The Middleby Corporation Reports Second Quarter Results

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The Middleby Corporation Reports Second Quarter Results

ELGIN, Ill.--(BUSINESS WIRE)-- The Middleby Corporation (NAS: 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 second quarter ended June 29, 2013. Net earnings for the second quarter were $37,163,000 or $2.00 per share on net sales of $363,801,000 as compared to the prior year second quarter net earnings of $31,045,000 or $1.67 per share on net sales of $260,040,000.

2013 Second Quarter Financial Highlights

  • During the second quarter of 2013, the company purchased four of Viking's former distributors for approximately $14.9 million.
  • Net sales increased 40.0% in the second quarter as compared to the prior year second quarter. Sales from acquisitions amounted to $76.1 million or 29.3% during the quarter. Excluding the impact of acquisitions, sales increased 10.7% during the second quarter.
  • Net sales at the company's Commercial Foodservice Equipment Group increased 13.5% in the second quarter as compared to the prior year second quarter. During fiscal 2012, the company completed the acquisition of Nieco. Excluding the impact of this acquisition, net sales increased by 11.0%.
  • Net sales at the company's Food Processing Equipment Group increased 29.0% in the second quarter as compared to the prior year second quarter. During fiscal 2012, the company completed the acquisition of Stewart Systems. Excluding the impact of this acquisition, net sales increased by 9.4% in the second quarter.
  • Net sales at the company's Residential Kitchen Equipment Group amounted to $58.8 million.
  • Gross profit in the second quarter increased to $136.6 million from $101.8 million and the gross margin rate decreased from 39.2% to 37.5%. The decline in the gross margin rate reflects the impact of lower gross margins at Viking. Excluding the impact from the Viking acquisition, the gross margin rate was 38.9%.
  • Operating income increased 33.1% to $60.3 million as compared to $45.3 million in the prior year quarter.
  • Non-cash expenses included in operating income during the second quarter of 2013 increased to $14.4 as compared to $9.5 million in the prior year. Non-cash expenses during the 2013 second quarter were comprised of $4.2 million of depreciation, $7.3 million of intangible amortization and $2.9 million of non-cash share based compensation.
  • Total debt at the end of the 2013 second quarter amounted to $618.0 million as compared to $260.1 million at the end of 2012, reflecting the impact of the Viking and Viking Distributor acquisitions completed during the first and second quarters of 2013. The company's debt is financed primarily under its $1 billion senior revolving credit facility, which was entered into on August 7, 2012. The interest rate subsequent to the Viking acquisition was at LIBOR plus a margin of 1.75%, which is adjusted quarterly based upon the company's leverage ratio.

Selim A. Bassoul Chairman and Chief Executive Officer, commented, "We continued to realize strong growth at both the Commercial Foodservice Equipment Group and the Food Processing Group. Increased revenues in both segments reflect demand from customers adopting new technologies to improve the efficiency of their operations and continued expansion in international markets."

Mr. Bassoul continued, "We continue to make progress related to integration initiatives at Viking. We realized continued improvement in the EBITDA margin, which expanded to 15% in the second quarter. We anticipate continued profit improvement in the second half of 2013 and remain confident in our 20% expectation of EBITDA margins for this business by the end of next year."

Mr. Bassoul added, "At Viking, we also continued to make significant progress with initiatives to assure the highest levels of product quality and customer service. In conjunction with these efforts, we completed the acquisition of several Viking former U.S. distributors, which account for approximately 40% of the domestic revenues. These acquisitions will allow us to control and enhance critical aspects of the sales, marketing and customer support processes. We expect to finalize our reorganization of the domestic distribution channels in the second half of the 2013."

Mr. Bassoul further commented, "We are also very excited about the significant pipeline of new Viking products and product enhancements scheduled for introduction in the second half of this year. This includes the introduction of several new products and technologies adopted from our Commercial Foodservice business, such as a new high speed oven developed in conjunction with Turbochef. We have also focused heavily on development of products specifically for the international markets, obtaining international certifications for approximately one-hundred products that we now can offer to markets outside of the U.S."

Conference Call

A conference call will be held at 10:00 a.m. Central time on Friday, August 9, 2013 and can be accessed by dialing (855) 410-0553 and providing conference code 596645# 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 one half hour after its completion and can be accessed by calling (877) 764-8714 and providing code 338996#.

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®, CookTek®, CTX®, Doyon®, FriFri®, Giga®, Holman®, Houno®, IMC®, Jade®, Lang®, Lincat®, MagiKitch'n®, Middleby Marshall®, Nieco®, 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 known as Turkington), Cozzini®, Danfotech®, Drake®, Maurer-Atmos®, MP Equipment®, RapidPak®, Spooner Vicars® and Stewart®. The company's leading equipment brand servicing the residential kitchen industry includes Jade®, TurboChef® and Viking®. The Middleby Corporation has been recognized by Forbes Magazine as one of the Best Small Companies every year since 2005, most recently in October 2012.

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

 
 
THE MIDDLEBY CORPORATION
 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

(Unaudited)

 

   

Three Months Ended

   

Six Months Ended

 

2ndQtr, 2013  2ndQtr, 20122ndQtr, 2013  2ndQtr, 2012
Net sales$363,801$260,040$691,252$488,863
Cost of sales 227,227 158,224  433,410 299,564
 
Gross profit136,574101,816257,842189,299
 
Selling & distribution expenses38,63828,27474,79053,449
General & administrative expenses 37,611 28,204  80,532 53,852
 
Income from operations60,32545,338102,52081,998
 
Interest expense and deferred
financing amortization, net4,0461,9677,4804,058
Other expense (income), net 391 (380) 604 887
 
Earnings before income taxes55,88843,75194,43677,053
 
Provision for income taxes 18,725 12,706  31,371 23,913
 
Net earnings$37,163$31,045 $63,065$53,140
 
 
Net earnings per share:
 
Basic$2.00$1.70 $3.41$2.92
 
Diluted$2.00$1.67 $3.39$2.87
 

Weighted average number shares:

 
Basic 18,585 18,267  18,490 18,207
 
Diluted 18,615 18,574  18,617 18,519
 
Comprehensive income$35,174$23,592 $56,252$51,686
 

 
THE MIDDLEBY CORPORATION
 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in 000's)

(Unaudited)

        
 
Jun 29, 2013Dec 29, 2012
ASSETS
 
Cash and cash equivalents$34,406$34,366
Accounts receivable, net194,166162,230
Inventories, net204,245153,490
Prepaid expenses and other29,23119,151
Prepaid taxes12,610--
Current deferred tax assets 43,479 43,365
Total current assets518,137412,602
 
Property, plant and equipment, net111,78363,886
 
Goodwill690,462526,011
Other intangibles376,474233,341
Other assets 13,695 8,440
 
Total assets$1,710,551$1,244,280
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt$624$1,850
Accounts payable92,86769,653
Accrued expenses 179,225 170,932
Total current liabilities272,716242,435
 
Long-term debt617,409258,220
Long-term deferred tax liability44,58844,838
Other non-current liabilities51,25948,760
 
Stockholders' equity 724,579 650,027
 
Total liabilities and stockholders' equity$1,710,551$1,244,280
 



The Middleby Corporation
Darcy Bretz, Investor and Public Relations, (847) 429-7756
or
Tim FitzGerald, Chief Financial Officer, (847) 429-7744

KEYWORDS:   United States  North America  Illinois

INDUSTRY KEYWORDS:

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