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 first quarter ended March 29, 2014. Net earnings for the first quarter were $33,445,000 or $1.78 diluted earnings per share on net sales of $372,478,000 as compared to the prior year first quarter net earnings of $25,902,000 or $1.39 diluted earnings per share on net sales of $327,451,000.2014 First Quarter Financial Highlights
- Net sales increased 13.8% compared to the prior year first quarter. Excluding the impact of acquisitions, sales increased 8.0% during the first quarter of 2014.
- Net sales at the company’s Commercial Foodservice Equipment Group increased $36.7 million, or 18.6%, to $234.1 million in the first quarter as compared to $197.4 million the prior year first quarter. During fiscal 2013, the company completed the acquisitions of Celfrost and Wunder-Bar. During fiscal 2014, the company completed the acquisition of Market Forge. Excluding the impact of these acquisitions, sales increased 9.0% in the first quarter.
- Net sales at the company’s Food Processing Equipment Group increased by $4.2 million, or 5.9%, to $75.6 million in the first quarter as compared to $71.4 million the prior year first quarter.
- Net sales at the company’s Residential Kitchen Equipment Group increased by $4.1 million, or 7.0%, to $62.8 million in the first quarter as compared to $58.7 million in the prior year first quarter.
- Gross profit in the first quarter increased to $143.0 million from $121.3 million, reflecting the impact of higher sales volumes. The gross margin rate increased to 38.4% from 37.0%. The increase in the gross margin rate from the prior year reflects improved margins at Viking resulting from integration initiatives implemented during 2013, however, this margin improvement was offset in part by the adverse effect of the Viking distribution changes that were finalized during the first quarter.
- Operating income increased 32.5% in the first quarter to $55.9 million from $42.2 million in the prior year quarter. Operating income included $2.6 million of non-recurring charges associated with the integration of the acquired Viking distribution operations.
- Non-cash expenses included in operating income during the first quarter of 2014 amounted to $12.2 million, including $3.7 million of depreciation, $6.6 million of intangible amortization and $1.9 million of non-cash share based compensation.
- A tax provision of $17.6 million, at an effective rate of 34.5%, was recorded during the first quarter 2014, as compared to a $12.6 million provision at a 32.8% effective rate in the prior year quarter.
- Total debt at the end of the first quarter amounted to $655.4 million as compared to $571.6 million at the end of the fiscal 2013. The net increase in debt includes acquisition related financing related to Market Forge and the Viking distributors acquired during the first quarter.