Exhibit 99.1
The Middleby Corporation Reports Record Second Quarter Results
ELGIN, Ill.--(BUSINESS WIRE)--July 22, 2004--The Middleby
Corporation (NASDAQ:MIDD), a leading worldwide manufacturer of
restaurant and foodservice cooking equipment, today reported record
sales and earnings for the second quarter and first half year ended
July 3, 2004. Net earnings for the second quarter were $8,289,000 or
$0.82 per share on net sales of $72,913,000 as compared to the prior
year second quarter net earnings of $4,597,000 or $0.49 per share on
net sales of $65,408,000. Net earnings for the six months ended July
3, 2004 were $13,880,000 or $1.39 per share on net sales of
$135,376,000 as compared to net earnings of $7,206,000 or $0.77 per
share on net sales of $121,801,000 in the prior year first half.
Financial Highlights
-- Net sales up 11.5% in the second quarter and 11.1% for the
first half year, reflecting favorable impact of new
product introductions and continued penetration of fast
growing segments, such as fast casual and casual dining
-- Gross margin rate of 39.5% for the second quarter and
38.4% for the first half year as compared to 34.6% and
34.2% in the prior year respective periods, reflecting the
benefits of increased volumes and higher margins on new
products
-- Operating income margins of 20.1% for the second quarter
and 18.3% for the first half year improved from 14.7% and
13.2%, respectively in the second quarter and first half
year 2003
-- Total debt reduced to $48,315,000 for the quarter ended
July 3, 2004 from $53,650,000 at the end of the first
quarter of 2004 and $56,500,000 at the end of 2003
"We are pleased with our strong first half performance for 2004,"
said President and Chief Executive Officer Selim A. Bassoul. "Sales
growth continues to build upon the momentum established in 2003 and
the first quarter of 2004 and reflects the impact of new products
introduced in 2003, such as the Platinum series range lineup with
waterproof controls and non-clogging burners. In addition, after
several years of underinvestment our customers are beginning to
accelerate their replacement cycle of older equipment, which is
becoming more expensive to operate and maintain." Mr. Bassoul
continued, "We introduced a number of patented new products at an
annual national trade show in the second quarter of this year which
were well received by our customers. Our company has been working
closely with customers to develop products that include features any
chef would love, including bigger dials, cool to the touch handles,
and simplified loading designs. These ergonomic features, when
combined with faster cooking speed and energy savings technology have
started to positively impact sales."
William F. Whitman, Jr., Chairman of the Board, stated, "During
the second quarter we amended our credit agreement, which provides for
increased flexibility and more favorable interest rates. We continue
to generate strong cash flows and we were able to reduce debt during
the second quarter by over $5.3 million while also funding working
capital needs. We were also pleased to declare a $0.40 per common
share special dividend in May of this year which was paid to
shareholders at the beginning of this year's third quarter."
Reclassification of Shipping and Handling Costs
Subsequent to the issuance of the consolidated financial
statements for the period ended April 3, 2004, the company determined
that the costs incurred for shipping and handling should have been
classified as a component of cost of sales rather than as a reduction
of net sales. As a result, the statement of earnings for the three and
six month periods ended June 28, 2003 have been restated to reflect
the costs incurred for shipping as a component of cost of sales rather
than a reduction in net sales. The correction in classification of
these costs has no impact on net earnings. The company will amend its
Form 10-Q filings for the quarters ended September 27, 2003 and April
3, 2004, and its Form 10-K/A filing for the year ended January 3, 2004
to restate the financial statements to reflect the correction in the
classification of these costs.
Conference Call
A conference call will be held at 10:30 a.m. Eastern time on
Friday, July 23 and can be accessed by dialing 1(800) 374-0538 and
providing password 8922138. Members of the financial community who
participate in the question and answer session will receive a separate
call-in number. A webcast of the conference call can be accessed
through investor services at www.middleby.com. A digital replay of the
call will be available approximately one half hour after its
completion and can be accessed by calling 1(800) 642-1687 and
providing password 8922138. 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 global leader in the foodservice
equipment industry. The company develops, manufactures, markets and
services a broad line of equipment used for cooking and food
preparation 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. Middleby's
international manufacturing subsidiary, Middleby Philippines
Corporation, is a leading supplier of specialty equipment in the Asian
markets.
For further information about Middleby, visit www.middleby.com.
THE MIDDLEBY CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
---------------------------------------------
(Amounts in 000's, Except Per Share Information)
(Unaudited)
Three Months Ended Six Months Ended
2nd Qtr, 2nd Qtr, 2nd Qtr, 2nd Qtr,
2004 2003(1) 2004 2003(1)
---------- ---------- ---------- ----------
Net sales $ 72,913 $ 65,408 $135,376 $121,801
Cost of sales 44,120 42,758 83,407 80,099
---------- ---------- ---------- ----------
Gross profit 28,793 22,650 51,969 41,702
Selling & distribution
expense 8,327 7,780 15,703 14,942
General & administrative
expense 5,813 5,226 11,509 10,709
---------- ---------- ---------- ----------
Income from operations 14,653 9,644 24,757 16,051
Interest expense and
deferred financing
amortization, net 794 1,623 1,691 3,337
Loss (gain) on acquisition
financing derivatives 2 (42) - (111)
Other expense (income), net 78 148 272 283
---------- ---------- ---------- ----------
Earnings before income
taxes 13,779 7,915 22,794 12,542
Provision for income taxes 5,490 3,318 8,914 5,336
---------- ---------- ---------- ----------
Net earnings $ 8,289 $ 4,597 $ 13,880 $ 7,206
========== ========== ========== ==========
Net earnings per share:
Basic $ 0.90 $ 0.51 $ 1.50 $ 0.80
========== ========== ========== ==========
Diluted $ 0.82 $ 0.49 $ 1.39 $ 0.77
========== ========== ========== ==========
Weighted average number
shares:
Basic 9,237 9,033 9,228 9,031
========== ========== ========== ==========
Diluted 10,048 9,353 10,008 9,325
========== ========== ========== ==========
(1) Subsequent to the issuance of the consolidated condensed financial
statements for the period ended April 3, 2004, the company
determined that the costs incurred for shipping and handling
should have been classified as a component of cost of sales rather
than as a reduction of net sales. As a result, net sales for the
three and six month periods ended June 28, 2003 were restated from
$63,595,000 and $118,362,000 in the previously reported results to
$65,408,000 and $121,801,000, respectively. Cost of sales for the
three and six month periods ended June 28, 2003 were restated from
$40,945,000 and $76,660,000 in the previously reported results to
$42,758,000 and $80,099,000, respectively.
THE MIDDLEBY CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
(Amounts in 000's)
(Unaudited)
July 3, 2004 Jan 3, 2004
------------ ------------
ASSETS
Cash and cash equivalents $ 2,952 $ 3,652
Accounts receivable, net 30,597 23,318
Inventories, net 28,855 25,382
Deferred tax assets 12,872 12,839
Other current assets 1,102 1,776
------------ ------------
Total current assets 76,378 66,967
Property, plant and equipment, net 23,607 24,921
Goodwill 74,761 74,761
Other intangibles 26,300 26,300
Other assets 1,563 1,671
------------ ------------
Total assets $202,609 $194,620
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt $ - $ 14,500
Accounts payable 15,118 11,901
Accrued expenses 37,267 37,076
------------ ------------
Total current liabilities 52,385 63,477
Long-term debt 48,315 42,000
Long-term deferred tax liability 8,264 8,264
Other non-current liabilities 17,148 18,789
Shareholders' equity 76,497 62,090
------------ ------------
Total liabilities and shareholders'
equity $202,609 $194,620
============ ============
CONTACT: The Middleby Corporation
Darcy Bretz, 847-429-7756
David Baker, 847-429-7915
Timothy FitzGerald, 847-429-7744