Welcome to the Middleby Corporation third quarter conference call. With us from management are Chief Executive Officer Tim FitzGerald, Chief Financial Officer Bryan Mittelman, Chief Technology and Operations Officer James K. Pool III, and Chief Commercial Officer Steve Spittle. The call will begin with opening comments from management, and then we will open the lines for questions. Instructions on how to enter the queue will be given at that time. Now I'd like to turn the call over to Tim FitzGerald for opening remarks. Please go ahead, sir. Great. Thank you for joining us today on our third quarter earnings call. As we begin, please note there are slides to accompany this call on the investor page of our website. During the quarter, we continued to build upon the positive momentum across all three of our segments, investing in technology and product innovations, addressing the current dynamic market trends, furthering our strategic sales initiatives, and by expanding our brand portfolio with the recent strategic acquisitions of Novy and Imperial Range. As we invest for the future, we also continue to execute upon our long-term financial goals. For the third quarter, we reported record net sales and earnings. Once again, we posted EBITDA margins at all three of our segments in excess of 20% despite significant headwinds from supply chain challenges. These supply chain challenges meaningfully accelerated during the third quarter, impacting our ability to produce and substantially inflating our material and shipping costs. We've responded quickly, taking multiple price increases in the recent months at each of our three business segments. However, given our record backlog, these price increases are taking longer to realize than in ordinary periods. As a result, the third quarter reflected minimal benefit from our price increases. We will see the impact of both our price increases and continued rising costs in the upcoming quarter. We expect to realize a net price benefit as we enter 2022, which should further improve as we continue throughout next year. While we manage the disruptive impact of near-term supply chain challenges, we remain committed to our long-term profitability targets. As we drive profit improvement through acquisition integration, strategic manufacturing initiatives, and evolving the mix of our product by promoting higher technology solutions that provide greater returns to our customers. Customer demand remained strong in the quarter as our orders continued to outpace shipments. Incoming orders were not only ahead of 2020, but continued to outpace 2019 pre-COVID levels by more than 30%, both for the third quarter and for the full- year. Given the continued order strength, our backlog has grown from $400 million a year ago to $1.2 billion at the end of the third quarter. While this presents substantial operating challenges, it also presents significant visibility and momentum as we exit the current year and move into 2022. As we look toward next year, we are optimistic about the continued market demand and the strong position we hold in each business segment. For our commercial food service business, the restaurant industry is in recovery across all segments. Categories such as casual dining, institutional, and travel and lodging are joining the recovery we've already seen in categories such as quick serve, pizza, and fast casual. More importantly, our customers are looking to make strategic investments in their food service operations, leading to greater acceptance of new technologies. The food service industry is rapidly changing, responding to evolving consumer trends, the emergence of new business models, and with an urgent need to address significant operating challenges, most importantly, the availability of labor. The strategic investments we have made over the past several years and throughout COVID position us at the forefront of an evolving industry. This is evidenced by customer activity we've had at our Middleby Innovation Kitchens. We are experiencing increased engagement on our latest technologies, offering labor savings automation, greater speed of service, menu flexibility, and a reduced operating footprint. We're excited about the pipeline developing with new customers and with our latest product launches. At our residential business, new home starts continue to be robust while existing home sales also remain strong and well ahead of 2019 pre-COVID levels. These favorable housing dynamics, along with increased time spent at home, is supporting the design and build of new kitchens and remodels. These conditions support a favorable backdrop to our business carrying into 2022. In the third quarter, we were excited to have debuted our residential showroom in Dallas. This showroom is connected to our Middleby Innovation Kitchens, demonstrating the crossover of product and innovation between our commercial and residential businesses and bringing to life our differentiated ability to offer professional restaurant innovations in the home. Our showrooms are proving to be an outstanding investment and strategic asset. We are increasing our engagement with end users, dealer partners, and designers. We're expanding our events, training support programs, and marketing from these showrooms, further increasing the awareness and demand for our premium portfolio of brands. At Food Processing, the effect of COVID and the related travel restrictions that has impacted demonstrations, installations, and the timing of large projects is beginning to subside, providing for an expected improvement to the operating environment as we begin next year. Despite the operating challenges encountered during the year, demand has proven to be strong as our food processing customers are facing the challenges of labor, rising food costs, safety concerns, and sustainability. We are positioned to address these demands with our many new product innovations and full line solutions. Our entry and strategic investment into areas such as bacon, dried meats, pet foods, and alternative protein is also paying off, and we're increasing our available solutions in these growing categories. Now I'll pass the call over to James to spotlight one of our many recent product innovations highlighted in our investor slides. Thanks, Tim. It's not every day when advancements come to griddling technology, but with 11 patents pending, I'm excited to share with you the latest development from Taylor for 2022, the Taylor NextGen Grill. This product delivers precisely on what the industry needs, automation and labor savings. The next-gen griddle is a great example of how embedded automation can augment traditional technologies to improve speed, throughput, and quality while reducing the amount of labor and skill required to operate the griddle. Compared to other griddles, the next-generation grill seems a little bit non-traditional. This is because it's the first of its kind to vertically adjust the bottom platen to the food once the top platen closes. A true innovation that gives the griddle a superior advantage over other griddles that attempt to continuously adjust the top platen to a stationary bottom platen. Top-adjusting platens struggle as the amount of torque and accuracy required to achieve this task is beyond their current mechanics. The last slide in the deck is a summary of the features and benefits of the double-sided grill. Having worked hands-on with the griddle for the past week at the Middleby Innovation Kitchens, I can say that there's nothing like it on the market today. With a single touch of a button, the griddle can execute a simple or a complex multi-step cooking profile that is designed to accelerate and optimize cooking from the vertically opposed platens, all while continuously adjusting the bottom platen to account for the food's ever-changing properties, thus ensuring the desired compression is maintained during the cook. This is a terrific product introduction for Middleby in 2022 and is on full display at the MIK. Bryan, over to you. Thanks, James. I think you forgot to mention how delicious and juicy the burgers are that were coming off of it. We'll save that for other times. For the third quarter, we generated record results with revenue of over $817 million and adjusted EBITDA of over $172 million. GAAP earnings per share were $3.09 and included the net benefit of $77 million from the deal termination fee we received. Adjusted EPS, which excludes the deal fee impact and also 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 $1.92. The negative impact from acquisitions was $0.05 for the quarter. Operationally, in spite of the mounting supply chain challenges, it was another strong quarter for us. Robustness in orders persists. We again exceeded $1 billion for the quarter. For revenue on a year-over-year basis, we grew 29% or 22% organically as we continue to benefit from improving conditions in commercial food service, which is now ahead of 2019 on an organic basis, and robust demand in residential as well as food processing. We continue to generate strong cash flows. Our profitability remained solid. We delivered 21% adjusted EBITDA overall, an increase over the prior year level. Total company adjusted EBITDA at $172 million, as I mentioned. This represents approximately 36% growth from the prior year. We are consistently growing our bottom line faster than our top line, even while we continue to make meaningful investments in technology initiatives. Commercial food service revenues globally were up 32% organically and was fairly even between the North American and international markets. The adjusted EBITDA margin was 24.5%, an increase of approximately 210 basis points from the comparable prior year period. By the way, all the margin values I will discuss are on an organic basis as well, meaning excluding any acquisitions and FX impacts. In residential, we saw revenue up 14%, with international growth at nearly 45%, including the impact of an acquisition. Strong demand persists across all our major product areas. The adjusted EBITDA margin was 21%, an increase of over 230 basis points from the comparable prior year period. In food processing, revenues increased approximately 1%, and the adjusted EBITDA margin was 22%. Our operating cash flows were nearly $174 million. When excluding the benefit of the termination fee, net of expenses and taxes, we still generated nearly $100 million. Our free cash flows were over 90% of net income for the quarter. The current business environment is also impacting our working capital levels, which increased $80 million during the quarter. Our total leverage ratio is 2.4 x, while our covenant limit is 5.5 x. We have over $2.3 billion of current borrowing capacity. We refinanced our debt last month, which provides us increased financial flexibility and extends the credit facility's maturity date out to October of 2026. The facility size has been increased from $3.1 billion-$4.5 billion, subject to an increased secured leverage covenant of 4.25 x pro forma EBITDA. Our total leverage covenant is unchanged at 5.5 x and thus would allow for up to $2.3 billion of additional borrowings currently. These are really large numbers. I'd like to talk about some smaller numbers, actually much smaller numbers, that are also very important and that I found quite interesting. 199 is where I will start. You can come to the MIC and meet our Q Grader, Jennifer, which means her knowledge of all things coffee is off the charts. Besides learning about our automated brewing systems from Concordia and how you will be delighted with our Synesso machines, you can learn about beans, roasting, grinding, brewing, and so much more. Also, the perfect cup of coffee is brewed at 199 degrees. Getting even smaller now, 60. The countertop ventless Mini Combi by Blodgett is an incredible oven. Chef April will impress you with the seemingly unlimited ways this truly unique piece of equipment can make any kitchen more efficient. With a small footprint, it can be placed anywhere as it is ventless. I do have a fondness for breakfast egg sandwiches, so I was amazed to learn that this powerhouse can cook 60 eggs at one time. Lastly, two, in a brief discussion of beer. Two is the number of brewing divisions we have, SS Brewtech and Deutsche. Two is also the number of canning and bottling brands we have with Wild Goose and Inline Filling Systems. It is also interesting for another reason. At the MIC, you can meet our brewer extraordinaire, Brad. Not only can you see and taste what he has concocted, but you can tap into his vessels of knowledge as he personally built systems and has run breweries. He is one more example of someone whose experience and passion will certainly impress. One tidbit I came away with, there are truly only two types of beers, ales and lagers. For those looking to learn more, Brad is ready to educate you too. Now, let me get back to some bigger numbers, our order and backlog data. We've again shared details in the presentation that is available at the investor section of our website. We will share this information through our fourth quarter reporting, but may cease to do so over 2022. Commercial food service order growth for the third quarter over 2019 was again 30%. Residential's order intake was strong at 34%, and food processing was up 45%. Given these order rates and the supply chain challenges that limited our ability to generate higher revenue levels, our backlogs continue to grow, up 19% from the end of Q2 and more than double where they were at the beginning of the year. These trends have persisted in October as well. I will reiterate what I shared last quarter as we look forward, that we are keeping our expectations at modest levels for the near term, given the supply chain limitations on significantly expanding revenue levels. We are obviously seeing great order trends and the building acceptance of our new products, and we continue to invest in innovation, automation, and robotics. As we look to Q4, when considering our backlog, pricing actions, and inflationary pressures, we expect nominal top-line growth sequentially from Q3 and margins likely at levels consistent with Q3 before starting to see margin expansion in Q1 of 2022, and likely then growing into and through Q2 as well. We invested not only in the MIC, but also in four residential experience centers, and within food processing, we also have our Bakery Innovation Center in Dallas and our Protein Innovation Center just outside Chicago. I always look forward to trips to any of these spots, and not just because of the great food and drink I get to enjoy while there. Witnessing how we serve our customers, the passion and the knowledge of all that represent our brands is amazing. The energy one feels as you witness customers, designers, consultants, or other partners interacting with our people and products is powerful. Our products, innovations, and our people will continue to deliver solutions that will drive growth for years to come. Thanks. That concludes all our comments for today. Operator, if you can now open up the line for questions. Thank you. At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. Again, that is star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. We have our first question coming from the line of Saree Boroditsky with Jefferies. Your line is open. Good morning. Thanks for taking my question. Just given the strong backlog figures, could you help quantify the impact of the supply chain in the quarter on sales? Are you seeing customers place orders earlier than usual, given the longer lead times? Hi, Saree. It's hard to quantify, honestly. I mean, obviously, we're very restrained in what we can ship, how much more we can ship. I mean, obviously, the backlog is up, you know, 30%, more than what we're shipping. You know, I think if we had unconstrained supply chain and labor issues, you know, we would be shipping, frankly, that much more. You know, I think that's probably about all I can say to quantify. I think more importantly, you know, we're trying to build capacity as we go into next year. I mean, the supply chain challenges continue to be very dynamic. We have a phenomenal supply chain team around the company. They're working every day to secure availability, so we can deliver, yeah, you know, to our customers, and we're trying to increase that as we move into next year. Great. Thanks. You talked about some of the investments you're making in automation, especially in commercial food service. Could you quantify that spend and how we should think about, you know, that, those costs going forward? I'll let Bryan maybe touch on that from a numbers standpoint. I mean, I just think, you know, you heard in our comments, we talk about a lot. You know, we're very committed to investing for growth in the future. I mean, we're doing that with investments in technology, but certainly with our sales initiatives as well, which, you know, certainly there's a lot we're doing on the digital front, you know, as well, and investing in our channels and channel partners. But kind of the hands-on experience is really a critical one as well. So that's been a very significant commitment that we've made, and that's been increasing as we've been going through the year, and that's kind of, you know, fully reflected in the third quarter. Saree, this is Bryan. You know, in past quarters, you know, we have talked about a level of spending, you know, we've had on, you know, technology, including automation, and that has not, you know, diminished. You know, I also think it's important that as, you know, you think about automation, you know, it's not just you know, robotics and the like, but it's, you know, like products that, you know, James has talked about the NextGen grill. It's, you know, products like the PLEXOR that we highlighted, you know, last quarter. Beyond the numbers I've talked about before, I'll call it within our, you know, day-to-day, you know, R&D, you know, run rates, we're always developing, you know, new products. That's why, you know, as I think you think about the spend, you know, it's what we've quoted before, plus additional amounts that, again, are embedded in what we're doing, you know, across all our businesses, you know, to bring out that new innovation. You know, if you follow us, again, you can, you know, on social media, you can see, you know, our robots and robotic solutions in action. Again, you know, automation is more than that. It's, you know, all the things, you know, that James has really been talking about on this call and prior calls as well. I just, you know, we've referenced $5 million per quarter, $20 million plus per year of incremental R&D spend. We do have a multimillion-dollar investment in sales initiatives as well. I just maybe call that out because I think those are exclusive items there. That is an investment that we, again, you'll see is running through our P&L. It's actually been building over the last couple of years as we're thinking about where we wanna be in two, three years out from now. I appreciate the color. Thanks, guys. Congratulations on the quarter. Thanks, Saree. Thank you. We have our next question coming from the line of Joel Tiss with BMO. Your line is open. Hey, guys. How's it going? Morning. Morning, Joel. The first one maybe is a James question, I'm not sure. Is there any way for you to give us a sense of how far away from the level of what the customers want in terms of automation? Like where is the industry, or where are you guys versus what the customers are asking for? And any way to give us a sense of what you're positioning, you feel like you're way ahead of everyone else, or you're keeping pace or any characterization. Yeah. I think right now you've got kind of two types of customers. You've got customers that are, you know, actively adopting our embedded automation, you know, today, every day, the products like the PLEXOR, the products like the Taylor NextGen Grill, as we see that, you know, in our backlog numbers. And then you have, you know, customers that are looking beyond embedded automation and looking for what we'll call kind of true robotic automation that they're looking to deploy in the kitchens. You know, I think we are right on pace, maybe outpacing the market with our FryBot and PizzaBot solutions that we're, you know, bringing to bear on the industry. For all the interactions that we've had with our customers at the Middleby Innovation Kitchens that have seen these technologies, they seem to be, you know, in line with their expectations of what they're looking to automate within their space. A bigger picture question in terms of acquisitions. Are there larger acquisitions available? More around your focus, you're more focused on technology, or is it still kind of building out the product lines and filling in some areas where there's exciting growth? Yeah. I would say it's a bit of both. You know, I mean, obviously, we've continued to be very active over the last several years. The company, you know, expands. You know, we're really focused on continuing to build on our core business, the three different segments. You know, you've seen us enter into adjacent categories, you know, such as beverage, where we've built a leading platform. You know, we're acquiring technologies that really help us kind of advance all the, you know, the companies in the group. Certainly, our automation division such as L2F is a great example. Powerhouse Dynamics with our Open Kitchen launch, where we've kind of become the, you know, we're leading the IoT charge, and that's really coming across all of our brands. I mean, I think, you know, those are all key areas. Investments in international is another one as well, you know, a third of our business, so that's north of $1 billion today, you know, outside of the U.S. In terms of size, I mean, they're all shapes and sizes. You can see we do large acquisitions, we do small acquisitions. As Middleby grows, that gives us the ability to actually go after some bigger fish out there, which you've seen, you know, sizes of acquisitions increase over time. There's a lot of great ideas in the pipeline that are very strategic, and certainly you know the current market we're you know as active as ever in terms of you know ideas and things that we're pursuing. That's great. The last one from me. Can you just give us a little characterization of some of the end markets that may be lagging? What I'm thinking in the back of my mind is more like a slingshot into 2023, and maybe like, hotels, airports, cafeterias, places like that. Is there enough sorta, you know, underperformance in some key end markets still? Not from you guys, just from, you know, lack of demand still being a little bit weak that we could really see kinda longer term, you know what I mean, like 2023 and 2024, we can see those end markets come back and really add a lot of momentum to what you guys are already doing? Yeah. I wanna make a quick comment, and I'm gonna pass it over to Steve here. Just the one comment is, you know, obviously, there's a lot of disruption and, you know, a lot of dynamics that are driving activity in the near term, and as you go across the different segments that are at different stages. I mean, I think we're pretty excited about what the outlook is over the long term. Despite, you know, the fact that we've had some pretty good orders here, in the near term, I mean, there really is a lot of trends that are driving longer term growth. Those are obviously the things that we were positioning for going into COVID, which COVID is, you know, accelerating a lot of those trends. I mean, I think that really does set the backdrop for kind of a longer term period in the commercial foodservice industry. Maybe kind of digging into some of the different segments. Yeah, Joel. Yeah, I would just say again, if you think of, you know, our customers in groupings of how they've gone through the last, call it, 18 months going through COVID, you know, the group that has certainly, again, done the best and continues to grow will certainly continue to grow into next year, you know, is the QSR, fast casual, pizza, retail, C-store group. I mean, that's the group that's, you know, doing, you know, record new builds on their stores right now, and they've given us a lot of visibility certainly into next year and I think have some aggressive growth plans. That's kind of group number one, which we've done before. I think the group after that, which probably is getting more into what you're referring to, Joel. You certainly are into more casual dining and independent restaurants. I think they're certainly ahead of where they were kind of pre-COVID. They're still lagging that first group. This group, I think you're seeing a lot more replacement business, right? They're not opening as many new locations. They're getting the locations that were either shut down or harder hit back up and running, and you're seeing replacement business from that segment. I think the last group, again, that you're probably referring to, you're into travel, leisure, healthcare, institutional segments. I think again they're trending positive. They're just lagging those first two groups. I would support your point of that third group certainly has runway over the next 12-18 months as they come back. I really think all three segments are trending positively. It's just kind of a measure of magnitude as to where they are in that recovery cycle, if that makes sense. That, that's great. Thank you so much. Yeah. Thanks, Joel. Thanks, Joel. Thank you. Thank you. We have our next question coming from the line of Larry De Maria with William Blair. Your line is open. Hi. Thanks. Good morning, everybody. Hey, Larry. Hey, guys. As it relates to the $1.2 billion backlog, I know you've addressed this in prior calls, but can you discuss the timing on how long that's gonna convert and if you're repricing any of it? Because obviously, you seem pretty confident that price cost gets better in 1Q. But I seem to recall you had some orders into the spring for, you know, for quite a while now, even maybe a year by the time they hit. So, you know, I'm trying to understand the confidence and, obviously, the price cost getting better and whether we've repriced any of the orders out there. We are not generally repricing the orders. I mean, I think we've kind of taken the approach that we wanna try to be do right by our customers and kind of make our way through and manage as best we can, kind of pulling the levers, you know, internally so we're not disrupting our end users, particularly in markets such as residential, you know, where you've got end consumers that have been waiting for their products for a while. Hence, that is the headwind, right? I mean, that is what showed up in the third quarter margins. you know, the price increases that we have, you know, taken, I mean, as we bleed off the backlog, it does roll on with, you know, with the new pricing. It's not like there's a magic line, right? Because you've got, you know, 100 different companies within Middleby. I think we're all, you know, fairly synchronized in, you know, in pricing, but people have different backlogs. It kind of scales in, you know, I would say kind of a increasing basis as we start in the fourth quarter and, you know, and roll through sometime in the second quarter of next year. Okay. Thanks. Secondly, you know, I don't think this has come up before, but there's an awful lot of articles and things around the Taylor ice cream machines and the reliability. Can you give us a handle on what's going on with them and maybe how much of a positive impact to Middleby, the parts and service business of Taylor is? 'Cause there seem to be a lot of reliability issues, and how you're addressing all that. Thank you. Yeah. There is a lot out there. I would say, first of all, people love their ice cream from the Taylor machine, you know, hence one of the reasons it gets spotlighted so much. It's a very critical piece of equipment. It drives a lot of, you know, revenue and returning customers, you know, to our restaurant operations. You know, social media is, you know, a great thing, and not everything in social media is, you know, 100% newsworthy as well. I mean, I would say that, you know, a lot of the things that you see out there, you know, are kind of hyped to a certain extent. I mean, it is certainly a technical piece of equipment. We've got a great service organization that keeps the equipment up and running. There's a lot to do with cleaning cycles, which sometimes I would say more often than not, when there's complaints out there, it's actually that the equipment's going through a cleaning cycle 'cause it, you know, as you might Think about, you know, food safety is a big, you know, element when you're dealing with a piece of equipment like that. I think you know we're doing a lot using technology actually with IoT and kind of our next generation pieces of equipment to ensure that equipment is being cleaned at the proper times kind of thinking about preventive maintenance in equipment like that, so people know where we're in an operating cycle and so forth. You know, I mean, I think it's probably a lot of the news out there is really you know, maybe a little bit misleading. I think we're also, at the same time, doing everything we can do to make sure that it, you know, our piece of equipment, which is highly core to our customers, really has the best technology in there, so it's kind of, you know, maximizing the uptime of that piece of equipment. Okay, thank you. Again, in order to ask a question, simply press star then the number one on your telephone keypad. That is star then the number one on your telephone keypad. We have our next question coming from the line of Jeff Hammond with KeyBanc. Your line is open. Hey, good morning, guys. Morning, Jeff. Morning. Morning. I know you kinda were getting away from guidance, but you did kinda give us the update kinda mid-year around the 730 adjusted EBITDA. It seems like the revenues are kinda falling in line, but you know, there's some headwinds on the cost side, and I just don't know if you can frame you know, or quantify those headwinds. It looks like you know, certainly price cost is an issue, and then it looks like the corporate costs, maybe some deal costs in there you know, are a headwind as well. Yeah. I mean, I think if you look at, you know, the EBITDA, you know, reconciliation, you know, we have certainly, you know, identified the, you know, the benefit and cost specific to the large deal, you know, that, you know, that didn't happen, you know, this year. You know, obviously, you know, we've posted $520 million of EBITDA, you know, year- to- date for this year. I'll leave it up to, you know, you and other analysts and investors and the like, you know, to plot out, you know, what Q4 can look like, you know, vis-a-vis, you know, what we did in Q3. Obviously, you know, there's the difference between $730 million and $520 million is $210 million. You know, that seems like a large number given where we currently are today. You know, I think as you noted, you know, supply chain and, you know, in price costs are obviously the, you know, the factors that we're actively addressing. I think, you know, I gave some commentary as to how we think that will, you know, continue to improve, you know, starting the beginning of next year and then, you know, ramping up during the course of 2022. Okay. Very helpful. Can you give us what pricing was in third quarter? Then as you think of, you know, all these additional pricing actions, you know, what you know, based on what you've announced, what you think the wraparound pricing is into 2022? Yeah. Steve, why don't you go ahead? I'll just maybe highlight kind of the cadence of the pricing recently in the last few months. Again, 100 brands, but you know, it's a little bit different across the portfolio and customer base. For the most part, you know, we took pricing in August across all of our brands, and then we just recently took another round of pricing that went into effect November first. I would say from a color standpoint, you know, the November increase was a bigger increase than the August increase. In terms of how we would think about when that pricing starts to come through, I think the way I would think about it is the August pricing that went into effect, you'd start to see come through in the first quarter. I think the November increase that just went into effect, you would start to see come through in the second quarter, if that helps answer the question. Okay. Yeah. That's perfect. Then just on, you know, food processing was a lot lighter, and I just didn't know if there's anything unique there, you know, a big shipment that got delayed or, you know, or any other kind of noise around food processing. No, I wouldn't say there's you know any noise there. I mean, we did you know note coming out of you know the Q2 release that as we looked at you know kind of timing of deliveries and the work that Q3 was going you know to see a dip. We expect you know Q4 to move up you know from here. But you know the orders have been strong here. You know the backlog is at you know record levels for this you know business you know as we sit here today. We still think the outlook is very strong here. Again you know the demand factors have been coming through. I think as we you know went back. I gotta think how long we've been living here through the COVID here. If we go back, you know, six or nine months, you know, we are certainly talking a lot about, you know, customer challenges and in getting to see us and evaluate, you know, equipment and the like. That has not, you know, completely abated, especially since this really is a dynamic international business. It has been improving. You know, the trends here, and again, as you can, you know, see on the orders in backlog, is, you know, encouraging and positive for this business, just like the other two segments. Okay, great. Appreciate it. Yeah. Thank you. We have our next question coming from the line of Tim Thein with Citigroup. Your line is open. Thanks. Good morning. Yes, maybe just the first question is just as it pertains to kind of any ways to monitor the quality of the backlog. I was just curious as to, you know, this risk around double or triple ordering given the, you know, pretty unique backdrop we're in from the standpoint of the magnitude of the price increases and the long lead time. So I'm just curious, do you think that's much of a risk that we should be, you know, thinking about, or is it not something that's on your radar? If you're talking about risk of order cancellations, I don't think that is much of a risk. I think everybody's gonna be battling, frankly, for supply as we go through the, you know, the front of next year. It doesn't mean that there won't be some here or there. I mean, I think, you know, by and large, you know, that's gonna be a pretty solid backlog. Got it. Okay. In terms of pricing, I mean, I think, you know, I mean, obviously, the quality of the pricing of the backlog is improving as we go quarter by quarter. I think the other thing I just kind of throw up there, which is something that we're very focused on near term and longer term, is the quality of the mix of the backlog, right? I mean, certainly, you know, that was an area that we were focused on, even coming into COVID. You hear, you know, through our discussion about technology and things that the customers are thinking about, you know, today, you know, we're starting to see more and more, you know, development of some of these new product launches that really are addressing, you know, what, you know, what I talked about, labor, speed of service, et cetera. That is also something to kind of keep in the back of your mind, and we'll certainly be driving that next year. Yeah. Yeah, that's interesting, Tim. You know, obviously that issue around labor costs and availability, I mean, it's coming up on every restaurant company's calls here in the quarter. You know, looking for ways to save labor and automate. You know, obviously those decisions don't get made overnight, and I would guess there can be kind of a long runway. You know, how do you think about it? I mean, is there a way to quantify what that opportunity could mean to either, you know, Middleby or just industry revenue potential, just, you know, assuming this issue continues and persists, and you do see that greater kind of trend towards, again, automation in the kitchen? I'm sure it's difficult to kind of pinpoint, but maybe you just speak to what we're looking at or what we're kind of thinking about in terms of potential opportunities for, again, either Middleby and/or the industry. Yeah. I mean, I think this is one of the things that gets us excited, right? I mean, I think we've been pushing innovation for, you know, a while and making incremental investments in it. You know, that is where, you know, we see the opportunities in the industry and some of the things that are gonna drive growth in the longer run. We think it is also one of the things that is gonna further differentiate Middleby as we go, you know, through the next, you know, handful of years, those, you know, investments that we have made. I think we're still at the, you know, early stages of it. I think it does take a while for customers to adopt technologies, but those decisions are now getting compressed, right? Like, I mean, I think given that the dynamics that our customers are facing, which are in some ways in crisis mode for them, right? Like, if you cannot get labor, how are you gonna think? You know, that's priority one. A, they're engaging different, they're looking for different solutions, their operating models are changing, and that is shortening you know, the periods that they would typically go through to adopt you know, technology. I think that is kind of the you know, the period that we're in, and still I would say at the early stages of. I mean, I think the next couple of years will be pretty exciting for us as we go through that. I would say, you know, we talk about it a lot, the engagement that we have at the innovation center. I mean, I think that is not, you know, us just really talking about it. I mean, that has really been very hands-on. You know, the innovation center's really been open for, you know, a relatively short, you know, period of time, two to three quarters. I'll just, you know, ask James to maybe give a little bit of flavor who's come through. I mean, I think, you know, we've been very pleased with that investment because it really is, you know, presenting an area where we can demonstrate and engage on all this, and our customers are engaging on it, right? Like, we're not, you know, begging people to come in w e're pretty well booked. Yeah. I think the demand to come to the MIC has just exceeded everybody's expectations around the table. I think as it relates to customers that have come in, you know, Steve rattled off the segments earlier. I think every segment that Steve rattled off, from hotels to C-stores to fast casual to casual dining to fine dining, have been through the doors at the MIC. We do a fairly good job of tracking the traffic through the Innovation Kitchens. To date, we've had probably 1,300 people through the Innovation Kitchens. Representing about 160 different customers from, you know, mom and pop all the way up to, you know, the largest, you know, chains in the industry. At the Innovation Kitchens, we have, you know, all of our great new automation on display in the automation pod, which is featuring the FryBot, PizzaBot, but also, as we talk about, you know, how the industry is trying to solve for, you know, labor through the adaptation of automation. We have all of our great embedded automation at the Innovation Kitchen, which are, you know, great products because they are the higher margined, you know, products that we are driving our customers to. We also have, you know, our full digital IoT complement with Open Kitchen, you know, on display, which is garnering a tremendous amount of traction given the ability to automate the front of the house to the middle of the house to the back of the house. I don't want to say they're beating down our doors, but it's close to it. We're excited and we staffed up to manage the traffic. Very good. Thank you. If anyone wants to ask a question or follow up, simply press star then one on your telephone keypad. We have our next question coming from the line of Walt Liptak with Seaport. Your line is open. Hi. Good morning, guys. Morning. Morning, Walt. I wanted to ask a follow-up on the channel inventory. It sounds like there's not a whole lot of channel build. You know, fourth quarters I think in the past had been periods where there were sort of true up on volume discounts and rebates and things like that. I wondered if there's anything like that, you know, like, you know, rebate payments or anything that flows through in the fourth quarter or any true ups to get to kind of target volume levels with the channel partners. Yeah. Hey, Walt, it's Steve. So yes, I would agree with you in kind of quote-unquote "a normal year," you would definitely see that dynamic in the fourth quarter with your channel partners, you know, chasing your year-end incentives. Obviously, we are operating in a not normal dynamic, so that will not happen this year for a number of reasons. I mean, there's very little inventory in the channel, so I guess let's start there. That's kind of your first question. I just think the dynamic between order placement, lead time, supply chain, when you're actually getting your equipment being so dynamic right now, that really makes that kind of fourth quarter push that you would normally see in a year pretty much go out the window at this point. You know, we've also been very focused, frankly, on not doing any type of discounting, you know, that we may have in the past, you know, to drive a year-end, you know, deal like that. It's a very different year, I guess, to answer your question, that I do not see that dynamic from prior years taking place this year and probably won't be taking place for a while, if not, you know, going away for a long time. Okay, great. Then the last one, you know, I wonder if you just comment on how your deal funnel is looking, you know, how competitive is the market valuations, things like that. Hey, Walt, it's Tim again. I touched on that a little bit with question that Joel had. I mean, I just kind of repeat, you know, we never run out of ideas here. Our challenge is always too many ideas. The funnel's been, you know, pretty active. There's been a lot going on just because I think, a, you know, concern about, you know, taxes as well as kind of all the dynamics that are happening in all the, you know, the industries. We're pretty well positioned from a deal pipeline, kind of consistent with the last 20 years and well-positioned from a balance sheet standpoint as well. Obviously, Bryan talked about, you know, our financing, and certainly we were pleased, and the team did a great job of upsizing our, you know, credit facility that gives us a little bit more dry powder as we roll into next year as well. Okay, great. Thank you. Thanks. That is all the questions we have today. I'd like to turn the call back over to management for any closing comments. Okay. Thanks, everybody, for joining the call today, and we look forward to speaking with you on the next quarter. This concludes today's conference call. Thank you for participating. You may now disconnect.