The Middleby Corporation (NASDAQ: MIDD), a leading worldwide manufacturer of equipment for the commercial foodservice, food processing and residential kitchen equipment industries, today reported net sales and earnings for the third quarter ended September 28, 2013. Net earnings for the third quarter were $40,942,000 or $2.18 per share on net sales of $360,013,000 as compared to the prior year third quarter net earnings of $29,769,000 or $1.60 per share on net sales of $257,699,000.
2013 Third Quarter Financial Highlights
- Net sales increased 39.7% in the third quarter of 2013 as compared to the prior year third quarter. Sales from acquisitions amounted to $71.8 million or 27.9% during the quarter. Excluding the impact of acquisitions, sales increased 11.8% during the third quarter.
- Net sales at the company’s Commercial Foodservice Equipment Group increased 16.2% in the third quarter of 2013 as compared to the prior year third quarter. During fiscal 2012, the company completed the acquisition of Nieco. Excluding the impact of this acquisition, net sales increased by 11.7%.
- Net sales at the company’s Food Processing Equipment Group increased 20.5% in the third quarter of 2013 as compared to the prior year third quarter. During fiscal 2012, the company completed the acquisition of Stewart Systems. Excluding the impact of this acquisition, net sales increased by 12.2% in the third quarter.
- Net sales at the company’s Residential Kitchen Equipment Group, which was established on December 31, 2012 in conjunction with the acquisition of Viking, were $58.0 million.
- Gross profit increased to $141.4 million in the third quarter of 2013 from $100.4 million in the prior year third quarter, reflecting impact of higher sales volumes. The gross margin rate increased from 39.0% in the third quarter of 2012 to 39.3% in the third quarter of 2013. Increased margins at the commercial foodservice segment offset lower margins of newly acquired food processing and Viking businesses.
- Operating income increased 42.4% to $67.5 million in the third quarter of 2013 from $47.4 million in the prior year third quarter.
- Non-cash expenses included in operating income increased to $11.9 million in the third quarter of 2013 as compared to $9.7 million in the prior year third quarter. Non-cash expenses during the 2013 third quarter were comprised of $4.2 million of depreciation, $4.7 million of intangible amortization and $3.0 million of non-cash share based compensation.
- Total debt at the end of the 2013 third quarter was reduced to $537.4 million as compared to $618.0 million at the end of the second quarter, as cash generated from operations were utilized to repay debt. The company’s debt is financed primarily under its $1 billion senior revolving credit facility, which expires in August 2017.
Selim A. Bassoul, Chairman and Chief Executive Officer, commented, “In the third quarter, at our Commercial Foodservice Equipment Group, we realized continued growth with chain restaurant customers adopting our new innovative technologies resulting in improvements in the efficiency of restaurant operations. We also continued to realize growth in international markets as our customers expand restaurant operations in emerging markets.”
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