we had were also there. What we were working on was the continued integration and growth at more of the more recently acquired businesses, both having them mature from a revenue generating wise as well as taking the cost action. COVID obviously gave us a bit of a step back there, but the goal is still the same goal and is certainly extremely achievable in our views. It just became a matter of the timing setback here this year. I'll actually say, I'll put one more a little bit positive spin on it. Nothing like a little bit of hardship to cause you to get a little bit more introspective on things. I think we'll actually get further benefits from all the deep dives and belt-tightening we did on the mature side of things for us. That's helpful. Thank you. Then residential demand has obviously been very strong. Could you just talk about how you're performing relative to the market? What do you think the market share opportunity is? Do you have an estimate for where you are today and where you could go? Thank you. Yeah. I'm not going to really talk about market share, and the market can be defined quite a bit. Obviously, in the appliance area, we are a very small player in an overall industry, but certainly we're touching on that premium side. That being said, we think we have significant opportunity to gain market share over the next several years. The efforts that we've had leading into this year, really over the last several years, and I've talked about it a number of times, whether it's new product, the infrastructure that we built with sales, distribution, service. We talk about the showrooms, which we're just really on the front end of leveraging those, particularly as we go after the designer market, which is one that really we're just starting to touch upon and make investments there. The sales process is changing is true across all of our business segments, but certainly on residential, digital marketing and how we access the end user is evolving. We view that we're really at a great inflection point. We've got a good backdrop at the same time, I mean, we feel pretty good about how we're going to be growing the business over the next several years. What that means in terms of market share, that is hard to measure right now. I would also say that I think the demand for premium products and high technology products is a trend that's increasing over time, and that's where we're investing, and that's where we're well-positioned. We feel pretty solid about where we're at in the market right now. Great. Thanks for taking my questions. Thanks, Saree. Thank you. Our next question comes from the line of Joel Tiss with BMO Capital Markets. Your line is now open. Thank you. Well, first I have to congratulate Dave on the Academy Award nomination there. I know you forgot to thank your mom and dad and your wife, but I'm sure that your exit package probably went up by 10%. I just wonder if you guys. I was thinking about you during that. Oh, yeah. When all the idiot analysts ask their dumb questions. Well, Joel, he had a special closing comment for you at the end of the call, but I think you just blew that. Yeah, we had a number of very positive one-on-ones, Joel. I'm taking my comments off on you. I just wonder if you can talk a little more deeply around the strength in the commercial business or kind of what's driving the backlog. Just a little more granularity. There's been a couple questions around the edges, and I just wondered if we could try to maybe get a little deeper into that. Can I take that one? Yeah, go ahead. Especially since he was picking on me. I'd say two things. First of all, I think Steve did a really good job of talking about the customer and our connectivity with the customer and we're with the customer a lot on new product, speed of service, menu mix, menu flexibility, cost, labor. That's really driven by our technology and both individual technology. I'll put James on the spot here to talk about how technology is getting us in front of the customer in a bunch of different ways, both from our Open Kitchen platform to individual pieces of equipment. That, by the way, goes from foodservice over to residential too. I think there's a connection of technology and backlog and customer-facing capabilities. James, why don't you talk about technology? Yeah, Dave. I think I'm gonna approach it a little bit differently. First thing I wanna talk about is the new Middleby Innovation Kitchens that we just opened. If everybody hasn't gone out there yet, go to www.middleby.com/mik to see all about the new Middleby Innovation Kitchens, which we opened in the Dallas area. It's been about two years in the making. The idea for us was to have a single point of access for our customers and our channel partners, to come and have chef-led demonstrations, to focus our customers and channel partners on all the great innovations that we do day to day at Middleby, from baking to frying, to speed cook, to conveyors, and automation to IoT. All those innovations are on display at the Middleby Innovation Kitchens. Since we've opened the Middleby Innovation Kitchens, in about the last 1.5 months, We've had nine segments tour the Middleby Innovation Kitchens, very high-profile customers. I won't give their names, but they represent QSR, C-store, pizza, ghost kitchens, buying groups, dealers, casual dinings, food service consultants, and even on-premise brewing. We've had just a tremendous amount of volume and great customer interaction through the Middleby Innovation Kitchens. Beyond that, automation continues to be a focal point at Middleby, through our advancements in the high-level user interface that we are developing. Also, the advancements of Open Kitchen, which continues to be the single platform for our customers to really automate their entire restaurant, whether it be HVAC lighting controls, whether it be management reporting, food safety, measurement, HACCP, to equipment connectivity. Open Kitchen truly is the only platform in the industry that brings all that together to allow our customers a single point of basically access to all the data in their kitchen. We're continuing to drive innovations on Open Kitchen, automation, and among other products such as pizza, where we continue great innovations such as the world's largest ventless conveyor oven. Okay. That was my next question, but if you guys are gonna cut us off at exactly at 12:00 P.M., then maybe I'll let someone else ask, and I can ask on a follow-up. Yeah. We'll run a little bit longer, Joel. If you got a follow-up there, please ask. Okay. Yeah. You guys keep mentioning sort of the reinvention of the company, and I wondered, across anybody there, if you could give us a little sense of where you see this industry in five years and kind of what capabilities you've got to build today to get to that eventuality. It's an evolution, we've been investing heavily in technology as well as sales processes, and that's been happening over the last couple of years here. Certainly a lot of the things that James went through. We think our customers are starting to pivot, and a period like we've just been through and still in with COVID, brings a lot of this to light. The automation in a kitchen, how much labor is in a kitchen, flexibility, footprint, and really digital. Digital goes to the power of data as well as automation, right? I think the foodservice industry has probably been a little bit slower to adapt than many others, and I think now is where we see the inflection point of technology really coming into this industry, and hence, why we've been making these investments for a while. This is not new. Frankly, we've been getting on calls talking about how we've been incrementally spending in these areas. Again, buying companies, also automation companies, IoT companies, et cetera, and continue to invest in those platforms which are embedded in our P&Ls. As we're driving profitability, we are taking those dollars and spending some back on these capabilities. I think it goes beyond just the footprint of the kitchen and the equipment we're putting in there. We've also been thinking about, okay, what does that sales process look like? We are moving more and more to ensuring that we can educate our customers, whether that's through a digital sales process, which we've invested heavily in. Also in the last year, our channel partners become incredibly important and more important through that because we really need to have partners that can think about solutions and help us bring solutions to those customers. That is important. Then what James just went through, and he's done a tremendous job building a game-changing asset for the company with the Middleby Innovation Kitchens, where we can really have a hands-on interactive experience to help our customers dream through what the kitchen of the future should look like. We've got so many solutions all in one place so we can really transform that experience. This is a journey that we've been on. It is more real than it has ever been. We will continue to invest in it in an accelerated pace as we go through this year. Certainly, one of the reasons why having James and Steve as part of the team here amongst the broader leadership that we have it's about making things go faster at Middleby. It's a fun time right now as we're seeing a lot of these things come to fruition. Back to your first question, which is what's driving the business, it is some of this. It is also broad-based in nature. We're doing pretty well in a number of segments, and a lot of it is about some of the innovations that we've had over the last couple of years. We feel pretty good that, A, we're doing well in the customers we've always done well with. Some of these products and solutions are also allowing us to step into new market segments where we've been under-penetrated in the past. Do you feel like you're kind of pulling ahead of the competition, like now is the critical time to put the foot on the gas, or it's just the natural evolution of how the business is going? Well, we have been trying to differentiate ourselves, and we've been committed to it for the last couple of years, and again, why we've been making those investments. We hope those investments are starting to pay off now. That is our objective is, again, really to be differentiated and have unique solutions to our customers that really are beyond what others in the industry might have. All right. Thank you very much. Sorry to take up so much time. No, thanks, Joel. Thank you. Our next question comes from the line of Jeff Hammond with KeyBanc Capital Markets. Your line is now open. Hey, good afternoon, guys. Dave, best of luck to you. Thanks. Just a clarification, Bryan, on the commercial foodservice margin comment 2021 versus 2019. Is the thought that for full year 2021, you'd be at 2019 levels, or you'd kind of get there on a run rate in the back half? The hedge answer is get there in the back half. I think we have a decent chance of doing it overall for the year, right? The only reason I hedge there some is the back half of the year and getting that revenue right is hard right now. That is definitely within our sight. I'll put it like that, right? Okay, great. Just as we think about this kind of rebuild and recovery, and certainly, you guys have introduced a lot of products, and there seems to be certainly a focus on technology shift. Just as you look at maybe more QSR, fast casual, doing the new build, and maybe less independent, just how do we think about margin mix within this kind of recovery scenario that you're thinking of? Well, I'll say I'm impressed on what we've been able to do with margins now, and I don't know if you're kind of behind your question implying, like is there lower margin from these bigger customers, right? Our results now speak for themselves, and honestly, I think things just continue to get better from here as we pull back or add more volume back into the industry, right? I'll go back to what my colleagues here have been talking about. Innovation and differentiated products deliver value for our customers, and that impacts what you're seeing now and what I'm talking about coming next, right? To where what's driving our success right now isn't commodity. It's differentiated and high-performing products. One of the things that we focused on coming into this year is having sustainably higher margins at low levels of business. Certainly, we had opportunities, starting with all the acquisitions we've acquired over the last three years. Don't forget that. We've got a slide in the deck there, and it's quite a few, and we've got a pretty core competency of bringing those companies into the fold. That's been a key element. As the organization has grown, we've focused on how do we really leverage synergies and capabilities across the company, which helps us also bring up the margins, but then to that last piece, the mix of product. Again, as we are investing in technologies, we're committed to shifting the mix to those higher-end products, which have a higher ROI for our customers. We're trying to deliver more value. Those are three key elements that we've executed on over the last year. Again, it's always difficult to predict exactly what the margin is going to be, but we're anticipating that's going to show up in 2021, and it is part of that bridge of how do we get the margins to 30% for this business segment in the long term. Okay, great. Thanks so much, guys. Thank you. Our next question comes from the line of Lawrence Tighe De Maria with William Blair. Hi, thanks, good morning, and good luck to everybody. I wanted to ask, you guys mentioned, obviously, you talked about CFS orders improving still in 2021. First question is just to clarify, did December comp up? Can you just give us the comps for January and February, which I assume were up year-over-year? I'm not going to get into months, and we've obviously moved to quarters because of the variability month to month, right? We are comping positive in 2021 through the first two months of the year here, right? There's day-to-day lumpiness, there's week-to-week lumpiness. As you get to bigger periods, it starts to smooth out a little more. Again, the trends have continued in 2021, and we're on the positive side now. We're in green, not red. Okay, thank you. I don't think we talked too much about price cost. Can you talk about price increase, order of magnitude, and is this enough to cover to be of net positive price versus materials for the year, or do we think we still need to readdress at a later date given what's going on with steel prices? Can you just give us a little discussion about that, please? Yeah. We did take pricing, somewhat, I'll call it at the modest levels. Not seeing a lot of that in the Q1 outlook, just because we do have strong backlog, and some of that gets filled at, I'll call it, old prices. I do expect there to be further pricing actions taken this year. To your point, steel and a lot of other areas in our business are seeing inflationary pressures, and we will respond to that accordingly. It certainly, I would say, is not a detriment in Q1, and we're going to take actions to make sure that continues to be the case for the full year. Okay. Yeah, Larry, I would just say that this is a real issue for a lot of companies right now. I'm sure you're hearing it more and more from some of the other companies you cover. Availability of containers, shipping costs, supply shortages, and then just kind of general inflationary pressures, and I'm repeating a little bit of what Bryan says, but this is something that we're managing pretty effectively. We're keenly aware of, and we're being proactive with our thinking about what that means in the second half of the year. I think this is an area that, thanks to David and team, that we've got a really strong competency that probably didn't exist at the level that we have today at Middleby. I don't know, David, if you want to add anything further to I think that with supply chain, a lot of times or with any change, you think it's revolutionary, but it's actually evolutionary. It's been the supply chain team developed two, three, four years ago. We've got a database of suppliers across all the individual brands that we work off of, that we share. On top of that, every week, there's 150 people that go around the world on supply chain and engineering looking at supply chain issues, and it's more than just components. We're looking at container availability, shipping availability, port and dock availability. It's very detailed review. It really comes back to the competency of, do you have a process? Do you have the data? Do you have the people that know what to do? When you look at Middleby across all the brands around the world with the database that we've assembled, with the supplier base that we've assembled that can cross-support, it's an amazing organization of great people that's been developed over the last four years. Relative to the situation, we are really set up well. Okay. Thank you. Good luck, everybody. Thanks, Larry. Thanks, Larry. Thank you. Our next question comes from the line of Tami Zakaria with JP Morgan. Your line is now open. Thanks. Good morning, everyone. Thanks for squeezing me in. Just a follow-up, first of all, on that last question. How much of the Q4 backlog will be filled at new prices? The backlog goes across so many companies. It's really hard to say that specifically. I don't have a point on answer on that one for you. Okay, fair enough. You highlighted alternative protein as a potential bright spot for food processing. Can you elaborate on how Middleby might participate in that growth? I am. Sorry, could you repeat the question? Alternative protein. Sure. You highlighted alternative protein as a potential bright spot for food processing. Can you elaborate on how Middleby might participate in that growth? Okay. It is early stage. Just to be clear, I think by the way, the mature dried meats and maturation business, I think that's probably more impactful to us this year. Obviously, you see a lot of headline news, and including with our QSRs of alternative protein coming on more and more significantly, investments made there. I think that is something that we view as a long-term trend. We do believe it is here to stay. It is not a significant piece of the food processing equipment today. We are, however, uniquely positioned there. It's been something that we've spent time developing products that broadly meet a number of different applications there and do feel like that's an example of a number of trends that we're going after. What positions us that way on it is, I'd say alternative proteins require kind of a combination of technologies that exist across our protein and bakery product lines. That will be good for us. To echo Tim's comments, over the longer term, it's not just about what's being done, called by the new names that are kind of in the headlines every day in it, but also how are some of the more well-established, older line companies thinking about it as well. We have been partners with them for a long time. That's what gives us, again, good vibes on this over a medium-term horizon. Yeah. I've got to say, Bryan, that's right on. The amazing amount of startup chains that we've talked to about alternate proteins, and at times, we introduce them back to our customers on the food processing side that are developing those early on changes, as Tim said. I think it leads right back to what James was talking about in technology. If you get a chance at that Middleby Innovation Kitchens, you'll actually see demonstrations around specifically the question you have. We are well poised on both the food processing side and the commercial kitchen equipment technology side to be a leader in this area as it emerges. That's very helpful. Thank you. I'll pass it on. Very good. Thank you. Our last question comes from the line of Walt Liptak with Seaport. Your line is now open. Hi, guys. Yeah, thanks to everyone. I'll keep it brief because we're kind of long in the call. I wanted to ask one about operating leverage in 2021, and specifically, I don't think we've talked at all about any temporary costs that might be coming back that came out in 2020. Yeah. Many of those costs are backslash coming back in terms of the ones that are, I'll call it, volume dependent. Certainly, our travel costs are still low. We've talked a lot about the Middleby Innovation Kitchens, and there'll be some pivoting, I'll call it, from some of our trade show dollars into that area. I do feel like, I'll call it our Q1 structure, which is embedded in the outlook comments I gave, really reflect the bringing back of what was temporary and the benefit of what was taken out semi-permanently. I only say semi-permanently for two reasons. I hope that we continue to have tremendous growth, and with that will come making some adjustments. Again, it's not a huge number for us, but we really think about it a lot because of the impacts of employee safety and technology, and that's the travel side of things. We're all certainly embracing technology and how we work with our customers. Nonetheless, given the industry we're in, people do like interacting with our equipment, and so do expect that to creep back over time. Hopefully, my comments about where we expect 2021 margins to be versus 2019 capture the fact that a lot of those costs stay out, and that's why we will continue to advance on that margin expansion story. Okay, great. Yeah, I can do the math on the margin discussion. Maybe more specifically in commercial food service, just have you calculated the leverage number, or is there a leverage level that you're thinking about as the market starts to recover or at least your sales start to recover? I'll admit to not knowing exactly how you would be referring to or calculating leverage. Sorry. Maybe we'll need to take that one for a little bit of a sidebar. Okay, sounds great. Thank you. Yep. Thanks, Walt. Thank you. There are no further questions. I will now turn the call back over to management for closing remarks. Okay. Well, thank you very much, everybody, today for joining us on the call, and we look forward to speaking to you next quarter. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.