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 second quarter ended June 28, 2014. Net earnings for the second quarter were $48,405,000 or $0.85 per share on net sales of $424,776,000 as compared to the prior year second quarter net earnings of $37,163,000 or $0.67 per share on net sales of $363,801,000.
2014 Second Quarter Financial Highlights
- Net sales increased 16.8% compared to the prior year second quarter. Excluding the impact of acquisitions, sales increased 11.0% during the second quarter.
- Net sales at the company’s Commercial Foodservice Equipment Group increased by $40.9 million, or 18.3%, to $263.9 million in the second quarter as compared to $223.0 million the prior year second quarter. During fiscal 2013, the company completed the acquisitions of Wunder-Bar and Celfrost. During fiscal 2014, the company completed the acquisition of Market Forge. Excluding the impact of these acquisitions, net sales increased by 10.2% in the second quarter.
- Net sales at the company’s Food Processing Equipment Group increased by $8.0 million, or 9.8%, to $89.9 million in the second quarter as compared to $81.9 million the prior year second quarter. During fiscal 2014, the company completed the acquisition of Process Equipment Solutions. Excluding the impact of this acquisition, net sales increased by 6.2% in the second quarter.
- Net sales at the company’s Residential Kitchen Equipment Group increased by $12.1 million, or 20.6%, to $70.9 million in the second quarter of 2014 as compared to $58.8 million in prior year second quarter.
- Gross profit in the second quarter increased to $166.2 million from $136.6 million, reflecting the impact of higher sales volumes. The gross margin rate increased from 37.5% to 39.1%. The increase in the gross margin rate from the prior year reflects improved margins at the Food Processing Equipment Group and Viking resulting from integration initiatives implemented during 2013 and 2014.
- Operating income increased in the second quarter by 25.5% in the second quarter to $75.7 million from $60.3 million in the prior year second quarter. Operating income included $1.3 million of non-recurring charges associated with the integration of the acquired Viking distribution operations.
- Non-cash expenses included in operating income during the second quarter of 2014 increased to $15.3 million as compared to $14.4 million in the prior year second quarter. Non-cash expenses during the 2014 second quarter were comprised of $3.8 million of depreciation, $6.7 million of intangible amortization and $4.8 million of non-cash share based compensation.
- Total debt at the end of the 2014 second quarter amounted to $592.7 million as compared to $655.4 million at the end of the first quarter, as cash generated from operations were utilized to repay debt.
Selim A. Bassoul Chairman and Chief Executive Officer, commented, “We continued to realize solid growth at both our Commercial Foodservice and Food Processing businesses. Increased sales in both businesses reflect demand from customers adopting new technologies to improve the efficiency of their operations and continued growth in demand from international markets.”
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