The Middleby Corporation (NASDAQ: MIDD), a leading worldwide manufacturer of restaurant and foodservice cooking equipment, today reported net sales and earnings for the first quarter ended April 2, 2011. Net earnings for the first quarter were $17,825,000 or $0.97 per share on net sales of $182,572,000 as compared to the prior year first quarter net earnings of $13,762,000 or $0.74 per share on net sales of $160,683,000.
2011 First Quarter Financial Highlights
- Net sales increased 13.6 % in the first quarter. Sales from acquisitions amounted to $10.2 million or 6.3% during the quarter, and largely related to the Cozzini acquisition which occurred late in the third quarter of 2010. Excluding the impact of acquisitions, net sales increased 7.3% during the first quarter, including an increase of 8.8% in sales from the Commercial Foodservice Group offset by a decrease of 2.9% in sales from the Food Processing Group. Sales growth of the Commercial Foodservice Group continues to grow reflecting growth in the international markets and increasing business with major restaurant chain customers. The Food Processing Group, which grew 56.6% in the first quarter of last year, declined slightly, reflecting the quarterly volatility associated with this business due to the timing of large orders.
- Gross profit increased to $71.8 million from $63.5 million. The gross margin rate of 39.3% compared to 39.5% in the prior year quarter. The gross margin rate reflects the impact of increasing material costs and lower margins at newly acquired companies offset in part by the benefit of increased sales volumes and operational improvements.
- Operating income increased to $31.4 million from $26.4 million.
- Non-cash expenses recorded during the first quarter included $3.9 million of depreciation and amortization in the current quarter as compared to $3.7 million in the prior year first quarter. Non-cash share based compensation expenses decreased to $2.0 million in the 2011 first quarter as compared to $3.2 million in the 2010 first quarter.
- Net interest expense and deferred financing costs amounted to $2.1 million in the first quarter as compared to $2.5 million in the prior year first quarter. Reduced interest expense reflects the benefit of lower interest rates and lower debt levels.
- Provisions for income taxes increased to $11.6 million at a 40% effective rate in comparison to $9.9 million at a 42% effective rate in the prior year quarter.
- Total debt at the end of the 2011 first quarter amounted to $239.6 million as compared to $271.0 million at the end of the first quarter 2010. The company’s debt is financed under a $497.8 million senior revolving credit facility that matures in December 2012.
- Net earnings per share in the 2011 first quarter increased 31% to $0.97 per share as compared to $0.74 per share in the 2010 first quarter.
Mr. Bassoul commented, “In the first quarter, at our Commercial Foodservice Group, industry conditions remained positive and we realized revenue gains resulting from growth in international business and with our chain customers. We plan to continue investing in our selling organization to support sales of our expanded line of new and acquired products globally. This includes the recent establishment of our sales and service office in Brazil to support the anticipated growth in this market over the next several years.”
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