EXHIBIT 99.1
The Middleby Corporation Reports Record First Quarter Results and
Announces 2-for-1 Stock Split
ELGIN, Ill.--(BUSINESS WIRE)--May 3, 2007--The Middleby
Corporation (NASDAQ:MIDD), a leading worldwide manufacturer of
restaurant and foodservice cooking equipment, today reported record
net sales and earnings for the first quarter ended March 31, 2007. Net
earnings for the first quarter were $10,720,000 or $1.28 per share on
net sales of $105,695,000 as compared to the prior year first quarter
net earnings of $8,051,000 or $0.97 per share on net sales of
$96,749,000.
The company also today announced that its Board of Directors has
approved a 2-for-1 stock split on its common stock. The 2-for-1 split
will be effected as a stock dividend. Stockholders as of the close of
business on June 1, 2007, will be issued one additional share for each
share of common stock held on the record date, with a payment date of
June 15, 2007. The stock split will increase the number of shares
outstanding from approximately 7.8 million to approximately 15.6
million shares.
First Quarter Financial Highlights
-- Net sales rose 9.2% in the first quarter. The net sales
increase reflects the impact of the Houno acquisition, which
accounted for 3.7% of the sales growth in the first quarter.
Excluding the impact of acquisition, sales grew organically
5.5%, reflecting an 8.2% increase in the commercial
foodservice equipment sales offset in part by a 10.9%
reduction in sales of the food processing equipment segment,
which was acquired in December 2005. The increase in
commercial foodservice equipment sales reflects continued
success of new product introductions and growth in sales with
restaurant chains. The reduction in food processing equipment
sales reflects the impact of integration initiatives put in
place shortly after the December 2005 acquisition to increase
profit margins, including increased controls over contract
pricing and product line rationalization.
-- Operating income increased by 24.1% to $18,806,000 from
$15,148,000, reflecting the benefit of increased sales. As a
percentage of sales, operating income increased to 17.8% from
15.7% in the prior year, reflecting increased margins at the
food processing segment and the impact of increased operating
leverage on higher volumes. This margin improvement was offset
in part by the impact of rising steel costs.
-- Net interest expense decreased to $1,244,000 in the first
quarter as compared to $1,796,000 in the prior year quarter
due to reduced debt levels offset in part by increased
interest rates.
-- Earnings per share increased 32.0% to $1.28 from $0.97 as a
result of the increase in net sales and improvements in
operating profit margins.
-- Total debt at the end of the 2007 first quarter amounted to
$87,481,000 as compared to $120,540,000 at the end of the 2006
first quarter and $82,802,000 at the beginning of the year.
Increased borrowings from the beginning of the year were
utilized to fund increased working capital levels moving into
the peak seasonal periods and to fund the payment of 2006
customer rebate programs and employee incentive obligations
paid during the first quarter of 2007.
Selim A. Bassoul Chairman and Chief Executive Officer said, "We
were pleased with the results of the first quarter of 2007. We
continued to realize sales and earnings growth across our brands,
fueled in part by increased sales of new products. During the first
quarter we were pleased to introduce our newest Middleby Marshall
conveyor oven at the Pizza Expo 2007. The space savings platform of
the Mini-WOW! oven has a 40" bake chamber and is 35% faster and 30%
more energy efficient than prior models of this size. During the
second quarter we will be demonstrating several new products at the
National Restaurant Association show, including the Blodgett
Hydrovection oven and the Pitco Soltsice Rethermalizer, both which
have won the Kitchen Innovation award from the National Restaurant
Association."
Mr. Bassoul further commented, "We were also pleased with the
continuing progress made at our acquisitions. We continued to realize
significant improvement in profitability at our Alkar Rapidpak
business unit acquired in December 2005. Although we realized a
reduction in sales at this business unit as compared to the prior year
first quarter, we more than doubled the operating profits as compared
to the prior year quarter. We expect that sales in upcoming quarters
will continue to be lower than the prior year due to acquisition
related initiatives that were put in place during 2006 to eliminate
unprofitable sales."
Mr. Bassoul added, "On April 1, 2007, we completed the acquisition
of Jade Range from Maytag Corporation. This acquisition further
strengthens Middleby's position in ranges and ovens with a leading
industry brand. This acquired business has approximately $20 million
in annual sales and operating losses of approximately $3 million.
Although we anticipate this transaction will be dilutive to the 2007
results, we are taking initiatives to reduce the losses at this
business. We expect to realize continued improvement in the
profitability at this division throughout 2007 and anticipate this
transaction will be accretive to earnings in 2008."
Mr. Bassoul concluded, "As we progress into 2007, we continue to
face the challenge of increasing steel costs which will place pressure
on our profit margins. We will make efforts to offset rising material
costs by continuing to increase operating efficiencies. We will
continue to invest in development and introduction of new products
focused on speed of cooking and energy savings. We will also continue
to pursue acquisitions of leading brands and technologies in the
commercial foodservice and food processing industries."
Conference Call
A conference call will be held at 11:00 a.m. Eastern time on
Friday, May 4 and can be accessed by dialing (800) 367-5339 and
providing conference code 8220595 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 8220595. 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), Jade(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, 2007 1st Qtr, 2006
------------- -------------
Net sales $105,695 $96,749
Cost of sales 64,590 61,225
------------- -------------
Gross profit 41,105 35,524
Selling & distribution expenses 11,116 10,125
General & administrative expenses 11,183 10,251
------------- -------------
Income from operations 18,806 15,148
Interest expense and deferred financing
amortization, net 1,244 1,796
Other (income), net (107) (93)
------------- -------------
Earnings before income taxes 17,669 13,445
Provision for income taxes 6,949 5,394
------------- -------------
Net earnings $10,720 $8,051
============= =============
Net earnings per share:
Basic $1.38 $1.06
============= =============
Diluted $1.28 $0.97
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Weighted average number shares:
Basic 7,755 7,618
============= =============
Diluted 8,370 8,268
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THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
- ----------------------------------------------------------------------
(Amounts in 000's)
(Unaudited)
Mar. 31, 2007 Dec. 30, 2006
-------------- -------------
ASSETS
Cash and cash equivalents $4,053 $3,534
Accounts receivable, net 53,749 51,580
Inventories, net 52,146 47,292
Prepaid expenses and other 1,831 3,289
Prepaid taxes 3,193 1,129
Current deferred tax assets 10,061 10,851
-------------- -------------
Total current assets 125,033 117,675
Property, plant and equipment, net 28,275 28,534
Goodwill 101,247 101,258
Other intangibles 34,963 35,306
Other assets 2,055 2,249
-------------- -------------
Total assets $291,573 $285,022
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt $16,347 $16,838
Accounts payable 20,618 19,689
Accrued expenses 59,954 69,636
-------------- -------------
Total current liabilities 96,919 106,163
Long-term debt 71,134 65,964
Long-term deferred tax liability 2,665 5,867
Other non-current liabilities 6,734 6,455
Stockholders' equity 114,121 100,573
-------------- -------------
Total liabilities and stockholders'
equity $291,573 $285,022
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CONTACT: The Middleby Corporation
Timothy FitzGerald, Chief Financial Officer, 847-429-7744