Exhibit 99.1
The Middleby Corporation Reports Record Third Quarter Results
ELGIN, Ill.--(BUSINESS WIRE)--Nov. 6, 2006--The Middleby
Corporation (NASDAQ:MIDD), a leading worldwide manufacturer of
restaurant and foodservice cooking equipment, today reported record
net sales and earnings for the third quarter ended September 30, 2006.
Net earnings for the third quarter were $12,177,000 or $1.48 per share
on net sales of $103,239,000 as compared to the prior year third
quarter net earnings of $9,628,000 or $1.19 per share on net sales of
$80,937,000. Net earnings for the nine months ended September 30, 2006
were $31,318,000 or $3.79 per share on net sales of $304,837,000 as
compared to net earnings of $24,945,000 or $3.09 per share on net
sales of $239,738,000 in the prior year nine month period.
Third Quarter Financial Highlights
-- Net sales rose 27.6% in the third quarter. The net sales
increase in the third quarter reflects the impact of
acquisitions, which accounted for 20.3% of sales growth for
the quarter. Excluding acquisitions, sales rose 7.3% in the
third quarter, resulting from new product sales and continued
growth in restaurant chain business.
-- Operating income increased by 29.1% to $21,021,000 from
$16,284,000, reflecting the benefit of increased sales. As a
percentage of sales, operating income increased to 20.4% from
20.1% in the prior year, reflecting the impact of increased
operating leverage on higher sales levels. Operating margins
also improved from 19.3% in the second quarter of 2006
reflecting continued improvements in profitability resulting
from integration initiatives associated with the Alkar
RapidPak business unit acquired in December 2005.
-- 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 $238,000 during the
third quarter and a reduction to net earnings of $168,000 or
$0.02 per share. No such expense was recorded in the third
quarter of 2005.
-- Interest expense increased to $1,618,000 in the third quarter
as compared to $1,579,000 in the prior year quarter as
increased interest rates offset the favorable impact of
reduced debt levels.
-- The 2005 and 2006 third quarters both reflect a benefit from
favorable adjustments to tax reserves associated with closed
tax periods. The 2006 third quarter reflected a tax benefit of
$350,000 or $0.04 per share as compared to a tax benefit of
$722,000 or $0.09 per share in the third quarter of 2005.
-- Operating cash flows were utilized to reduce total debt by
$12,115,000 during the third quarter to $97,229,000 as
compared to $109,344,000 at the end of the second quarter of
2006 and $121,595,000 at the beginning of the year. The net
reduction in debt is inclusive of approximately $8.6 million
of debt incurred to fund the acquisition of Houno, which was
completed during the third quarter of 2006.
Mr. Selim A. Bassoul Chairman and Chief Executive Officer said,
"We were very pleased with the results of the third quarter. We
continued to make progress at our newly acquired Alkar Rapidpak
business unit, which contributed favorably to the quarter. In
addition, each of our brands also realized sales growth during the
quarter, resulting from increased business with restaurant chains and
the benefit of new product introductions. As we move into 2007, we
remain excited about the pipeline of new products focused on speed of
cooking, energy savings, and automation."
Mr. Bassoul further commented, "We continue to address the rising
costs of steel and other materials, through supply chain initiatives
and other operating improvements. Despite the unfavorable impact of
increased material costs, we realized gross margin expansion across
the company. This margin improvement was offset by the impact of lower
gross margins at the recent acquisitions, which continue to improve as
integration initiatives are realized."
Mr. Bassoul concluded, "We are also very excited about the
acquisition of Houno A/S announced during the quarter. The acquisition
enables Middleby to further advance its cooking technologies and
expand its product offerings in the growing combi-oven market, a
market which exceeds $400 million worldwide. Houno has revenues of
approximately $10 million concentrated in Denmark, Sweden and the
United Kingdom. Houno's products are known for their advanced control
systems, self cleaning capabilities and unique design. Combined with
Middleby's resources, we will be able to market Houno's products to a
larger audience."
Conference Call
A conference call will be held at 11:00 a.m. Eastern time on
Tuesday, November 7 and can be accessed by dialing (800) 367-5339 and
providing conference code 1389461 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 1389461. 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), Houno(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 Nine Months Ended
3rd Qtr, 3rd Qtr, 3rd Qtr, 3rd Qtr,
2006 2005 2006 2005
--------- --------- --------- ---------
Net sales $103,239 $80,937 $304,837 $239,738
Cost of sales 62,664 48,461 187,011 147,604
--------- --------- --------- ---------
Gross profit 40,575 32,476 117,826 92,134
Selling & distribution expense 10,009 8,710 30,901 25,663
General & administrative
expense 9,545 7,482 30,477 21,847
--------- --------- --------- ---------
Income from operations 21,021 16,284 56,448 44,624
Interest expense and deferred
financing amortization, net 1,618 1,579 5,445 5,063
Other expense (income), net (37) 312 35 47
--------- --------- --------- ---------
Earnings before income
taxes 19,440 14,393 50,968 39,514
Provision for income taxes 7,263 4,765 19,650 14,569
--------- --------- --------- ---------
Net earnings $12,177 $9,628 $31,318 $24,945
========= ========= ========= =========
Net earnings per share:
Basic $1.59 $1.28 $4.11 $3.33
========= ========= ========= =========
Diluted $1.48 $1.19 $3.79 $3.09
========= ========= ========= =========
Weighted average number
shares:
Basic 7,645 7,516 7,629 7,499
========= ========= ========= =========
Diluted 8,248 8,110 8,257 8,060
========= ========= ========= =========
THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
- ----------------------------------------------------------------------
(Amounts in 000's)
(Unaudited)
Sep. 30, 2006 Dec. 31, 2005
------------- -------------
ASSETS
Cash and cash equivalents $3,025 $3,908
Accounts receivable, net 52,611 38,552
Inventories, net 46,507 40,989
Other current assets 4,673 4,513
Prepaid taxes -- 3,354
Deferred tax assets 10,013 10,319
------------- -------------
Total current assets 116,829 101,635
Property, plant and equipment, net 28,346 25,331
Goodwill 100,102 98,757
Other intangibles 35,767 35,498
Other assets 2,418 2,697
------------- -------------
Total assets $283,462 $263,918
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt $16,704 $13,780
Accounts payable 18,749 17,576
Accrued expenses 67,463 62,689
------------- -------------
Total current liabilities 102,916 94,045
Long-term debt 80,525 107,815
Long-term deferred tax liability 10,372 8,207
Other non-current liabilities 6,467 5,351
Shareholders' equity 83,182 48,500
------------- -------------
Total liabilities and shareholders'
equity $283,462 $263,918
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CONTACT: The Middleby Corporation
Darcy Bretz, Investor and Public Relations, 847-429-7756
or
Timothy FitzGerald, Chief Financial Officer, 847-429-7744