Middleby (NASDAQ:MIDD) shares dipped 8% Tuesday despite a better-than-expected Q1 performance.

The foodservice equipment maker generated adj. net earnings of $116.3M, or $2.13 per diluted share, on revenue of $994.68M that grew 31.2% Y/Y. Sales grew 11.7% organically, reflecting improvements in market conditions and consumer demand since the initial impact of COVID-19.

Adjusted EBITDA came to $197.3M due to the impact of higher sales volumes and profitability initiatives.

CEO Tim FitzGerald noted, “We started 2022 with another record for quarterly sales and earnings. And, our profitability remained strong, despite continuing inflationary pressures and increasing supply chain challenges. Over the past several quarters we have demonstrated strength in addressing tough circumstances and discipline in managing margins. While in the near term, the challenges are significant, we believe our results will continue to improve in the back half of 2022 and into 2023.”

Operating cash flows amounted to a deficit of $15.3M impacted by seasonality of acquired businesses, as well as supply chain and inflation impacts on inventory. Cash inflows were $59.7M in the prior year period.

The firm ended the quarter with $146.7M of cash balance. However, net debt swelled to $2.5B, compared to $2.3B at the end of fiscal 2021.