Exhibit 99.1
The Middleby Corporation Reports Record First Quarter Results
ELGIN, Ill.--(BUSINESS WIRE)--May 8, 2006--The Middleby
Corporation (NASDAQ:MIDD), a leading worldwide manufacturer of
restaurant and foodservice cooking equipment, today reported record
sales and earnings for the first quarter ended April 1, 2006. Net
earnings for the first quarter were $8,051,000 or $0.97 per share on
net sales of $96,749,000 as compared to the prior year first quarter
net earnings of $6,348,000 or $0.79 per share on net sales of
$74,889,000.
First Quarter Financial Highlights
-- Net sales rose 29.2% in the first quarter. The net sales
increase in the first quarter reflects the impact of the
acquisition of Alkar Holdings, Inc. ("Alkar") completed in
December 2005, which accounted for 18.3% of sales growth for
the quarter. Excluding the Alkar acquisition, sales rose 10.9%
in the first quarter, reflecting the impact of new product
sales and continued growth in restaurant chain business.
-- Gross margin increased to 36.7% for the first quarter as
compared to 36.1% in the prior year quarter. The improvement
in the gross margin rate from the prior year quarter reflects
production efficiencies associated with higher sales volumes,
higher margins on new product sales and improved margins at
Nu-Vu Foodservice Systems, reflecting the benefit of
integration efforts completed subsequent to its acquisition in
January 2005. The gross margin improvements were offset in
part by lower gross margins associated with the newly acquired
Alkar operations.
-- Operating income increased by 26.2% to $15,148,000 from
$12,003,000, reflecting the benefit of increased sales and
gross margins. Operating income for the quarter included
approximately $200,000 of costs associated with acquisition
integration initiatives pertaining to Alkar. Operating income
also included $302,000 of intangible amortization associated
with Alkar.
-- The company began expensing stock options during the first
quarter of 2006 as a result of the adoption of Statement of
Financial Accounting Standards ("SFAS") No. 123(r):
"Accounting for Stock Based Compensation", resulting in an
increase to general and administrative expenses of $240,000
and a reduction to net earnings of $169,000 or $0.02 per
share. No such expense was recorded in the first quarter of
2005.
"In the first quarter, we continued to realize sales growth,
reflecting an increase in business with restaurant chains, both
domestically and internationally, and continued market penetration of
recent product introductions," said Chairman and Chief Executive
Officer, Selim A. Bassoul. "We continue to focus heavily on the
development and introduction of new product innovations focused on
speed of cooking, energy savings, and automation. As previously
announced, we recently introduced the Middleby Marshall "WOW" conveyor
oven, which is more than 25% faster and 40% more energy efficient than
conveyor ovens we manufactured seven years ago. We are also proud to
have recently received the 2006 Kitchen Innovation Award from the
National Restaurant Association for the new Rhapsody combination
proofing and baking oven developed at Nu-Vu Foodservice Systems, which
is anticipated to be introduced in the second half of this year."
"We are delighted with the rapid integration of Nu-Vu Foodservice
Systems, which was acquired in January 2005. Mr. Bassoul continued,
"We are also very pleased with the progress made in the integration of
Alkar, a leading manufacturer of cooking equipment for the food
processing industry acquired in December 2005. During the first 90
days, we implemented restructuring initiatives which should result in
gradual improvements in profitability at this business unit during
2006. We remain excited about the prospects of this newly acquired
business."
Conference Call
A conference call will be held at 11:00 a.m. Eastern time on
Tuesday, May 9 and can be accessed by dialing (800) 367-5339 and
providing conference code 9035239 or through the investor relations
section of The Middleby Corporation Web site 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 9035239. 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 volatility in earnings
resulting from goodwill impairment losses; variability in financing
costs; quarterly variations in operating results; dependence on key
customers; international exposure; foreign exchange and political
risks affecting international sales; protection of trademarks,
copyrights and other intellectual property; 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 restaurants, institutional kitchens and food
processing operations throughout the world. The company's leading
equipment brands include Alkar(R), Blodgett(R), Blodgett Combi(R),
Blodgett Range(R), CTX(R), MagiKitch'n(R), Middleby Marshall(R),
Nu-Vu(R), Pitco Frialator(R), RapidPak(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
1st Qtr, 2006 1st Qtr, 2005
------------- --------------
Net sales $96,749 $74,889
Cost of sales 61,225 47,817
------------- --------------
Gross profit 35,524 27,072
Selling & distribution expense 10,125 8,184
General & administrative expense 10,251 6,885
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Income from operations 15,148 12,003
Interest expense and deferred
financing amortization, net 1,796 1,786
Other (income), net (93) (203)
------------- --------------
Earnings before income taxes 13,445 10,420
Provision for income taxes 5,394 4,072
------------- --------------
Net earnings $8,051 $6,348
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Net earnings per share:
Basic $1.06 $0.85
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Diluted $0.97 $0.79
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Weighted average number shares:
Basic 7,618 7,473
============= ==============
Diluted 8,268 8,020
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THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in 000's)
(Unaudited)
Apr. 1, 2006 Dec. 31, 2005
-------------- --------------
ASSETS
Cash and cash equivalents $3,510 $3,908
Accounts receivable, net 41,312 38,552
Inventories, net 43,260 40,989
Other current assets 4,121 4,513
Prepaid taxes 323 3,354
Deferred tax assets 11,342 10,319
-------------- --------------
Total current assets 103,868 101,635
Property, plant and equipment, net 24,938 25,331
Goodwill 98,757 98,757
Other intangibles 35,196 35,498
Other assets 2,924 2,697
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Total assets $265,683 $263,918
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt $14,405 $13,780
Accounts payable 20,809 17,576
Accrued expenses 51,637 62,689
-------------- --------------
Total current liabilities 86,851 94,045
Long-term debt 106,135 107,815
Long-term deferred tax liability 9,509 8,207
Other non-current liabilities 5,702 5,351
Shareholders' equity 57,486 48,500
-------------- --------------
Total liabilities and shareholders'
equity $265,683 $263,918
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CONTACT: The Middleby Corporation
Darcy Bretz, 847-429-7756
Timothy FitzGerald, 847-429-7744