EX-99.1 2 a5014671ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 The Middleby Corporation Reports Third Quarter Results ELGIN, Ill.--(BUSINESS WIRE)--Nov. 7, 2005--The Middleby Corporation (NASDAQ:MIDD), a leading worldwide manufacturer of restaurant and foodservice cooking equipment, today reported sales and earnings for the third quarter ended October 1, 2005. Net earnings for the third quarter were $9,628,000 or $1.19 per share on net sales of $80,937,000 as compared to the prior year third quarter net earnings of $10,368,000 or $1.03 per share on net sales of $70,620,000. Net earnings for the nine months ended October 1, 2005 were $24,945,000 or $3.09 per share on net sales of $239,738,000 as compared to net earnings of $24,248,000 or $2.42 per share on net sales of $205,996,000 in the prior year first nine months. Third Quarter Financial Highlights -- Net sales rose 14.6% in the third quarter. The net sales increase in the third quarter reflects the impact of the Nu-Vu Foodservice Systems acquisition, which accounted for 6.9% of the sales growth for the quarter. Excluding the impact of the acquisition, net sales would have increased 7.7% in the third quarter, reflecting strong growth in international business and the impact of price increases instituted in the first quarter to offset increased material costs. -- Gross margin increased to 40.1% for the third quarter as compared to 37.4% in the prior year quarter. The third quarter gross margins benefited from production efficiencies on increased sales volumes and a favorable sales mix, due in part to increased international sales, which typically carry a higher margin. Margins also improved as compared to the first half of the year due to the realization of price increases instituted in the first quarter and a decline in the cost of steel during the third quarter. Additionally, margins at Nu-Vu Foodservice Systems, which negatively impacted gross margins during the first half, improved significantly as a result of completed integration initiatives and higher sales volumes during the quarter, which resulted in improved fixed overhead absorption. -- Operating income margin increased to 20.1% as a percent of net sales for the third quarter compared to 17.8% in the prior year quarter, reflecting the impact of increased sales volumes and higher gross margins during the quarter. -- Interest expense increased to $1,579,000 in the third quarter of 2005 as compared to $643,000 in the prior year quarter as a result of higher debt levels resulting from the December 2004 share repurchase transaction. -- Provision for income taxes was recorded at a 33.1% effective rate in the third quarter as compared to a 13.5% effective rate in the third quarter of 2004. The tax provision for both periods included favorable adjustments to tax reserves associated with closed tax periods. -- Total debt decreased to $104,099,000 at the end of the quarter ended October 1, 2005 from $121,294,000 at the end of the second quarter and $123,723,000 at the end of 2004. Borrowing activity in the first nine months of 2005 included $12 million of funding for the January Nu-Vu acquisition. Chairman and Chief Executive Officer, Selim A. Bassoul said, "We were very pleased with the results of the third quarter. Sales in the third quarter, which is seasonally one of our strongest quarters, were particularly strong due to continued growth in emerging markets and expansion of restaurant chain customers internationally. Additionally, sales at NuVu Foodservice Systems were also very strong during the quarter. The third quarter sales at Nu-Vu, which we expect will be the strongest quarter at the division this year, were favorably impacted by the timing of store openings which accelerated for a major chain customer during the quarter." Mr. Bassoul added, "Looking forward, we expect the growth rate for the company in the fourth quarter to slow due to the short-term cancellation and delay of orders in the areas affected by the hurricanes. Longer term, however, as these areas are rebuilt it will positively impact our revenues." Mr. Bassoul continued, "We were positively affected by steel prices which began to decline during the third quarter, however, the impact of the recent hurricanes on steel prices appears to have curtailed these gains in the near term. Additionally, we continue to monitor rising costs of fuel, which are beginning to impact our costs of shipping. We were pleased with the margin improvement, which took place at Nu-Vu Foodservice Systems. We have substantially completed the integration efforts associated with this newly acquired business and now will direct our efforts at this division to introducing new products and increase our efforts in marketing these products to a broader audience." Conference Call A conference call will be held at 11:00 a.m. Eastern time on November 8, 2005 and can be accessed by dialing (800) 367-5339 and providing conference code 2149580. Members of the financial community who participate in the question and answer session will receive a separate call-in number. An audio webcast of the conference call can be accessed through investor services at www.middleby.com. A digital replay of the call will be available approximately one half hour after its completion and can be accessed by calling (800) 642-1687 and providing code 2149580. A transcript of the call will also be posted to the company's website. 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 cooking and food preparation in commercial and institutional kitchens and restaurants throughout the world. The company's leading equipment brands include Blodgett(R), Blodgett Combi(R), Blodgett Range(R), CTX(R), MagiKitch'n(R), Middleby Marshall(R), Nu-Vu(R), Pitco Frialator(R), Southbend(R), and Toastmaster(R). Middleby's international subsidiary, Middleby Worldwide, is a leading exporter and distributor of foodservice equipment in the global marketplace. Middleby's international manufacturing subsidiary, Middleby Philippines Corporation, is a leading supplier of specialty equipment in the Asian markets. For further information about Middleby, 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 3rd Qtr, 2005 3rd Qtr, 2004 3rd Qtr, 2005 3rd Qtr, 2004 ------------- ------------- ------------- ------------- Net sales $80,937 $70,620 $239,738 $205,996 Cost of sales 48,461 44,226 147,604 127,633 ------------- ------------- ------------- ------------- Gross profit 32,476 26,394 92,134 78,363 Selling & distribution expense 8,710 7,637 25,663 23,340 General & administrative expense 7,482 6,175 21,847 17,684 ------------- ------------- ------------- ------------- Income from operations 16,284 12,582 44,624 37,339 Interest expense and deferred financing amortization, net 1,579 643 5,063 2,334 Loss (gain) on acquisition financing derivatives - (96) - (96) Other expense (income), net 312 45 47 317 ------------- ------------- ------------- ------------- Earnings before income taxes 14,393 11,990 39,514 34,784 Provision for income taxes 4,765 1,622 14,569 10,536 ------------- ------------- ------------- ------------- Net earnings $9,628 $10,368 $24,945 $24,248 ============= ============= ============= ============= Net earnings per share: Basic $1.28 $1.12 $3.33 $2.63 ============= ============= ============= ============= Diluted $1.19 $1.03 $3.09 $2.42 ============= ============= ============= ============= Weighted average number shares: Basic 7,516 9,241 7,499 9,232 ============= ============= ============= ============= Diluted 8,110 10,040 8,060 10,019 ============= ============= ============= ============= THE MIDDLEBY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------- (Amounts in 000's) (Unaudited) Oct. 1, 2005 Jan. 1, 2005 ------------ ------------ ASSETS Cash and cash equivalents $3,273 $3,803 Accounts receivable, net 35,752 26,612 Inventories, net 31,981 32,772 Prepaid taxes 70 9,952 Deferred tax assets 10,593 8,865 Other current assets 1,134 2,008 ------------ ------------ Total current assets 82,803 84,012 Property, plant and equipment, net 22,824 22,980 Goodwill 78,970 74,761 Other intangibles 28,488 26,300 Other assets 2,555 1,622 ------------ ------------ Total assets $215,640 $209,675 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current maturities of long-term debt $12,355 $10,480 Accounts payable 14,039 11,298 Accrued expenses 48,166 51,311 ------------ ------------ Total current liabilities 74,560 73,089 Long-term debt 91,744 113,243 Long-term deferred tax liability 5,978 11,434 Other non-current liabilities 4,924 4,694 Shareholders' equity 38,434 7,215 ------------ ------------ Total liabilities and shareholders' equity $215,640 $209,675 ============ ============ CONTACT: The Middleby Corporation Darcy Bretz (Investor and Public Relations), 847-429-7756 or Timothy FitzGerald, 847-429-7744