Exhibit 99.1
The Middleby Corporation Reports Record Third Quarter Results
ELGIN, Ill.--(BUSINESS WIRE)--Nov. 8, 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 third
quarter ended September 29, 2007. Net earnings for the third quarter were
$14,056,000 or $0.83 per share on net sales of $135,996,000 as compared to the
prior year third quarter net earnings of $12,177,000 or $0.74 per share on net
sales of $103,239,000. Net earnings for the nine months ended September 29, 2007
were $37,358,000 or $2.22 per share on net sales of $354,939,000 as compared to
net earnings of $31,318,000 or $1.90 per share on net sales of $304,837,000 in
the prior year first nine months.
Third Quarter Financial Highlights
-- The company completed acquisitions of MP Equipment on July 2, 2007 for
$17.0 million and Wells Bloomfield on August 3, 2007 for $28.4
million. The impact of these acquisitions is reflected in the
operating results for the third quarter of 2007. Additionally, as
previously reported, the company acquired Jade Range and Carter
Hoffmann in the second quarter of 2007.
-- 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 12.2% to $0.83 from $0.74 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
nine months of 2007. The third quarter results included a one-time
pre-tax charge of $0.9 million associated with a workforce reduction
at the Elgin production facility, which reduced diluted earnings per
share by $0.03. Current year acquisitions did not materially impact
earnings per share.
-- Net sales rose 31.7% in the third quarter. The net sales increase
reflects the impact of the Houno, Jade Range, Carter-Hoffmann, MP
Equipment and Wells Bloomfield acquisitions, which accounted for 25.8%
of the sales growth in the third quarter. Excluding the impact of
acquisitions, sales grew organically 5.9% and were comprised of an
8.3% increase in commercial foodservice equipment sales, offset in
part by a 7.6% reduction in sales at the food processing equipment
group, which was acquired in December 2005.
-- Sales of commercial foodservice equipment, which rose 8.3%, 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 $2.7 million lower than the prior year
third quarter. Organic sales of commercial foodservice equipment,
excluding the impact of lower sales at the Elgin facility affected by
the work stoppage, rose 14.4% during the quarter reflecting continued
success of new product introductions and growth in sales with
restaurant chains.
-- Sales of food processing equipment, which declined by 7.6%, were
adversely affected by the impact of acquisition integration
initiatives put in place in an effort to increase profit margins,
including increased controls over contract pricing and product line
rationalization. These initiatives contributed to a significant
increase in profitability at this business unit.
-- Operating income increased by 20.9% to $25,424,000 from $21,021,000.
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. Additionally, current year
acquisitions contributed $1.8 million to operating income during the
third quarter.
-- Total debt at the end of the 2007 third quarter amounted to
$107,848,000 as compared to $85,428,000 at the end of the 2007 second
quarter and $82,802,000 at the beginning of the year. Net borrowing
increased in the first nine 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 in cash and the third quarter 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 third quarter despite the significant increase in the
cost of steel and the business disruption caused by the work stoppage at our
Middleby Marshall conveyor oven facility that began in mid-May."
Mr. Bassoul continued, "During the quarter, we entered into a new
collective bargaining agreement with the unionized workforce at the Elgin,
Illinois facility, ending the work stoppage. We are pleased with the outcome of
the new contract, which will allow Middleby to significantly improve
productivity at this facility as we increase production to normalized levels in
2008."
Mr. Bassoul commented, "Excluding the Middleby Marshall conveyor oven
division, the performance of our commercial foodservice operations continued to
be 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 continued to improve. Despite the
reduction in sales during the quarter, profits of this business increased more
than 10% from the prior year quarter and operating margins have improved to a
sustainable 20%."
Mr. Bassoul further added, "We are very excited about the acquisitions we
have completed this year, including 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 six months and expect this division to reach operating
profits in excess of 10% for the year, ahead of original expectations."
"The third quarter 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 revenues of these business units amount to approximately $20 million
during the quarter at an operating profit approaching 5%. We will focus on
improving the profitability of these operations in the fourth quarter of this
year and expect these businesses to reach operating profit margins in excess of
10% by year end. We anticipate these acquisitions will be accretive to earnings
in 2008."
Conference Call
A conference call will be held at 11:00 a.m. Eastern time on Friday,
November 9 and can be accessed by dialing (800) 367-5339 and providing
conference code 23301034 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 23301034. 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 Nine Months Ended
3rd Qtr, 3rd Qtr, 3rd Qtr, 3rd Qtr,
2007 2006 2007 2006
--------- --------- --------- ---------
Net sales $135,996 $103,239 $354,939 $304,837
Cost of sales 84,600 62,664 217,552 187,011
--------- --------- --------- ---------
Gross profit 51,396 40,575 137,387 117,826
Selling & distribution expenses 13,507 10,009 36,575 30,901
General & administrative
expenses 12,465 9,545 35,380 30,477
--------- --------- --------- ---------
Income from operations 25,424 21,021 65,432 56,448
Interest expense and deferred
financing amortization, net 1,621 1,618 4,138 5,445
Other (income), net (316) (37) (1,053) 35
--------- --------- --------- ---------
Earnings before income
taxes 24,119 19,440 62,347 50,968
Provision for income taxes 10,063 7,263 24,989 19,650
--------- --------- --------- ---------
Net earnings $14,056 $12,177 $37,358 $31,318
========= ========= ========= =========
Net earnings per share:
Basic $0.89 $0.80 $2.39 $2.05
========= ========= ========= =========
Diluted $0.83 $0.74 $2.22 $1.90
========= ========= ========= =========
Weighted average number shares:
Basic 15,743 15,290 15,632 15,258
========= ========= ========= =========
Diluted 16,934 16,496 16,857 16,514
========= ========= ========= =========
THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
- ----------------------------------------------------------------------
(Amounts in 000's)
(Unaudited)
Sep. 29, 2007 Dec. 30, 2006
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ASSETS
Cash and cash equivalents $7,616 $3,534
Accounts receivable, net 69,698 51,580
Inventories, net 68,325 47,292
Prepaid expenses and other 8,156 3,289
Prepaid taxes 977 1,129
Current deferred tax assets 11,449 10,851
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Total current assets 166,221 117,675
Property, plant and equipment, net 36,141 28,534
Goodwill 129,241 101,258
Other intangibles 53,844 35,306
Other assets 1,849 2,249
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Total assets $387,296 $285,022
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt $16,765 $16,838
Accounts payable 32,825 19,689
Accrued expenses 84,236 69,636
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Total current liabilities 133,826 106,163
Long-term debt 91,083 65,964
Long-term deferred tax liability 5,240 5,867
Other non-current liabilities 9,456 6,455
Stockholders' equity 147,691 100,573
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Total liabilities and stockholders'
equity $387,296 $285,022
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CONTACT: The Middleby Corporation
Darcy Bretz, Investor and Public Relations,
(847) 429-7756
or
Tim Fitzgerald, Chief Financial Officer,
(847) 429-7744