Good day, ladies and gentlemen. Thank you for joining us for the Middleby Corporation fourth quarter 2021 earnings conference call. With us today from management are Tim FitzGerald, CEO, Bryan Mittelman, CFO, James Pool, Chief Technology and Operations Officer, and Steve Spittle, Chief Commercial Officer. We will begin the call with commentary from management and then open the lines for Q&A. Instructions on how to get in the queue will be given at that time. Now I would like to turn the call over to Mr. FitzGerald for his opening comments. Please go ahead, sir. Thank you for joining us today on our fourth quarter earnings call. As we begin, please note there are slides to accompany this call on the investor page of our website. I'm proud of the results our team delivered to finish the year. Financially, we posted all-time records in revenues and earnings for 2021, returning us to our trend of consistent growth following the pandemic year of 2020. I'm particularly proud of the effort it took to deliver those results. While the effects of COVID have continued, we have also faced the challenges of inflationary pressures, along with the extraordinary supply chain disruptions that have impacted our business on a daily basis. Our Middleby teams have made a tremendous effort in 2021 to navigate these challenges and strive to do the best every day for our customers. Thank you to all our team members across Middleby for these efforts and all that you delivered in 2021. We are in exciting times for the food service industry as customers are looking for new solutions to new challenges. Labor availability, rising food costs, rapidly changing consumer trends, the increased focus on sustainability and an evolving digital world all present a changing landscape and future opportunities for our business, and we are investing for this future. In 2021, we have had many new innovative product launches addressing the evolving needs of our customers. Some of these launches we have previewed in prior quarter calls, such as our next-gen Taylor automated grill, the PLEXOR rapid cook platform, and the Alkar high-speed oven with TurboChef technology for food processing operations. In 2021, we've also significantly progressed company-wide technology initiatives focused on controls, automation, and our Open Kitchen IoT platform. These strategic investments will benefit all three of our food service businesses and uniquely position Middleby to support the growing demand for minimized labor, operational efficiency, and utilizing data in the kitchen. As we bring new technologies to market, it is more important than ever to evolve our engagement with our customers to educate, demonstrate, and validate the operational benefits of these solutions. The investments we have made in our innovation centers supporting all three of our segments are providing to be invaluable resources and enabling us to accelerate the introduction of our latest innovations into the marketplace. Despite COVID, in 2021 we have had a record number of hands-on engagements with customers and channel partners. In 2021, we also made great strides progressing our digital strategies to increase awareness for our brands, products, and latest innovations. Our investments in digital marketing and sales tools are allowing us to reach new customers, rapidly educate our sales partners, and expand interest for the many solutions across our Middleby brands. In 2021, we also continued our long-standing track record of strategic acquisitions, building upon our three industry-leading platforms. We furthered our commercial food service platform with the addition of Imperial Range, a leading brand of cooking equipment, and Newco, a highly innovative dispensing technology bolstering our growing beverage platform. We furthered our automation initiatives, investing in Productive Robotics, supporting the launch of our FryBot and PizzaBot solutions. We added four new exciting brands to our residential platform, including Novy, Kamado Joe, Masterbuilt, and Char-Griller, expanding both our indoor and outdoor offerings while almost doubling the size of our residential business. Operationally, we remained focused on delivering for our customers. We entered the year with a record backlog and continued supply chain challenges. To address this, we invested in inventory, people, manufacturing equipment, and facility expansions. Our supply chain teams continue to work actively to minimize disruption and increase supply. It remains difficult to predict the cadence of our increase in production capacity, but we expect consistent improvement as we progress through this year. While we address the challenges of the current operating environment, we continue to execute on the initiatives to expand margins and remain committed to our long-term profitability goals. We are pleased with the strong levels of profitability we achieved across all three of our business segments this year as we navigated the dynamics of the current inflationary environment. We continue to progress our initiatives to realize platform synergies and evolve our portfolio of sales as we shift mix to higher technology offerings. As we look forward, we're optimistic about the landscape for our markets in the year ahead. The restaurant industry is in recovery. Categories such as casual dining, institutional, and travel and lodging are joining the recovery we have seen in categories such as quick serve, pizza, and fast casual. Our customers in all segments are making strategic investments in their food service operations like never before. At our residential business, both new home starts and existing home sales continue to be robust and well ahead of 2019 pre-COVID levels. These favorable housing dynamics, along with increased time spent at home, continue to support new kitchens and remodels, presenting a favorable backdrop to the market in 2022. The food processing industry is in a period of investment with need for equipment to increase capacity, address operating challenges, and launch new food items. We are poised to capture new trends in faster growth categories and provide unique offerings with our full line and automated solutions. Now I'll pass the call over to James to comment on some of the technology initiatives and spotlight another recent product innovation highlight in our investor slides. Thanks, Tim. Over the past year, we've shared some great examples of NPI that Middleby launched in 2021. As a reminder, these products can be found in supplemental deck provided for this call. We introduced technologies from our automated frying solution, the FryBot, to our latest highly efficient multi-zone food processing oven, the TurboChef by Alkar, to recall a couple. Middleby continues to deliver meaningful innovations at the brand level and collaboratively across the brands. As we look at new product introductions, NPI, our brands focus on more than making the best and efficient coffee, espresso, ice cream, burger, pizza, et cetera. They focus on the best possible platform with sustainability at the forefront of the innovation. Greenhouse-neutral materials, packaging, water, gas, electrical consumption, food waste, automation, operator safety, to name a few, are all facets of the design that our engineers continue to focus on. The CiBO+ by Lincat is no exception. The CiBO+ is Middleby's latest cooking innovation. The CiBO+ was developed to deliver a new and highly flexible, sustainable cooking platform to address all market segments looking for a flexible, green cooking solution. The CiBO+ has enjoyed much success in the U.K. from retail chains to pub chains and many more general market venues. The CiBO+ is ready to launch internationally, where it will target emerging markets due to its very low energy consumption and low input power. At the core of the innovation are four unique heating mechanisms that work independently to maximize cooking flexibility. Convection, radiant, microwave, and conduction define the technology and are at the root of this new innovation. In particular, the radiant conductive base is the first of its kind and provides unique finishing capabilities. As with all new Middleby innovations, the CiBO+ is compatible with Open Kitchen. We look forward to the great growth that the CiBO+ will bring Lincat and Middleby. Now I will turn it over to Bryan. Thanks, James. For the fourth quarter, we generated record results with revenue of over $866 million and adjusted EBITDA of $193 million. GAAP earnings per share were $1.80. 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 $2.11. This amount of adjusted EPS includes a negative impact from the recent grill acquisitions of $0.04. Given the scale of the deals we closed as Q4 ended, this acquisitions impact figure includes the third-party costs associated with executing the transactions. While supply chain challenges persist, year-over-year revenues grew nearly 19% or 12.6% organically. I'm pleased to note, once again, that robustness in orders persists. Orders have again exceeded $1 billion for the quarter. Adjusted EBITDA of $193 million reflects growth of 33% over the prior year. Our margin exceeded 22% of revenues. Sequentially, we expanded margins in all three segments. As I enjoy reminding you, we are consistently growing our bottom line faster than our top- line, even while we are making meaningful investments in technology initiatives, are bringing differentiated products to the market, and are expanding our platforms. Commercial food service revenues globally were up 18% organically over the prior year. The adjusted EBITDA margin was 26%, an increase of approximately 150 basis points sequentially from the third quarter. By the way, all the margin values I will discuss are on an organic basis as well, meaning excluding any acquisitions and FX impacts. The margin results were seemingly better than I had predicted after the third quarter. Supply chain challenges and inflationary pressures do persist, but we benefited from mix, integration actions, and some pricing. In residential, we saw revenues up 4% versus 2021. The adjusted EBITDA margin was 21%, which was marginally above Q3. In food processing, revenues increased approximately 5%, and the adjusted EBITDA margin was a little under 24%. Across all our segments, we are seeing the positive results from both our concerted efforts to shift product mix to our best solutions and from our mid-year pricing actions. Our operating cash flows were over $77 million. The current business environment is impacting our working capital levels, especially as it relates to inventory, where we are addressing very strong demand levels while facing increasing costs and many supply chain-related challenges. Our total leverage ratio is 2.8 x. Our covenant limit is 5.5 x. We currently have over $2.2 billion of borrowing capacity. These figures are after giving effect to the nearly $600 million we recently deployed in acquisitions. One brand that we acquired is Kamado Joe, about which one of my sons commented, "Kamado Joe sounds like a superhero." That got me thinking, we have a whole universe of super products. I'd argue they are superheroes for our customers. I would like to introduce you to the Middleby universe. Kamado Joe, with the strength of a five-piece ceramic shield, a smooth hinge, and countless accessories, is out to save the world from spoiled green eggs. As he battles, next to him is Masterbuilt, a lover of the outdoors who fights with smoke and heat, which are controlled with amazing precision. Also on the outdoor crew are the charcoal-powered twins, Char-Griller and Char-Griller Flat Iron. Speaking of griddles, which is the fastest-growing category of outdoor cooking applications, lurking on patios is Evo, who always gathers a crowd. Take a bite of a delicacy prepared on this flat- top grill, and you will immediately be transported anywhere you choose. I know this firsthand. After a few bites of Chef Chris's bulgogi beef banh mi, I was transported to Vietnam, seeking out more of Chef Keith's pho. By the way, stop by any of our not-so-secret hideouts, I mean showrooms, to start your own journey. The Middleby legion does not stop there. Moving indoors, Brava can electrify a situation with 1,800 watts of power, ready to instantaneously strike. Known for sheer strength, in walks Viking, burners a-blazing, who fights off Sub-Zero temperatures while out hunting to keep us safe from Wolf. That's just the North American crew. Leading our European allies is La Cornue, who brings some elegance to the battlefield, and with the new racing-inspired costumes, I mean colors, by Martyn Lawrence Bullard, she has camouflage for all settings. We have our own Iron Man too, AGA. While I potentially am getting a little more than carried away here, my son told me this was quite clever, and that was incredible praise, and it made me quite happy, but I will admit to being a little disappointed he doesn't equally appreciate all my spreadsheet skills. Bringing it back to finances, what I really think is clever is that when we are not acquiring superheroes and building super products, we also may be acquiring stock. During the fourth quarter, we used over $80 million on capital and share-related actions. Firstly, we purchased $25 million of stock under our existing buyback program. We continue to make purchases in 2022 for an additional $75 million. Secondly, we took actions to address future dilution risk associated with the convertible debt we issued in August of 2020. We spent nearly $55 million in Q4 on capped calls to increase the effective conversion price on the convertible debt from under $208 up to $225. The potential benefit of this transaction is as follows. Assuming our stock is trading above $225 when the convertible notes mature in 2025, we will receive nearly $100 million of stock, for which our after-tax cost was around $40 million. Transitioning to near-term outlook commentary, I will start by discussing our backlog and order trends. As a reminder, we have included details in the presentation that is available at the investor section of our website. We will be refraining from sharing this information going forward, as we believe we have recovered from the depths of the COVID impacts, such that comparisons back to pre-COVID periods are not as relevant. For food processing, I will remind you this segment is prone to more volatility than our other businesses. Orders were up over 2020 levels, but admittedly were down modestly versus 2019. It is important to note that Q4 of 2019 was exceptionally strong. It was the highest order quarter ever for this segment. The second highest quarter ever was Q3 of 2021, then followed by the just ended Q4 of 2021 in third place. The business remains strong. We closed out 2021 with a backlog of nearly $190 million, which had grown 40% during the year. 2022 has started off well. The backlog is up a further 20% so far, reinforcing our positive outlook. Commercial food service order growth for the fourth quarter over 2019 was 40%. This is the highest quarterly increase during 2021. Orders have exceeded $700 million for three quarters in a row now, and the start of 2022 has continued to be just as strong. Our backlog at year-end was under $900 million. It has grown over 15% to date in 2022. Residential's order intake for Q4 exceeded 35% over 2019. As is typically the case, Q4 was seasonally stronger than Q3. This segment closed the year with an organic backlog of over $290 million, and this has grown modestly in 2022. I will reiterate, however, what I shared last quarter. We are keeping our expectations at modest levels for the near term, given the supply chain limitations on significantly expanding revenues. As I mentioned last quarter, we did take pricing actions during Q4, and additional increases will be implemented at the start of Q2. This is all necessitated as inflationary pressures on costs for materials, freight, and labor persisted through the fourth quarter and have continued into 2022. We do not see near-term relief on any of these factors. Also, the Omicron surge impacted productivity for us and our suppliers as we started 2022 and will have an impact on Q1 margins. Looking at Q1 for commercial food service, we expect nominal top- line growth sequentially and margins likely back at levels more similar to Q3, given increasing cost pressures and the COVID disruptions. For residential, organically, which excludes the significant and exciting Q4 acquisitions, we also expect modest top- line growth sequentially. Given the profitability levels associated with our recent acquisitions, the full segment revenues will be coming down. However, as outlined in the slides we posted, we obviously have a strong track record of growing margins at acquired businesses. We are beginning that journey with our expanded outdoor platform. For food processing, as is typically the pattern for this segment, Q1 revenues and margins will be a little softer than Q4. Nonetheless, given our backlog and the investment activity in the markets we serve, we are expecting strong growth along with margin expansion as we progress through 2022. Thinking about margins across our businesses, while we have been regularly taking pricing actions, given the persistent inflation impacts and backlog levels, near-term margin pressure will remain. I commented that Q1 likely looks similar to Q3. The benefits of pricing actions will continue to build through 2022, but margin expansion from price cost favorability probably takes a little longer than we'd previously hoped. We believe improvements will begin to build in the second half of 2022. Every day, we are working hard to address inflationary pressures and the supply chain issues that limit product availability and impact our volumes. Nonetheless, our focus on innovation and delivering value to our customers is unwavering, and they in turn have continued to show a healthy appetite for our products. We closed out a challenging and amazing year with a record quarter. Even with the challenges that are present, we are looking forward to an even stronger 2022. Our entire organization is excited to deliver more record-setting results. With that, we are open for your questions. Ladies and gentlemen, if you'd like to ask a question at this time, please press the star then the one key on your touchtone telephone. To withdraw your question, press the pound key. Please give us a moment while we assemble this Q&A queue. Now, the first question coming from the line of Mircea Dobre with Baird. Your line is open. Thank you. Good morning, everyone. Hey, Mircea. Good morning. Good morning. I guess where I'd like to start is on what you're seeing on a cost side and the supply chain. You know, the fourth quarter here was better than kind of what we were expecting and what we've heard from other folks in the industry, I think. I'm curious as to, you know, what do you see and what allowed the quarter to be better than expected? It sounds like you're seeing additional challenges as you look into the early part of 2022. Can you be a little more specific as to what those are and how that kind of plays into the margin guidance that you just provided us? Well, I think, you know, from the time we had the last call, the inflationary pressures have continued, right? We didn't just kind of get them all hit in Q3, but I mean, we've seen steel continue to rise. Labor is certainly going up. Freight has continued to be a challenge. The reality is the cost side of the business actually took a pretty big step up as we went through the quarter as well. You know, and we'll perhaps talk about some pricing as well. I mean, we've continued to be pretty proactive in making sure that we address it with pricing challenges. I mean, I think the comments that, you know, Bryan reflected are some of the increases in cost really across the, you know, the board that we've seen kind of particularly on the material and shipping side. You know, as I think about Q4, you know, we also did have you know some mix benefits in there, and we hope to you know work to sustain that. As we think about Q1, and I've read you know some of the notes that came out this morning. You know, Omicron wasn't as you know as impactful to us in Q4 as it was in Q1, where we you know had disruption you know at you know at many of our you know divisions. While there might have been, you know, more expectation about that impact in Q4, again, I think we started off okay there, but certainly, you know, are having, you know, productivity losses in Q1, and, you know, it impacted both us and our suppliers. I see. Okay, that makes sense. You know, you talked about another price increase that is coming in the second quarter. I guess what I'm wondering here is, are you getting any sense that some of your channel partners, customers, and so on are potentially trying to front run some of these price increases because they've been quite meaningful in 2021. Given what you're experiencing from a cost standpoint relative to sort of three months ago, what is a fair expectation for the sort of price increases that we should be thinking about in Q2? I might ask Steve to jump in here, but when you say front run, you mean bring orders in ahead of price increases? Yeah. That, that's what I meant. Yeah. Yeah. Yeah, I mean, I think there is always some of that dynamic. I think the challenge that we've had is just we have such a large backlog, right? We're not going back and repricing, you know, all of that backlog, you know, right now. I mean, I think one of the things, you know, as you look at the margins right now, we feel like we've taken a lot of the, you know, the appropriate actions. You know, maybe we'll have, you know, some margins that are a little bit challenged in the first quarter, but as we kind of think about our underlying, you know, business, and we get kind of through this kind of, let's say, the price lagging the cost, we feel pretty good about where our margins are as kind of we come out of that period. I think it might be helpful also to kind of walk through what the cadence is. Steve can probably touch on that better than me. Yeah. Good morning, Mircea. Again, just going back to the second half of last year. Again, we really hit our first round of pricing in the back half of the year in August, and then went with another round in November. As a frame of reference, the November increase, you know, was a bigger increase than the August increase. As Tim commented on, obviously, with the costs continuing to go up as we finished up last year and into this year, you know, we did announce another increase that would go into effect on April 1st. I would say that April 1st increase would be in line with the increase from a size standpoint to the November increase. The way I would think about how that pricing is flowing through is, again, you know, the August increase, you really would probably start to see. We picked up maybe a little bit in the fourth quarter, but you really would start to see that flow in the first quarter. I think the November increase, you start to see flow through in the second quarter, third quarter, and then the April 1st increase, I think you're maybe tail end of third quarter, really coming through in the fourth quarter. Just kind of how I would think about the cadence and kind of flow through pricing, as the year unfolds. I would say, you know, we've also been very intentional, you know, going after chain customers as well. I mean, kind of speaking to those increases for more general market a little bit more broadly, but also being very intentional, you know, on our chain customers, which is obviously where a lot of the growth we're seeing right now is coming from. Great. That's really helpful. Just to clarify, if the November price increase is flowing through in the second quarter, is that enough to bring you to price cost neutrality, or is that getting pushed into the third? I would still say we're behind, right? I mean, that's why we needed to take another price increase going into the year because I think the November, you know, price increase that we had really reflected what we were seeing in the market, you know, in the third quarter, kind of hence, you know, around the time of the last call. But again, we've seen, you know, costs continue to go up and, you know, and that's kind of reflected in the last increase that's gone into effect that Steve just mentioned, you know, around April 1st, which we'll see later in the year. We are lagging as we go through the year. I mean, certainly, you know, we're doing other things to expand the margin, which was kind of, you know, part of our longer term plan as we'd express, you know, our longer term target margin. That's, you know, bolstering here, as well as some of the other, you know, short-term actions that, you know, that we can take. But I mean, I think really we feel good again about the actions we've taken, but there is just gonna be this lag as we go through the year. We should see improving margins also as we go through the year. Understood. Final question for me. As pricing comes on. Okay. Right. Last question for me is on automation, your comments on automation and all the new product highlights that you had. I'm asking specifically for products like FryBot and PizzaBot. I guess the question is this, as you're presenting this solution to various customers, what is the feedback? I mean, are these products sort of feasible to sort of start seeing in commercial operations over the next, call it 12-24 months? Or are we still at the stage where we're just talking about prototyping and this is more of a, I don't know, longer term, 2025 and beyond type opportunity? I'm gonna kick it here to James in a second, but I would think about it in really, you know, a couple of categories. I mean, we introduce products for today, and then we are also continuing to build for, you know, the future of what we, you know, we think that is gonna be a continued pipeline we're gonna be developing over a period of, you know, 3+ years. I mean, I think as, you know, James would describe it, there's kind of embedded automation, which is, you know, here and now, and then there's kind of these, let's say, more, you know, breakthrough, you know, technologies that is part of our investing for the future. There is, you know, interest, traction, you know, et cetera. I mean, these things will come on sooner in a period like we're experiencing now where, you know, labor is obviously, you know, one of many challenges. There's a lot greater interest in these solutions. We do feel good about, you know, kind of the cadence of how it will evolve over the next handful of years. Mircea, I'll say that we've got both the FryBot and the PizzaBot operating at the Middleby Innovation Kitchens in Dallas, where you know we've been you know not shy about talking about you know the number of customer visits that we have through the MIK. I will tell you that both products are getting a very you know warm great reception by the end users. Really, I would expect to see you know solutions like the FryBot in the marketplace in limited volumes you know this year with volumes continuing in subsequent years. I mean, it is a long-term strategy today. Our customers are taking us up on the great embedded automation that we're offering today. They are you know forward-looking to, "How do I add collaborative robotics such as the robotics that we've invested in with Productive to embedded automation to further enhance you know the profitability that the equipment can bring them." I would say this is not vaporware by any stretch, and we do expect you know meaningful you know revenue from these solutions in the next few years. Great. Thank you. Yeah. Thanks, Mircea. Our next question coming from the line of Tami Zakaria with JP Morgan. Your line is open. Hi. Good morning. Thank you so much for taking my question. I think one of your slides talked about the potential for acquisitions to gradually get to Middleby's 20%+ EBITDA margin profile. Can you comment on how fast this is likely to happen for the most recent acquisitions you did in December? Can you share some examples of initiatives that help you get there for these new ones? Sure. Yeah. I, you know, you're referring to the outdoor grill acquisitions, you know, presumably. I mean, I think we're very excited about those brands and a lot of the products they're bringing to market. You know, as we kind of posted in the slides there, they're north of 10% or kind of low double digit right now. You know, I think we are still in early stages, but we feel like a three-year timeframe is about the right horizon to kind of journey from the 10% to the 20%. We also kind of commented in those slides to some of the areas, you know, which are synergies. Whether that is supply chain, logistics, probably some product development. Part of that is organic of what they were doing, because there's some great products that you know all those brands and companies were bringing to market and then kind of accentuated by you know the capabilities and technologies that you know Middleby is still thinking about shifting bringing innovation to market. Those would be you know some of the categories that typically we would you know lean on you know. I think you know we've obviously got a long track record you know with acquisitions. We've posted a few you know in there on the residential side and kind of the journey that we've had with those margins. We feel, you know, pretty good about that. We'll certainly have more clarity as we kind of go through the course of 2022. Understood. Thank you. If I could ask one follow-up along the same lines. I think we have heard one of the outdoor grill competitors recently reduce their annual outlook against tough comps. Does that have any implications on how you're thinking about the growth potential of these new acquisitions you made late last year? Are you expecting these businesses to grow in line with the broader company or maybe touch below that given residential is coming off of a tough comparison? How are you thinking about growth for these new additions this year and near term? A couple of things. One, we're living in a dynamic world, and certainly residential indoor and outdoor are no exception to that. Those companies have experienced some nice growth. You know, there may be a little bit of pullback in the market broadly. I think one of the things that excited us about the platform, and outdoor has been an area that we've wanted to expand for a long period of time. I know we've probably talked about outdoor over the course of a number of years. Really kind of the products and the categories that we are in, particularly with these brands, we feel that there is kind of longer-term growth trends as we think about connected charcoal, you know, gravity-fed charcoal, certainly, kind of the, you know, the egg platform. We do feel that there is a lot of potential market growth, you know, over a number of years here. You know, what the next 12 months, you know, brings. We do think that the next, you know, the next year will be, you know, a pretty good year with those businesses. I mean, I think we're excited about the long-term outlook of the whole outdoor platform. Great. Thank you so much. Thank you. Our next question coming from the line of Jeff Hammond from KeyBanc Capital Markets. Your line is open. Hey, good morning, guys. Good morning. Good morning. Hey, just really wanna come back to one thing on kinda the margin cadence and price cost. I think you said it's gonna take longer for kinda these pricing actions to read out, and I just wanted to understand what is driving that. 'Cause it seems like, you know, you guys pushed through some of your backlog with a strong fourth quarter, and I'm just trying to understand why that would take longer. You wanna give it a shot? I think, Jeff, I would just say, you know, as we continue to see orders come in at strong rates, you know, again, going back to being up 40% in commercial over 2019 for the fourth quarter. I mean, even though I think we're doing as good a job as any, you know, keeping up with the supply chain issues and getting, you know, products out the door, your orders continue to come in at, you know, obviously, you know, record high rates. So it's still this continued cadence of orders really kinda outpacing, you know, units out the door. So it's obviously, it's building the backlog. As that backlog continues to grow, that's where you see the quarter or two delay of having the price, you know, really flow through, if that makes sense. Again, I've just tried to kinda lay out that if you think about where the pricing is going to affect you're going to have, you know, almost two quarters before you really start to see that pricing flow through. Maybe it's, you know, three to four months on the short side, but certainly up to five or six months, depending on, you know, the brand, the product, before you really start to see that come through, again, based on just where order trends have been and continue as we start this year. Yeah. You know, I'll add, you know, to that, right? You know, we have, you know, multiple variables involved there, right? Obviously we're addressing, you know, the price side, as Steve has outlined. You know, the cost side continues to jump around as well, right? We're just not getting any, you know, stabilization, you know, on the cost side, right? That just makes it a little bit harder to get, you know, the margin expansion, you know, that we were, you know, driving, you know, towards. Okay. Jeff. Okay. If you just think about it. Okay. The price increase that Steve mentioned, which we've announced to the market, it goes into effect. None of that's in the backlog today, right? We've got roughly a $1.4 billion-$1.5 billion backlog that's not included in there, right? But the cost side is gonna hit that, so that hence some of the timing. Just as you think of, you know, some of the component availability and your manufacturing capability, just trying to get a sense of, you know, if you think you're gonna be able to catch up any of this backlog in 2022, you know, at some point, either, you know, catching up on that supply availability or, you know, increasing production or do we exit 2022 at these still really elevated backlog levels? I'll start and then others can add in and correct, 'cause it's a little bit of a crystal ball, right? I mean, I think the reality is we are doing the things that we can do. You know, we have invested in inventory. You can see that we've got roughly $200 million more of inventory, you know, at the end of the year than I think we had at the beginning of the year. You know, I mean, certainly that's a cash flow investment. We've done things operationally in a challenging environment to add people, which is very difficult to add as well as we've invested in fabrication and equipment. I mean, we are very focused on trying to expand the production and, let's say, reduce lead times and catch up to our customers. You know, the key element is supply chain, and our teams are working, you know, very hard all year long. I mean, they've done a tremendous job in making, I'll say, fixes on a daily basis because, you know, the number of, you know, you wake up in the morning and you find out you've got a dozen fire drills to go deal with. I mean, that is kind of the, you know, the tenor of the day. You know, that being said, I mean, I think we've done a lot of things in terms of, you know, thinking about how can we expand the vendor base, you know, how can we get, you know, more out of our supply partners, et cetera, right? I think that is the challenge that we, you know, continue to face as well as many others in the industry. You know, we do think that we will do better as we go through the year, but I mean, I think that is gonna, you know, likely be, you know, also the continued constraint. Hopefully it'll be an improving situation, but likely a constraint. I mean, it's hard to say what the end of the year is gonna look like, Jeff, but I mean, you know, likely we're still gonna have a, you know, much larger backlog at the end of 2022 than we would've historically. It's hard to, you know, envision a situation that we don't. Okay. Thanks so much, guys. As a reminder, ladies and gentlemen, if you'd like to ask a question, please press star then the one key on your touchtone telephone. Our next question coming from the line of Walt Liptak from Seaport Global. Your line is now open. Hi. Thanks. Good morning, guys. Morning. Hey, wanted to ask about the commercial food service, you know, that order growth that you referenced, you know, +40%, +45%. I wonder if you could help us just, you know, how much of that is volume growth, and how much of it is price right now? Well, you know, I think, you know, Steve has outlined, you know, some of the pricing actions, right, you know, we have taken, right? You can, you know, I guess, you know, model that into, as you think about, you know, when the orders have come in. It is, you know, much more, you know, volume, you know, than it is, you know, price. Okay. All right. That helps. And then just, you know, as we're thinking about trends and sort of the, you know, the changes that are going on in the restaurant industry, I wonder if you could help us. Do you have visibility into whether the machines that are getting purchased are for replacement of old machines, like restaurants, you know, just doing their maintenance CapEx, or do you think it's new store openings? Yeah. Well, that's a great question. I think if you go back and historically look at a quote-unquote normal year, of course, you know, usually about half of our orders are coming from replacement, right? Then the rest of the orders are made up of obviously new builds, parts, you know, menu driven, you know, innovation that a restaurant may incorporate. But go back to it usually being 50% on replacement. I don't have the exact number, but I will tell you, I think there's been a noticeable shift over, I'll call it the last six months, maybe a little bit longer, and certainly as we're for sure going into this year, where you're seeing the new store orders take more of that overall order share. I think it's, again, it's coming from you have the large QSRs, the fast casual guys. I mean, they're building stores at record levels. You're seeing more and more new store orders than I think you would historically have. I don't quite know the mix, but it certainly is probably the biggest percentage of new store orders as a percentage of overall orders that I think we've probably seen in a long time. I think at some point, you know, that will shift back. I think the new store order trend continues for the majority of this year, just knowing the pipeline that a lot of those big customers have in place right now. At some point, you know, next year and beyond, you probably get back to, you know, more the traditional replacement cycle. Right now, it's definitely more focused on new store builds from an order standpoint. Okay. Great. Then maybe just the last one. In food processing, I heard the tough comp comment and you know that it's a strong market for food processing. I wonder if you could help us, you know, maybe a little bit with just the order funnel, you know, for the year. Is it around the meats or the baking, or is it both where you're seeing a good order funnel? Yeah, we're seeing a good order funnel for both. I would say that had been a little bit lighter if you go back over the last few years on the meat side of the business, and that has probably strengthened, you know, here as you know as of late. Maybe shifting a little bit of the mix back towards that piece of the business, which has been a good thing. Okay, great. Okay. Thank you. Our next question coming from the line of John Joyner from BMO Capital Markets. Your line is now open. All right. Thank you very much for the time. My question's on the margins. I know there's been a few of these, but it's more on the, I guess to me, the margins have been very impressive for Middleby when you compare it with a lot of other companies that we cover, a lot of industrial companies. The margins overall have held up quite well despite the headwinds that everyone knows about. Maybe you can comment on just the overall structural improvements that you made internally with your cost structure. Also, possibly comment if there's anything that's left to do. Then last, on what you think the stickiness of the pricing actions that you've taken. You know, once we kinda get through all of this, how much do you think that these pricing actions do you believe that you'll have to give back? I think on the margins, I mean, we've got actually some of that laid out in the slide. I will say that, you know, you can see we've done a lot of acquisitions over the last three years and frankly, you know, five years and before that as well. I mean, you know, we're making constant improvements to those businesses. I would say, you know, part of what you're saying when you say structural, it really is leveraging the platform, kind of our best practices, et cetera, with some of those new companies that have come into the fold. You know, that certainly was part of the journey to get to our longer term. Margin targets, and there's still continues to be opportunities because we've continued to add, you know, companies to the portfolio, you know, such as the grill companies now and residential we talked about. I mean, that is a piece of it. You know, again, we talk about mix, but that really is a strategy within the company. I mean, as you know, James kind of gone through NPI, and it's not only those, you know, products that we've got listed, because I would say that's a small subsegment of a lot of the products that we've had come out over the last several years. You know, thinking about how do we really move the organization to selling on ROI and our better solutions. I mean, those are two levers that are, you know, reflected and will continue to be, you know, reflected, you know, as we kind of move through the next several years. I'm sorry. I know there's other questions embedded there, but I forgot. We'll turn it over to Steve for the price stickiness. Yeah. I mean, John, you know, it was the price stickiness question. I mean, it's a great question. You know, obviously, the goal is to hold on to as much as possible. I do think we've tried to be very open and transparent, again, with our key customers about where our costs are, and I think in turn, they've been pretty flexible on the pricing coming through on the other side. I think it certainly holds for, you know, the upcoming years. I just think, again, as we get through this period, and then we're shifting to, you know, the higher technology products through this period, and higher, you know, better mixed products, as Tim talked about as well. I think those are all very favorable, you know, for us throughout the rest of this year and certainly probably the next year or two to follow. Okay. Excellent. Maybe just one more. Sure. Pre-COVID, you were kind of thinking that organic growth would revert back to that, I believe this is the case, you can tell me if I'm wrong, but back to the kind of mid- to high-single-digit range, for some time. I guess, do you think it's hard to tell, right? Because I get, you know, everybody has, you know, these kind of huge backlogs, so it's really hard to know. Do you think that the industry is now really primed to kind of run at, in this range going forward, in that kind of mid- to high-single-digits? I think we probably wouldn't wanna project what the percentage would be because it's an unusual period. I do think we feel, you know, that the industry is gonna be robust for a number of years because of kind of all the dynamics that we've been talking about, you know, labor, food, a lot of new trends, demographic shifts, delivery, you know. I mean, we're kind of going through an exciting and unique, you know, period. I mean, I think that is gonna cause different types of investments in existing footprints as well as a lot of new, you know, a lot of new restaurant openings as well as new players in the market, right? I mean, I think that's all gonna, you know, be a pretty favorable backdrop for a number of years. Okay. Tim, thanks. Sorry, I lied. I do have another one here. Tim, you talked about at the beginning some of the new product introductions, including, you know, greater automation and, you know, obviously, a lot of these improvements like process times are quite impressive, right? I mean, you kind of go back and look at what you've had in your decks or when you read about these products such as Alkar and TurboChef and such, where, you know, you go from cooking from hours down to minutes. From a payback perspective, I mean, what are customers getting from these? I mean, it seems like anything less than twelve months would be kind of a no-brainer. I guess, how can you better highlight these products for people to better understand? Because I get that, you know, there's a difference between full automation and you know, kind of that journey toward automation. When you have these products that you do highlight, I just believe that people don't probably quite appreciate what you know, what the transformation that's occurring, I guess, within the overall industry, whether it's processing or commercial side or even, I guess, the residential side. I mean, so I don't know if you can kind of expand on those products or what customer you know, kind of the customer uptake, the excitement. I know you talked about some of that earlier in the call, but anything you could add would be helpful. This is James, and I will take that. I think that's really where the end user engagement is very important and, you know, why Middleby has been, you know, successful with a lot of these innovative, you know, products such as rapid cook, accelerated cook, even the embedded automation is because of our, you know, selling process and being able to get in front of the customers to demonstrate the product. Can't overemphasize enough the importance of getting customers engaged in front of the products to where they're actually cooking on, witnessing, you know, what their products deliver. We did kind of the first wave of that work with the consolidated reps a few years ago, and now we've, you know, kind of reinvented the process with the Middleby Innovation Kitchens and our ability to get, you know, customers through the kitchen. So they're seeing firsthand how these technologies can benefit them from a labor, from a transaction standpoint in order to drive ticket counts and profitability. As it relates to the payback, you know, you're kind of right on there. Under a year is not atypical for these types of, you know, systems. Okay. I think I hit all your points there. If I left one out, it's because I forgot the question, but let me know if I missed any. No, no, you did. But then, just maybe, sorry to ask many questions here, but this kinda goes along with what James was just discussing. In your commentary that the sales paradigm around customer engagement, you know, with innovation kitchens, that has shifted, I assume that essentially benefits both the independent sales reps and customers, but maybe can you give more details around that? Does that really change how the independent sales reps go about doing their business or anything else that you could add color around that would be helpful. Yeah. I mean, I think, you know, our rep organization is a partner and really part of Middleby today. I mean, I think so. We spent a lot of time kind of working on what the sales process looks like together and doing, you know, a lot of training and education, and that's still, frankly, a continuing process. They've made a lot of investments, you know, along those. By the way, not only do we have this great Innovation Kitchen, which is, I'll say, the mothership in Dallas, but you know, our sales reps have also invested in their own demonstration test kitchens, and they've invested in chefs, right? It's really a network that we've got, you know, across the company. You know, so there's, you know, as we kind of talk about evolving sales, you know, process, there's many aspects to that. You know, one of, you know, that is the most important is really making sure that we fundamentally understand, you know, what are those technologies that deliver the, you know, the greatest, you know, value to our customers and give them that hands-on experience. That really is something that we're, you know, doing more and more of, and it's been, you know, really kinda come on in this, you know, past year, and we'll continue to pick up momentum as we go through the next several. I think I'd just add that you know, the innovation kitchen is actually you know, also a tool for the rep and one that they engage in you know, quite frequently. The reps are bringing you know, customers from all over the United States into the kitchens where they really do need to show the broader capabilities of Middleby, one that they might not be able to you know, do in their test kitchens. They are you know, frequently traveling down there with you know, two to 20 guests at a time. Yeah. Great point. Okay. Excellent. Thank you so much for the time. Yeah. Thanks, John. That is all the questions we have for today. I would now like to turn the call back over to management for any closing remarks. Just thank you everybody again for joining us on the call today, and we appreciate it, and we'll speak to you next quarter. Ladies and gentlemen, that does end our conference call today. Thank you for your participation. You may now disconnect.