Exhibit 99.1
The Middleby Corporation Reports Record Fourth Quarter Results
ELGIN, Ill.--(BUSINESS WIRE)--March 3, 2005--The Middleby
Corporation (NASDAQ:MIDD), a leading worldwide manufacturer of
restaurant and foodservice cooking equipment, today reported results
for the fourth quarter and year ended January 1, 2005.
As previously reported on December 23, 2004, the company
repurchased 1,808,774 shares of stock and 271,000 stock options from
its retiring Chairman of the Board, members of his family and trusts
controlled by his family for an aggregate purchase price of
$83,974,578. The repurchased shares represented approximately 20% of
the outstanding common stock of the company. In conjunction with this
transaction, the company recorded a pre-tax charge of $13,801,000 or
$8,253,000 on an after tax basis. The net charge amounted to $(0.90)
per share after taxes in the fourth quarter and $(0.83) for the full
year.
Inclusive of this charge, the company reported a net loss of
$660,000 or $(0.07) per share on sales of $65,119,000 for the fourth
quarter ended January 1, 2005 compared to income of $5,841,000 or
$0.60 per share on sales of 59,505,000 for the fourth quarter ended
January 3, 2004. Due to the net loss reported in the fourth quarter,
the weighted average number of diluted shares used to calculate per
share amounts for the quarter excludes common stock equivalents in
accordance with generally accepted accounting principles. Net earnings
for the year ended January 1, 2005 were $23,588,000 or $2.38 per share
on net sales of $271,115,000 as compared to net earnings of
$18,698,000 or $1.99 per share on net sales of $242,200,000 in the
prior year.
Excluding the charge related to the stock repurchase, net earnings
were $7,593,000 or $0.83 per share for the fourth quarter and
$31,841,000 or $3.21 per share for the year ended January 1, 2005.
Financial Highlights
-- Net sales rose 9.4% in the fourth quarter and 11.9% for the
year, reflecting the impact of new product introductions and
favorable industry conditions.
-- Gross margin increased to 37.3% for the fourth quarter and
37.9% for the year as compared to 36.2% and 35.4% in the prior
year respective periods, reflecting the benefits of increased
volumes and higher margins on new products.
-- Operating income margins improved to 17.9% for the fourth
quarter and 18.1% for the full year from 15.1% and 14.5%, in
the fourth quarter and fiscal year 2003, respectively.
-- Stock repurchase transaction related expenses of $13.8 million
were recorded in the fourth quarter. Expenses included $8.0
million of costs associated with the repurchase of the 271,000
stock options, $1.9 million of reserve adjustments related to
a pension settlement with the former Chairman, $1.2 million
pertaining to the write-off of deferred financing costs
related to the Company's previous bank agreement which was
refinanced as a result of the transaction, and $2.7 million of
investment banking, legal, and various other costs associated
with the transaction.
-- Fourth quarter non-operating benefit reflected in other income
of $1.9 million or $0.12 per share after taxes is associated
with adjustments to reserves for lease obligations related to
closed manufacturing facilities, which includes a gain
resulting from an early lease termination caused by the sale
of the leased property to an independent third party.
-- Full year results include a $3.2 million tax benefit recorded
during the third quarter associated with an adjustment to tax
reserves for a closed year.
-- Total debt as of January 1, 2005 amounted to $123.7 million
after giving effect to the borrowings incurred to fund the
share repurchase. Subsequent to year-end, the company also
funded $12.0 million for the acquisition of Nu-Vu Foodservice
Systems and $7.6 million for the settlement of the pension due
to the retired Chairman.
"2004 was a successful year," said Chairman and Chief Executive
Officer Selim A. Bassoul. "We concluded the year with positive sales
momentum driven in part by the impact of our new products. We will
continue our initiatives to develop products focused on energy
savings, speed of cooking and automation as we move into 2005. We also
made progress in improving our profit margins, which reflect the
benefit of production efficiencies resulting from higher sales volumes
and generally higher margins on new product introductions. The company
continues to execute initiatives to improve operating efficiencies and
address the rising cost of steel which will impact Middleby in 2005
due to the expiration of a favorable steel contract at the end of
2004."
Mr. Bassoul continued, "We are excited to start the year on a
positive note with the acquisition of Nu-Vu Foodservice Systems. This
acquisition will enable Middleby to expand its product offerings to
address the fast growing trend of on-premise baking."
Conference Call
A conference call will be held at 10:30 a.m. Eastern time on
Friday, March 4 and can be accessed by dialing (800) 367-5339 and
providing conference code 4524150. 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 (800) 642-1687 and
providing code 4524150. A transcript of the call will also be posted
to the company's Web site.
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), Nu-Vu(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
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in 000's, Except Per Share Information)
(Unaudited)
Three Months Ended Fiscal Year Ended
4th Qtr, 4th Qtr,
2004 2003 2004 2003
-----------------------------------------
Net sales $65,119 $59,505 $271,115 $242,200
Cost of sales 40,854 37,987 168,487 156,347
-----------------------------------------
Gross profit 24,265 21,518 102,628 85,853
Selling & distribution
expense 7,156 7,408 30,496 29,609
General & administrative
expense 5,429 5,131 23,113 21,228
-----------------------------------------
Income from operations 11,680 8,979 49,019 35,016
Interest expense and deferred
financing amortization, net 670 1,144 3,004 5,891
Loss (gain) on acquisition
financing derivatives (169) 17 (265) (62)
Stock repurchase 13,801 -- 13,801 --
Other expense (income), net (1,682) 337 (1,365) 366
-----------------------------------------
Earnings (loss) before
income taxes (940) 7,481 33,844 28,821
Provision (benefit) for
income taxes (280) 1,640 10,256 10,123
-----------------------------------------
Net earnings (loss) $(660) $5,841 $23,588 $18,698
=========================================
Net earnings (loss) per share:
Basic $(0.07) $0.64 $2.56 $2.06
=========================================
Diluted $(0.07) $0.60 $2.38 $1.99
=========================================
Weighted average number shares:
Basic 9,104 9,162 9,200 9,065
=========================================
Diluted 9,104 9,744 9,931 9,392
=========================================
THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in 000's)
(Unaudited)
Jan 1, 2005 Jan 3, 2004
----------- -----------
ASSETS
Cash and cash equivalents $3,803 $3,652
Accounts receivable, net 26,612 23,318
Inventories, net 32,772 25,382
Deferred tax assets 18,817 12,839
Other current assets 2,008 1,776
------------- -------------
Total current assets 84,012 66,967
Property, plant and equipment, net 22,980 24,921
Goodwill 74,761 74,761
Other intangibles 26,300 26,300
Other assets 1,622 1,671
------------- -------------
Total assets $209,675 $194,620
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt $10,480 $14,500
Accounts payable 11,298 11,901
Accrued expenses 51,311 37,076
------------- -------------
Total current liabilities 73,089 63,477
Long-term debt 113,243 42,000
Long-term deferred tax liability 11,834 8,264
Other non-current liabilities 4,694 18,789
Shareholders' equity 6,815 62,090
------------- -------------
Total liabilities and shareholders'
equity $209,675 $194,620
============= =============
CONTACT: The Middleby Corporation
Darcy Bretz (Investor/Public Relations), 847-429-7756
or
Timothy FitzGerald, 847-429-7744