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The Middleby Corporation Reports Fourth Quarter And Full Year Results

Stocks in this article: MIDD

The Middleby Corporation (NASDAQ: MIDD), a leading worldwide manufacturer of equipment for the commercial foodservice, food processing, and residential kitchen industries, today reported net sales and earnings for the fourth quarter and full fiscal year ended December 28, 2013. Net earnings for the fourth quarter were $49,921,000 or $2.62 diluted earnings per share on net sales of $377,420,000 as compared to the prior year fourth quarter net earnings of $37,788,000 or $2.03 diluted earnings per share on net sales of $291,612,000. Net earnings for the fiscal year ended December 28, 2013 were $153,928,000 or $8.21 diluted earnings per share on net sales of $1,428,685,000 as compared to net earnings of $120,697,000 or $6.49 diluted earnings per share on net sales of $1,038,174,000 in the prior year.

2013 Fourth Quarter and Full Year Financial Highlights

  • Net sales increased 29.4% in the fourth quarter and 37.6% for the full fiscal year of 2013 over the comparative prior year periods. Excluding the impact of acquisitions, sales increased 8.6% during the fourth quarter and 10.4% for the full year.
  • Net sales at the company’s Commercial Foodservice Equipment Group increased 14.7% in the fourth quarter and 13.9% for the full fiscal year of 2013 over the comparative 2012 periods. During fiscal 2012, the company completed the acquisition of Nieco. During fiscal 2013, the company completed the acquisitions of Celfrost and Wunder-Bar. Excluding the impact of these acquisitions, sales increased 12.6% in the fourth quarter and 11.1% for the full year.
  • Net sales at the company’s Food Processing Equipment Group decreased 2.2% in the fourth quarter but increased 19.7% for the full fiscal year of 2013 as compared to 2012. During fiscal 2012, the company completed the acquisitions of Baker Thermal Solutions and Stewart Systems. Excluding the impact of the acquisitions, sales decreased by 2.2% in the fourth quarter but increased 8.3% for the full year. The prior year fourth quarter included several large customer orders.
  • 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 $56.2 million in the fourth quarter and $231.7 million for the full fiscal year.
  • Gross profit in the fourth quarter increased to $150.7 million from $113.2 million and the gross margin rate increased to 39.9% from 38.8%. For the full fiscal year of 2013, gross profit increased to $550.0 million from $403.0 million and the gross margin rate decreased to 38.5% from 38.8%. The gross margin rate for the full fiscal year reflects lower gross profit margins at the newly acquired Viking business, which steadily improved during the year.
  • Operating income increased 26.9% in the fourth quarter to $74.5 million from $58.7 million in the prior year quarter and increased 30.0% for the full fiscal year of 2013 to $244.5 million from $188.1 million in the prior year.
  • Non-cash expenses during the fourth quarter of 2013 amounted to $10.8 million, including $0.9 million of depreciation, $6.9 million of intangible amortization and $3.0 million of non-cash share based compensation. Non-cash expenses for the full fiscal year of 2013 amounted to $53.9 million including $13.5 million of depreciation, $28.5 million of intangible amortization and $11.9 million of non-cash stock based compensation.
  • The provision for income taxes in the fourth quarter amounted to $19.6 million at a 28.2% effective rate in comparison to $17.9 million at a 32.2% effective rate in the prior year quarter. For the full fiscal year of 2013, the provision for income taxes amounted to $71.9 million at 31.8% effective rate in comparison to $53.7 million at a 30.8% effective rate in the prior year.
  • Operating cash flows amounted to $62.6 million during the fourth quarter and $146.2 million for the full fiscal year of 2013. Operating cash flows for the full year increased in comparison to $128.3 million in the prior year.
  • Total debt at the end of 2013 fiscal fourth quarter amounted to $571.6 million as compared to $537.4 million at the end of the third quarter and $260.1 million at the end of fiscal 2012. The net increase in debt reflects acquisition related financing of $466.6 million during the year, including the acquisition of Viking for $361.7 million.

Selim A. Bassoul Chairman and Chief Executive Officer, commented, “For 2013 we reported positive financial results at all three of our business segments and continued to strengthen the competitive positions for each of these three platforms.”

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