The Middleby Corporation Reports First Quarter Results

The Middleby Corporation (NASDAQ: MIDD), a leading worldwide manufacturer of equipment for the commercial foodservice and food processing industries, today reported net sales and earnings for the first quarter ended March 31, 2012. Net earnings for the first quarter were $22,095,000 or $1.20 per share on net sales of $228,823,000 as compared to the prior year first quarter net earnings of $17,825,000 or $0.97 per share on net sales of $182,572,000.

2012 First Quarter Financial Highlights

• Net sales increased 25.3% in the first quarter as compared to the prior year first quarter. Sales from acquisitions amounted to $36.5 million or 20.0% during the quarter. Excluding the impact of acquisitions, sales increased 5.4% during the first quarter.
• Net sales at the company’s Commercial Foodservice Equipment Group increased 16.0% in the first quarter as compared to the prior year first quarter. During fiscal 2011, the company completed the acquisitions of Beech and Lincat. Excluding the impact of these acquisitions, sales increased 6.2% in the first quarter.
• Net sales at the company’s Food Processing Equipment Group increased 75.3% in the first quarter as compared to the prior year first quarter. During fiscal 2011, the company completed the acquisitions of Auto-Bake, Maurer-Atmos, Danfotech, Drake and Armor Inox. During fiscal 2012, the company completed the acquisition of Turkington. Excluding the impact of the acquisitions, sales increased by 1.3% in the first quarter.
• Gross profit in the first quarter increased to $87.5 million from $71.8 million and the gross margin rate decreased from 39.3% from 38.2%. The decline in the gross margin rate reflects a higher mix of sales at the Food Processing Equipment Group, which have comparatively lower margin due in part to the recent acquisitions.
• Operating income increased 16.9% in the first quarter to $36.7 million from $31.4 million in the prior year quarter.
• Non-cash expenses during the first quarter of 2012 amounted to $9.8 million, including $2.1 million of depreciation, $5.0 million of intangible amortization and $2.7 million of non-cash share based compensation.
• Provisions for income taxes amounted to $11.2 million at a 33.7% effective rate in comparison to $11.6 million at a 39.5% effective rate in the prior year quarter. The first quarter tax provision reflects favorable reserve adjustments related to the reduction of state tax exposures and increased deductions for U.S. manufacturing activities.
• Total debt at the end of the 2012 first quarter amounted to $316.6 million as compared to $317.3 million at the end of 2011. The company’s debt is financed primarily under its $600.0 million senior revolving credit facility, which matures in December 2012. The company is currently in discussion with its banking partners and expects to enter into a similarly structured facility.

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