Exhibit 99.1
The Middleby Corporation Reports Record Second Quarter Results
ELGIN, Ill.--(BUSINESS WIRE)--July 28, 2005--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 ended July 2, 2005. Net
earnings for the second quarter were $8,969,000 or $1.11 per share on
net sales of $83,912,000 as compared to the prior year second quarter
net earnings of $8,289,000 or $0.82 per share on net sales of
$72,913,000. Net earnings for the six months ended July 2, 2005 were
$15,317,000 or $1.91 per share on net sales of $158,801,000 as
compared to net earnings of $13,880,000 or $1.39 per share on net
sales of $135,376,000 in the prior year first half.
Second Quarter Financial Highlights
-- Net sales rose 15.1% in the second quarter, reflecting strong
international growth with increased business with expanding
restaurant chains. The second quarter was also favorably
impacted by a strong order backlog carried from the first
quarter as customers placed orders ahead of first quarter
price increases. Additionally, the increase in net sales
reflects the impact of the Nu-Vu Foodservice Systems
acquisition, which accounted for 5.5% of the second quarter
sales growth. Excluding the impact of the acquisition, net
sales would have increased 9.6% in the second quarter.
-- Gross margin decreased to 38.8% for the second quarter as
compared to 39.5% in the prior year quarter. Second quarter
margins continued to be impacted by increased steel and other
material costs, offset in part by increased production
efficiencies resulting from the benefit of increased sales
volumes. The margin rate also was affected by lower margins on
sales of the Nu-Vu Foodservice Systems product lines acquired
in January 2005.
-- Operating income margin decreased to 19.5% as a percent of net
sales for the second quarter compared to 20.1% in the prior
year quarter, reflecting the impact of lower gross margins and
higher general and administrative costs. General and
administrative expenses in the second quarter included costs
associated with the secondary offering completed by the
company in July.
-- Interest expense increased to $1,698,000 in the second quarter
of 2005 as compared to $794,000 in the prior year quarter as a
result of higher debt levels resulting from the December 2004
share repurchase transaction.
-- Total debt decreased to $121,294,000 at the end of the quarter
ended July 2, 2005 from $138,462,000 at the end of the first
quarter and $123,723,000 at the end of 2004. The first half
borrowing activity included $12 million of funding for the
January Nu-Vu acquisition.
Chairman and Chief Executive Officer, Selim A. Bassoul said, "We
were pleased with the results of the second quarter. As expected, our
domestic order rates in the second quarter and the early part of the
third quarter have been lower due to customers ordering in advance of
our first quarter price increase. However, the impact on second
quarter sales was offset by very strong international business which
benefited from a number of product rollouts at restaurant chain
customers during the quarter."
Mr. Bassoul continued, "Although increased steel costs continued
to affect margins in the second quarter, we have continued to make
progress in implementing initiatives to offset this impact and were
pleased with the margins we achieved during the quarter. Gross margins
in the quarter also benefited from the seasonally strong sales
volumes, which are historically the strongest in the second quarter.
We also have made progress integrating the recently acquired Nu-Vu
Foodservice Systems business and made significant improvement to the
manufacturing operations at that facility. As a result, we began to
see margin improvement at this business operation during the quarter
and anticipate that will continue throughout the remainder of the
year."
Conference Call
A conference call will be held at 11:00 a.m. Eastern time on
Friday, July 29 and can be accessed by dialing (800) 367-5339 and
providing conference code 8252040. Members of the financial community
who participate in the question and answer session will receive a
separate call-in number. An audio 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 8252040. A transcript of the call will also be posted
to the company's 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), 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 Six Months Ended
2nd Qtr, 2nd Qtr, 2nd Qtr, 2nd Qtr,
2005 2004 2005 2004
--------- --------- --------- ---------
Net sales $83,912 $72,913 $158,801 $135,376
Cost of sales 51,326 44,120 99,143 83,407
--------- --------- --------- ---------
Gross profit 32,586 28,793 59,658 51,969
Selling & distribution expense 8,769 8,327 16,953 15,703
General & administrative
expense 7,480 5,813 14,365 11,509
--------- --------- --------- ---------
Income from operations 16,337 14,653 28,340 24,757
Interest expense and deferred
financing amortization, net 1,698 794 3,484 1,691
Loss (gain) on acquisition
financing derivatives - 2 - -
Other expense (income), net (62) 78 (265) 272
--------- --------- --------- ---------
Earnings before income
taxes 14,701 13,779 25,121 22,794
Provision for income taxes 5,732 5,490 9,804 8,914
--------- --------- --------- ---------
Net earnings $8,969 $8,289 $15,317 $13,880
========= ========= ========= =========
Net earnings per share:
Basic $1.19 $0.90 $2.04 $1.50
========= ========= ========= =========
Diluted $1.11 $0.82 $1.91 $1.39
========= ========= ========= =========
Weighted average number shares:
Basic 7,508 9,237 7,490 9,228
========= ========= ========= =========
Diluted 8,050 10,048 8,035 10,008
========= ========= ========= =========
THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in 000's)
(Unaudited)
Jul. 2, Jan. 1,
2005 2005
--------- ---------
ASSETS
Cash and cash equivalents $3,767 $3,803
Accounts receivable, net 33,573 26,612
Inventories, net 34,977 32,772
Prepaid taxes 726 9,952
Deferred tax assets 8,836 8,865
Other current assets 1,241 2,008
--------- ---------
Total current assets 83,120 84,012
Property, plant and equipment, net 23,080 22,980
Goodwill 81,515 74,761
Other intangibles 26,300 26,300
Other assets 2,107 1,622
--------- ---------
Total assets $216,122 $209,675
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt $11,730 $10,480
Accounts payable 13,999 11,298
Accrued expenses 43,488 51,311
--------- ---------
Total current liabilities 69,217 73,089
Long-term debt 109,564 113,243
Long-term deferred tax liability 8,002 11,434
Other non-current liabilities 5,007 4,694
Shareholders' equity 24,332 7,215
--------- ---------
Total liabilities and shareholders' equity $216,122 $209,675
========= =========
CONTACT: The Middleby Corporation
Darcy Bretz (Investor and Public Relations), 847-429-7756
Timothy FitzGerald, 847-429-7744