Exhibit 99.1
The Middleby Corporation Reports Record Second Quarter Results
ELGIN, Ill.--(BUSINESS WIRE)--Aug. 7, 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 second
quarter ended June 30, 2007. Net earnings for the second quarter were
$12,582,000 or $0.75 per share on net sales of $113,248,000 as compared to the
prior year second quarter net earnings of $11,090,000 or $0.67 per share on net
sales of $104,849,000. Net earnings for the six months ended June 30, 2007 were
$23,302,000 or $1.39 per share on net sales of $218,943,000 as compared to net
earnings of $19,141,000 or $1.16 per share on net sales of $201,598,000 in the
prior year first six months.
On May 3, 2007 the company announced that its Board of Directors approved a
2-for-1 stock split on its common stock. The stock split was paid on June 15,
2007 to Stockholders on record as of the close of business on June 1, 2007. All
references in this press release to net earnings per share and the number of
shares outstanding have been adjusted to reflect this stock split.
Second Quarter Financial Highlights
-- The company completed acquisitions of Jade Range on April 1, 2007 for
$7.3 million and Carter Hoffmann on June 29, 2007 for $16.0 million.
The impact of Jade Range is reflected in the operating results for the
second quarter, however, Carter Hoffmann had no impact the second
quarter operating results as it was completed on the last day of the
quarter.
-- On July 30, 2007 the company announced an end to a work stoppage that
occurred at the Elgin, Illinois conveyor oven production facility. The
work stoppage began on May 17, 2007 after the unionized workforce
failed to ratify a final contract proposal of its expired collective
bargaining agreement. The company entered into a new five year
collective bargaining agreement with the unionized workforce at this
facility which extends through July, 2012.
-- Earnings per share increased 11.9% to $0.75 from $0.67 despite the
adverse impact of the work stoppage at the Elgin, Illinois facility
and the significant increase in the cost of steel during the first
half of 2007. Additionally, the impact of the Houno and Jade
acquisitions, which were completed on August 31, 2006 and April 1,
2007, respectively, reduced earnings per share by $0.01 for the
quarter.
-- Net sales rose 8.0% in the second quarter. The net sales increase
reflects the impact of the Houno and Jade Range acquisitions, which
accounted for 6.8% of the sales growth in the second quarter.
Excluding the impact of acquisitions, sales grew organically 1.2% and
were comprised of a 3.0% increase in commercial foodservice equipment
sales, offset in part by a 9.9% reduction in sales at the food
processing equipment group, which was acquired in December 2005.
-- Sales of commercial foodservice equipment, which rose 3.0%, were
adversely impacted by the work stoppage at the Elgin, Illinois
facility. This work stoppage resulted in reduced sales at this
production facility, which were $5.8 million lower than the prior year
second quarter. Organic sales of commercial foodservice equipment,
excluding the conveyor ovens products affected by the work stoppage,
rose 8.6% during the quarter reflecting continued success of new
product introductions and growth in sales with restaurant chains.
-- Sales of food processing equipment, which declined 9.9%, were lower
than the prior year due to the impact of acquisition integration
initiatives put in place in the first half of 2006 in an effort to
increase profit margins, including increased controls over contract
pricing and product line rationalization. As a result of the
integration initiatives, operating profits at our food processing
equipment group have increased by more than 50% from the prior year
second quarter.
-- Operating income increased by 4.6% to $21,202,000 from $20,279,000.
The increase in operating profits reflects gains in both the
commercial foodservice and food processing equipment businesses,
offset by a reduction in operating income at the Elgin, Illinois
facility resulting from the work stoppage. Operating income at the
Elgin, Illinois facility was $2.9 million lower than the prior year.
Additionally, the recent acquisitions of Jade and Houno resulted in a
reduction to operating income by $0.2 million as these business
operations continue to be integrated within Middleby.
-- Net interest expense decreased to $1,273,000 in the second quarter as
compared to $2,031,000 in the prior year quarter due to reduced debt
levels offset in part by increased interest rates.
-- Total debt at the end of the 2007 second quarter amounted to
$85,428,000 as compared to $109,344,000 at the end of the 2006 second
quarter and $82,802,000 at the beginning of the year. Net borrowing
increased in the first six months as cash flow generated from
operating activities were utilized to fund the second quarter
acquisitions of Jade Range and Carter Hoffmann, which amounted to a
combined $23.3 million. Subsequent to end of the second quarter, the
company also completed acquisitions of MP Equipment and Wells
Bloomfield for $44.0 million in cash.
Selim A. Bassoul Chairman and Chief Executive Officer said, "We were
pleased to report a record second quarter despite the business disruption caused
by the work stoppage at our Middleby Marshall conveyor oven facility, the
significant increase in the cost of steel which impacted profit margins, and the
dilutive impact of the recent acquisitions."
Mr. Bassoul commented, "Excluding the Middleby Marshall conveyor oven
division, the performance of our commercial foodservice operations was strong
and we recognized earnings growth at each of our divisions as a result of new
product sales and productivity improvements. Additionally, operating profits at
our food processing equipment group have increased significantly. The operating
margins at this business unit have improved to a sustainable 20% and tripled as
compared to the results prior to our acquisition of this business."
Mr. Bassoul continued, "We also recently announced that we entered into a
new collective bargaining agreement with the unionized workforce at the Elgin,
Illinois facility, ending a work stoppage that began in mid-May. We are pleased
with the outcome of the new contract, which will allow Middleby to improve
productivity at this facility and provide employees with opportunity to earn
performance-based incentives. Included in this contract was a ratification bonus
and a voluntary retirement program offered to the union employees, which we
anticipate will result in one time payments of approximately $2.0 million to be
incurred during the third quarter. While the work stoppage will continue to have
a similar impact on sales and operating profits in the third quarter, we
anticipate we will return to full production in the fourth quarter."
Mr. Bassoul further added, "We are very excited about the recent
acquisitions we have completed. Since the end of the first quarter we have
completed three acquisitions in the commercial foodservice sector and one
acquisition in the food processing sector. On April 1, 2007, we completed the
acquisition of Jade Range from Maytag Corporation. Jade Range, a leading
manufacturer of commercial ranges and ovens has approximately $20 million in
annual sales and historically reported operating losses of approximately $3
million. We have made significant progress at this division in the first 90 days
and were pleased to report this division reached a break-even level of
profitability by end of the second quarter. We anticipate the results from this
division will be accretive to earnings by the fourth quarter of 2007."
"The recent acquisitions of Carter Hoffmann, Wells Bloomfield, and MP
Equipment further strengthen our portfolio of leading brands in both the
commercial foodservice equipment and food processing equipment sectors. The
combined annual revenues of these business units amount to approximately $85
million. In commercial foodservice equipment, Carter Hoffmann and Wells
Bloomfield provide Middleby with a leading market position in heated holding
cabinets and food warming equipment. We will focus on improving the
profitability of these operations in the second half of this year. Our recent
acquisition of MP Equipment provides a complimentary portfolio of products and
patented technologies to our food processing equipment business as we continue
to develop this platform. We anticipate these acquisitions will be accretive to
earnings in 2008."
Conference Call
A conference call will be held at 10:00 a.m. Eastern time on Wednesday,
August 8 and can be accessed by dialing (800) 367-5339 and providing conference
code 12399695 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 12399695. 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 commercial food cooking, preparation and processing. The
company's leading equipment brands serving the commercial foodservice industry
include Blodgett(R), Blodgett Combi(R), Blodgett Range(R), Bloomfield(R), Carter
Hoffmann(R), CTX(R), Houno(R), Jade(R), MagiKitch'n(R), Middleby Marshall(R),
Nu-Vu(R), Pitco Frialator(R), Southbend(R), Toastmaster(R) and Wells(R). The
company's leading equipment brands serving the food processing industry include
Alkar(R), MP Equipment(R), and RapidPak(R). The Middleby Corporation was
recognized by Business Week as one of the Top 100 Hot Growth Companies of 2007,
by Crain's Chicago Business as one of the Fastest 50 Growth Companies in 2007,
and by Forbes as one of the Best Small Companies in 2006.
For more information about The Middleby Corporation and the company brands,
please 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,
2007 2006 2007 2006
--------- --------- --------- ---------
Net sales $113,248 $104,849 $218,943 $201,598
Cost of sales 68,362 63,122 132,952 124,347
--------- --------- --------- ---------
Gross profit 44,886 41,727 85,991 77,251
Selling & distribution expenses 11,952 10,767 23,068 20,892
General & administrative
expenses 11,732 10,681 22,915 20,932
--------- --------- --------- ---------
Income from operations 21,202 20,279 40,008 35,427
Interest expense and deferred
financing amortization, net 1,273 2,031 2,517 3,827
Other (income), net (630) 165 (737) 72
--------- --------- --------- ---------
Earnings before income
taxes 20,559 18,083 38,228 31,528
Provision for income taxes 7,977 6,993 14,926 12,387
--------- --------- --------- ---------
Net earnings $12,582 $11,090 $23,302 $19,141
========= ========= ========= =========
Net earnings per share:
Basic $0.80 $0.73 $1.50 $1.26
========= ========= ========= =========
Diluted $0.75 $0.67 $1.39 $1.16
========= ========= ========= =========
Weighted average number shares:
Basic 15,641 15,246 15,576 15,240
========= ========= ========= =========
Diluted 16,875 16,528 16,808 16,525
========= ========= ========= =========
THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
- ----------------------------------------------------------------------
(Amounts in 000's)
(Unaudited)
Jun. 30, 2007 Dec. 30, 2006
------------- -------------
ASSETS
Cash and cash equivalents $5,791 $3,534
Accounts receivable, net 56,343 51,580
Inventories, net 58,679 47,292
Prepaid expenses and other 2,536 3,289
Prepaid taxes 342 1,129
Current deferred tax assets 10,851 10,851
------------- -------------
Total current assets 134,542 117,675
Property, plant and equipment, net 32,124 28,534
Goodwill 110,942 101,258
Other intangibles 36,200 35,306
Other assets 2,113 2,249
------------- -------------
Total assets $315,921 $285,022
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt $16,572 $16,838
Accounts payable 24,122 19,689
Accrued expenses 59,114 69,636
------------- -------------
Total current liabilities 99,808 106,163
Long-term debt 68,856 65,964
Long-term deferred tax liability 3,749 5,867
Other non-current liabilities 14,059 6,455
Stockholders' equity 129,449 100,573
------------- -------------
Total liabilities and stockholders'
equity $315,921 $285,022
============= =============
CONTACT: The Middleby Corporation
Darcy Bretz, Investor and Public Relations,
(847) 429-7756
or
Tim Fitzgerald, Chief Financial Officer,
(847) 429-7744