Exhibit 99.1
The Middleby Corporation Reports Record Second Quarter Results
ELGIN, Ill.--(BUSINESS WIRE)--Aug. 3, 2006--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 1, 2006. Net
earnings for the second quarter were $11,090,000 or $1.34 per share on
net sales of $104,849,000 as compared to the prior year second quarter
net earnings of $8,969,000 or $1.11 per share on net sales of
$83,912,000. Net earnings for the six months ended July 1, 2006 were
$19,141,000 or $2.32 per share on net sales of $201,598,000 as
compared to net earnings of $15,317,000 or $1.91 per share on net
sales of $158,801,000 in the prior year first half.
Second Quarter Financial Highlights
-- Net sales rose 25.0% in the second quarter. The net sales
increase in the second quarter reflects the impact of the
acquisition of Alkar Holdings, Inc. ("Alkar") completed in
December 2005, which accounted for 17.7% of sales growth for
the quarter. Excluding the Alkar acquisition, sales rose 7.3%
in the second quarter, reflecting the impact of new product
sales and continued growth in restaurant chain business.
-- Operating income increased by 24.1% to $20,279,000 from
$16,337,000, reflecting the benefit of increased sales and
higher gross margins. As a percentage of sales operating
income decreased to 19.3% from 19.5% in the prior year,
reflecting the impact of lower operating margins associated
with the recently acquired Alkar business.
-- 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. 123r:
"Accounting for Stock Based Compensation", resulting in an
increase to general and administrative expenses of $365,000
during the second quarter and a reduction to net earnings of
$250,000 or $0.03 per share. No such expense was recorded in
the second quarter of 2005.
-- Interest expense increased to $2,031,000 in the second quarter
as compared to $1,698,000 in the prior year quarter as
increased interest rates offset the favorable impact of
reduced debt levels.
-- Operating cash flows were utilized to reduce total debt by
$11,206,000 during the second quarter to $109,334,000 as
compared to $120,540,000 at the end of the first quarter.
Mr. Selim A. Bassoul Chairman and Chief Executive Officer said,
"We were very pleased with the results of the second quarter. We
continue to realize sales growth from increased business with
restaurant chains and from the benefit of new product introductions,
including the Middleby Marshall WOW conveyor oven which we began to
produce and ship during the second quarter. We were also pleased to
introduce several other new products during the quarter, including the
Southbend StratoSteam countertop steamer, the Southbend 500 series
premium range, and a new rotating rack bakery oven from Blodgett. We
remain excited about the continuing pipeline of new products focused
on speed of cooking, energy savings, and automation."
Mr. Bassoul continued, "We were also very proud to have received
the vendor of the year award at our Blodgett division from Pride, a
leading dealer buying group, as well as the YUM! Star Supplier of the
year award at our Pitco division. During the quarter, our NuVu
division also received the National Restaurant Association Kitchen
Innovation Award for its new Rhapsody Combo-bake oven."
Mr. Bassoul further commented, "As anticipated, we began to
realize improvement in profitability at our newly acquired Alkar
Rapidpak business unit as a result of our integration efforts. During
the quarter we announced the promotion of Magdy Albert as the Division
President of Alkar RapidPak. This business will benefit from Magdy's
25 years of engineering and operations experience in the foodservice
industry, including his most recent tenure as Vice President of
Operations and General Manager of our Middleby Marshall division where
he recently oversaw the development of the WOW oven. Under Magdy's
leadership, we are committed to the delivery of innovative products to
the customers of Alkar and Rapidpak."
Mr. Bassoul concluded, "As we move into the second half of the
year, we will monitor the impact of rising costs of steel and fuel,
which are anticipated to impact profit margins. We will make efforts
to offset these rising costs through supply chain initiatives and
other operating improvements."
Conference Call
A conference call will be held at 11:00 a.m. Eastern time on
Friday, August 4 and can be accessed by dialing (800) 367-5339 and
providing conference code 4068362 or through the investor relations
section of The Middleby Corporation website 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 4068362. 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 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 Six Months Ended
2nd Qtr, 2nd Qtr, 2nd Qtr, 2nd Qtr,
2006 2005 2006 2005
---------- ---------- ---------- ----------
Net sales $104,849 $83,912 $201,598 $158,801
Cost of sales 63,122 51,326 124,347 99,143
---------- ---------- ---------- ----------
Gross profit 41,727 32,586 77,251 59,658
Selling & distribution
expense 10,767 8,769 20,892 16,953
General & administrative
expense 10,681 7,480 20,932 14,365
---------- ---------- ---------- ----------
Income from operations 20,279 16,337 35,427 28,340
Interest expense and
deferred financing
amortization, net 2,031 1,698 3,827 3,484
Loss (gain) on acquisition
financing Derivatives - - - -
Other expense (income),
net 165 (62) 72 (265)
---------- ---------- ---------- ----------
Earnings before income
taxes 18,083 14,701 31,528 25,121
Provision for income taxes 6,993 5,732 12,387 9,804
---------- ---------- ---------- ----------
Net earnings $11,090 $8,969 $19,141 $15,317
========== ========== ========== ==========
Net earnings per share:
Basic $1.45 $1.19 $2.51 $2.04
========== ========== ========== ==========
Diluted $1.34 $1.11 $2.32 $1.91
========== ========== ========== ==========
Weighted average number
shares:
Basic 7,623 7,508 7,620 7,490
========== ========== ========== ==========
Diluted 8,264 8,050 8,261 8,035
========== ========== ========== ==========
THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(Amounts in 000's)
(Unaudited)
Jul. 1, 2006 Dec. 31, 2005
------------ -------------
ASSETS
Cash and cash equivalents $3,156 $3,908
Accounts receivable, net 47,908 38,552
Inventories, net 43,769 40,989
Other current assets 6,581 4,513
Prepaid taxes -- 3,354
Deferred tax assets 11,428 10,319
------------- -------------
Total current assets 112,842 101,635
Property, plant and equipment, net 24,509 25,331
Goodwill 98,832 98,757
Other intangibles 34,895 35,498
Other assets 3,061 2,697
------------- -------------
Total assets $274,139 $263,918
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt $15,337 $13,780
Accounts payable 19,779 17,576
Accrued expenses 58,977 62,689
------------- -------------
Total current liabilities 94,093 94,045
Long-term debt 94,007 107,815
Long-term deferred tax liability 9,200 8,207
Other non-current liabilities 6,338 5,351
Shareholders' equity 70,501 48,500
------------- -------------
Total liabilities and shareholders'
equity $274,139 $263,918
============= =============
CONTACT: The Middleby Corporation
Darcy Bretz, 847-429-7756
Timothy FitzGerald, 847-429-7744