The Middleby Corporation Reports Third Quarter Results

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.”

Mr. Bassoul continued, “We also continued to realize revenue growth at our Food Processing Equipment Group as food processors continue to expand and modernize existing plant operations through investments in new equipment innovations. We also continue to develop new business opportunities with customers developing processing operations in emerging markets due to increasing demand for pre-cooked and pre-processed foods. In the fourth quarter of 2012 we realized sales growth of 30% due to certain large orders, and as a result will have a challenging 2013 fourth quarter comparison. However, we remain positive on the overall trends and prospects of this segment of our business.”

Mr. Bassoul further commented, “At Viking, we continued to make progress on our integration initiatives. This is reflected in our continued improvement in EBITDA margins, which increased to over 18% in the third quarter and remain on track with our established profitability targets.”

“At Viking, we made significant progress with initiatives related to changes in distribution and new product development. In conjunction with these efforts, we continued to integrate several former U.S. distributors into the Viking organization. Now over 50% of the domestic revenues are managed through Viking owned distribution. These distribution changes will allow us to control and enhance critical aspects of the sales, marketing and customer support processes. We expect to complete our reorganization of the domestic distribution channels in the upcoming quarters,” said Mr. Bassoul. “We are also very excited about the significant pipeline of new Viking products and product enhancements scheduled for introduction in the fourth quarter. This includes a complete new lineup of ranges, cooktops, built-in refrigeration and ventilation.”

Mr. Bassoul concluded, “We were also very pleased to recently announce the acquisition of Celfrost to add to our portfolio of Commercial Foodservice Equipment brands. With this acquisition, Middleby further strengthens its presence in the fast growing market of India and expands product offerings in India to include complementary cold side products alongside our cooking and warming brands. Celfrost has an extensive marketing and service network in India, including 15 brand centers that we will strategically leverage to support Middleby’s entire portfolio of commercial foodservice equipment brands in the market.”

Conference Call

A conference call will be held at 9:00 a.m. Central time on Wednesday, November 6, 2013 and can be accessed by dialing (877) 303-6993 and providing conference code 93864716# or through the investor relations section of The Middleby Corporation website at www.middleby.com. An audio replay of the call will be available approximately 2 hours after its completion and can be accessed by calling (855) 859-2056 and providing code 93864716#.

Statements in this press release or otherwise attributable to the Company regarding the Company's business which are not historical fact are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company cautions investors that such statements are estimates of future performance and are highly dependent upon a variety of important factors that could cause actual results to differ materially from such statements. Such factors include variability in financing costs; quarterly variations in operating results; dependence on key customers; international exposure; foreign exchange and political risks affecting international sales; changing market conditions; the impact of competitive products and pricing; the timely development and market acceptance of the Company's products; the availability and cost of raw materials; and other risks detailed herein and from time-to-time in the Company's SEC filings.

The Middleby Corporation is a global leader in the foodservice equipment industry. The company develops, manufactures, markets and services a broad line of equipment used for commercial food cooking, preparation and processing. The company's leading equipment brands serving the commercial foodservice industry include Anets®, Beech®, Blodgett®, Blodgett Combi®, Blodgett Range®, Bloomfield®, Britannia®, Carter Hoffmann®, Celfrost®, CookTek®, CTX®, Doyon®, FriFri®, Giga®, Holman®, Houno®, IMC®, Jade®, Lang®, Lincat®, MagiKitch'n®, Middleby Marshall®, Nu-Vu®, PerfectFry®, Pitco Frialator®, Southbend®, Star®, Toastmaster®, TurboChef® and Wells®. The company’s leading equipment brands serving the food processing industry include Alkar®, Armor Inox®, Auto-Bake®, Baker Thermal Solutions® (formerly Turkington), Cozzini®, Danfotech®, Drake®, Maurer-Atmos®, MP Equipment® and RapidPak®. The Middleby Corporation has been recognized by Forbes as one of the Best Small Companies every year since 2005, most recently in October 2011.

For more information about The Middleby Corporation and the company brands, please visit www.middleby.com.

 

THE MIDDLEBY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in 000’s, Except Per Share Information)

(Unaudited)
 
 

Three Months Ended
 

Nine Months Ended

 
3 rd Qtr, 2013   3 rd Qtr, 2012 3 rd Qtr, 2013   3 rd Qtr, 2012
Net sales $ 360,013 $ 257,699 $ 1,051,265 $ 746,562
Cost of sales   218,575   157,254   651,985   456,818
 
Gross profit 141,438 100,445 399,280 289,744
 
Selling & distribution expenses 41,769 25,965 116,559 79,414
General & administrative expenses   32,181   27,051   112,713   80,903
 
Income from operations 67,488 47,429 170,008 129,427
 
Interest expense and deferred
financing amortization, net 4,249 2,988 11,729 7,046
Other expense, net   1,394   2,765   1,998   3,652
 
Earnings before income taxes 61,845 41,676 156,281 118,729
 
Provision for income taxes   20,903   11,907   52,274   35,820
 
Net earnings $ 40,942 $ 29,769 $ 104,007 $ 82,909
 
Net earnings per share:
 
Basic $

2.19
$ 1.63 $

5.60
$ 4.55
 
Diluted $

2.18
$ 1.60 $

5.58
$ 4.47
 

Weighted average number shares:
 
Basic  

18,726
  18,296  

18,569
  18,237
 
Diluted  

18,742
  18,580  

18,655
  18,539
 
Comprehensive income $ 47,123 $ 35,956 $ 103,375 $ 87,642

 

THE MIDDLEBY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in 000’s)

(Unaudited)
 
   
Sep 28, 2013 Dec 29, 2012
ASSETS
 
Cash and cash equivalents $ 29,355 $ 34,366
Accounts receivable, net 195,477 162,230
Inventories, net 209,758 153,490
Prepaid expenses and other 31,832 19,151
Prepaid taxes 3,323 -
Current deferred tax assets   44,403   43,365
Total current assets 514,148 412,602
 
Property, plant and equipment, net 117,739 63,886
 
Goodwill 635,718 526,011
Other intangibles 419,951 233,341
Other assets   12,932   8,440
 
Total assets $ 1,700,488 $ 1,244,280
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current maturities of long-term debt $ 778 $ 1,850
Accounts payable 94,557 69,653
Accrued expenses   187,198   170,932
Total current liabilities 282,533 242,435
 
Long-term debt 536,608 258,220
Long-term deferred tax liability 45,065 44,838
Other non-current liabilities 54,779 48,760
 
Stockholders’ equity   781,503   650,027
 
Total liabilities and stockholders’ equity $ 1,700,488 $ 1,244,280
 

Copyright Business Wire 2010

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