Exhibit 99.1
The Middleby Corporation Reports Record Third Quarter Results
ELGIN, Ill.--(BUSINESS WIRE)--Oct. 24, 2003--The Middleby
Corporation (NASDAQ:MIDD), one of the world's leading manufacturers
and marketers of restaurant and foodservice cooking equipment, today
reported record net earnings of $5,651,000 or $0.59 per share on net
sales of $59,254,000 for the third quarter ended September 27, 2003
compared with net earnings of $4,337,000 or $0.47 per share on net
sales of $57,679,000 in the prior year third quarter. Earnings for the
nine months ended September 27, 2003 were $12,857,000 or $1.37 per
share on sales of $177,616,000 as compared to net earnings of
$8,191,000 or $0.90 per share on net sales of $174,648,000 in the
prior year nine months.
Net sales in the third quarter increased by 2.7% over net sales of
the prior year quarter. The increase in net sales reflects growth in
international markets driven by restaurant openings of major
foodservice chains and the success of new product introductions.
Gross profit in the third quarter of 2003 was $22,633,000 as
compared to $20,464,000 in the third quarter of the prior year. The
gross margin rate in the third quarter improved to 38.2% versus 35.5%
for the prior year quarter. Gross margin improvement reflects
continued operating efficiencies driven by product standardization
programs and volume increases. Gross margins also benefited from an
improved sales mix with greater sales of higher margin product, driven
in part by new product introductions and the elimination of less
profitable product offerings.
Selling and distribution expense increased to $7,259,000 from
$7,042,000 in the prior year quarter primarily due to higher spending
on marketing and training programs associated with new product
introductions and promotion of the company brands. General and
administrative expenses increased to $5,388,000 from $4,475,000 in the
prior year quarter. The increase in general and administrative
expenses included higher settlement costs to resolve legal cases and
provisions to increase reserves for idle facility leases exited in
conjunction with prior year plant consolidation efforts associated
with the Blodgett acquisition.
Operating income in the third quarter of 2003 increased to
$9,986,000 as compared to $8,947,000 in the third quarter of the prior
year. The operating income margin improved to 16.9% in the third
quarter as compared with 15.5% for the prior year.
Interest expense and other non-operating costs amounted to
$1,188,000 in the third quarter of 2003 as compared with $3,050,000 in
the prior year quarter. Interest expense decreased from the prior year
third quarter by $1,251,000 as a result of lower interest rates
resulting from the refinancing of debt in the fourth quarter of 2002
and repayment of high interest notes in August 2003. Total debt was
reduced during the first nine months of 2003 by $25,812,000 to
$62,150,000 from $87,962,000 at December 28, 2002.
Commenting on the company's performance for the quarter, Selim A.
Bassoul, President and Chief Executive Officer, said, "We are pleased
with the third quarter performance. The results of the third quarter
demonstrate continuing gains in operating efficiencies and an
improvement in gross margins resulting from efforts to direct our
sales focus on high margin products. We will continue efforts to
increase margins through material cost reduction programs and product
standardization initiatives."
Mr. Bassoul continued, "We continue to invest heavily on the
development of innovative products focused on energy savings, labor
savings and increased speed of cooking. During the third quarter we
successfully introduced the Southbend Platinum Series of heavy duty
sectional ranges, broilers and griddles at the National Association of
Food Equipment Manufactuers (NAFEM) industry trade show. We are also
excited about the existing pipeline of products in development that we
anticipate to introduce over the next twelve months."
William F. Whitman, Jr., Chairman of the Board, added, "During the
quarter the company prepaid $16.0 million of the high interest rate
notes due to Maytag Corporation associated with the acquisition of
Blodgett. These notes carried an average interest rate of 12.5%. The
note repayment and overall reduction in debt of $18.9 million during
the quarter was primarily funded from operating cash flows."
A conference call will be held on Monday morning at 10:30 a.m.
Eastern Time on October 27, 2003. You are invited to listen to the
call by calling 1 (800) 374-0538 and providing password 3669798.
Analysts and money managers who may participate in the question and
answer portion of the conference call will be sent an invitation
detailing their separate call-in number. The webcast of the conference
call can also be accessed via the Investor Services section of The
Middleby Corporation website at www.middleby.com. Digital replay of
the call will be available approximately one half hour after the
completion of the conference call. The replay may be accessed by
calling 1(800) 642-1687 and providing password 3669798. A transcript
of the call will also be posted on the Company website.
Statements in this press release or otherwise attributable to the
company regarding the company's business which are not historical fact
are forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
The company cautions investors that such statements are estimates of
future performance and are highly dependent upon a variety of
important factors that could cause actual results to differ materially
from such statements. Such factors include variability in financing
costs; quarterly variations in operating results; dependence on key
customers; international exposure; foreign exchange and political
risks affecting international sales; changing market conditions; the
impact of competitive products and pricing; the timely development and
market acceptance of the company's products; the availability and cost
of raw materials; and other risks detailed herein and from
time-to-time in the company's SEC filings.
The Middleby Corporation is a leader in the design, manufacture,
marketing and service of a broad line of equipment used for cooking
and preparation of food in commercial and institutional kitchens and
restaurants throughout the world. The company's leading equipment
brands include Blodgett(R), Blodgett Combi(R), Blodgett Range(R),
CTX(R), MagiKitch'n(R), Middleby Marshall(R), Pitco Frialator(R),
Southbend(R), and Toastmaster(R). Middleby's international subsidiary,
Middleby Worldwide, is a leading exporter and distributor of
foodservice equipment in the global marketplace and its international
manufacturing subsidiary, Middleby Philippines Corporation, is a
leading supplier of specialty equipment in the Asian markets.
For further information about Middleby, visit the company's World
Wide Web site, http://www.middleby.com.
THE MIDDLEBY CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
-----------------------------------
(Amounts in 000's, Except Per Share Information)
(Unaudited)
Three Months Ended Nine Months Ended
3rd Qtr, 3rd Qtr, 3rd Qtr, 3rd Qtr,
2003 2002 2003 2002
----------- -------- --------- ---------
Net sales $59,254 $57,679 $177,616 $174,648
Cost of sales 36,621 37,215 113,280 114,770
----------- -------- --------- ---------
Gross profit 22,633 20,464 64,336 59,878
Selling & distribution
expense 7,259 7,042 22,202 21,575
General & administrative
expense 5,388 4,475 16,098 16,439
----------- -------- --------- ---------
Income from operations 9,986 8,947 26,036 21,864
Interest expense and deferred
financing amortization, net 1,410 2,661 4,746 8,783
Loss (gain) on acquisition
financing derivatives 32 (95) (80) (109)
Other expense (income), net (254) 484 29 395
----------- -------- --------- ---------
Earnings before
income taxes 8,798 5,897 21,341 12,795
Provision for income taxes 3,147 1,560 8,484 4,604
----------- -------- --------- ---------
Net earnings $5,651 $4,337 $12,857 $8,191
=========== ======== ========= =========
Net earnings per share:
Basic $0.63 $0.48 $1.42 $0.91
=========== ======== ========= =========
Diluted $0.59 $0.47 $1.37 $0.90
=========== ======== ========= =========
Weighted average
number shares:
Basic 9,036 8,991 9,032 8,979
=========== ======== ========= =========
Diluted 9,505 9,202 9,401 9,071
=========== ======== ========= =========
THE MIDDLEBY CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
(Amounts in 000's)
(Unaudited)
Sept. 27, 2003 Dec. 28, 2002
--------------- --------------
ASSETS
Cash and cash equivalents $ 4,090 $ 8,378
Accounts receivable, net 28,200 27,797
Inventories, net 25,477 27,206
Deferred tax assets 9,929 13,341
Other current assets 1,186 1,069
--------------- --------------
Total current assets 68,882 77,791
Property, plant and equipment, net 25,505 27,500
Goodwill 74,761 74,761
Other intangibles 26,300 26,300
Other assets 1,766 1,610
--------------- --------------
Total assets $197,214 $207,962
=============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt $13,900 $14,400
Accounts payable 22,723 13,488
Accrued expenses 28,596 36,013
--------------- --------------
Total current liabilities 65,219 63,901
Long-term debt 48,250 73,562
Long-term deferred tax liability 7,878 7,878
Other non-current liabilities 18,063 17,989
Shareholders' equity 57,804 44,632
--------------- --------------
Total liabilities and shareholders'
equity $197,214 $207,962
=============== ==============
CONTACT: The Middleby Corporation
Selim A. Bassoul, 847-429-7788
David B. Baker, 847-429-7915
Timothy J. FitzGerald, 847-429-7744