Middleby: 1st Quarter Earnings News Release THE MIDDLEBY CORPORATION REPORTS FISCAL FIRST QUARTER RESULTS Rolling Meadows, IL, May 3, 1999 - The Middleby Corporation (NASDAQ: MIDD), a global supplier of equipment to the foodservice industry, today reported its results for the fiscal first quarter ended April 3, 1999. The Company reported a net loss for the first quarter of $350,000, or 3 cents per share on a diluted basis, compared to net earnings of $520,000, or 5 cents per share, in the 1998 fiscal first quarter. Net sales increased 4% to $32,441,000 from $31,101,000 for the same period a year ago. Income from operations declined to $986,000 from $1,621,000 in the prior year quarter, and earnings before taxes were $37,000 compared to $772,000 in the year ago period. The current year quarter included pre-tax charges of $750,000 principally for severance payments related to cost restructuring efforts. Commenting on the Company's performance, David P. Riley, President and Chief Executive Officer, said, "Our first quarter results were mixed as we posted improved financial results in our U.S-based operations, while our international operations, particularly those based in Asia, were adversely affected by low demand. The Cooking Systems Group made significant progress during the quarter with its strategic initiatives to enhance sales channel and distribution capabilities of the Middleby Marshall, Southbend and Toastmaster product lines, and took aggressive actions to reduce its cost structure. The international distribution division also continued with measures to align costs with lower demand levels. We recorded $750,000 in severance and other costs for actions taken during the quarter. We expect to incur charges of approximately $200,000 in the second quarter for actions currently planned to be taken during that quarter. Our cost restructuring initiatives during the past six months are expected to result in annualized savings of over $3 million." Riley added, "We are pleased with the sales performance of the Cooking Systems Group which reported a sales increase of 12% from the same period last year, excluding the impact of discontinued product lines. Sales of our conveyor oven equipment products increased 20% due to improved sales to major restaurant chains. However, timing of orders from a major customer had negatively impacted conveyor oven equipment sales during the first quarter 1998. Sales of our core cooking equipment reported a net sales increase of 10% compared to the prior year first quarter with continued success of new products, while sales of counterline equipment declined slightly." Mr. Riley also noted, "Decreased restaurant, hotel and resort development led to a 13% decline in net sales by Middleby Philippines Corporation, a leading specialty equipment manufacturer for the Asian markets. Net sales of the international distribution business declined by 1% as lower sales in Asia and Europe were partly offset by increased sales into Latin America and Canada. "Gross margins of 29.7% in the first quarter were lower than the 30.3% reported in the prior year first quarter principally due to lower margins at our Philippines operation resulting from lower volume and unfavorable sales mix. Also, margins for the international distribution business were slightly lower due to comparatively less project business, which carries a higher margin. Operating expenses increased $823,000 from the prior year's first quarter due primarily to the charges for severance and other items related to cost reduction programs and higher commissions for the increased volume levels. A tax provision of $387,000 was recorded during the quarter principally for U.S. taxable income, while no tax benefit was recognized for losses at international subsidiaries." Mr. Riley continued, "We feel our management team made significant progress during the first quarter toward our goal to return Middleby to profitability after the challenging year in 1998. Our international units were still impacted by lower demand levels in Asia and other markets affected by currency crises. We have maintained our presence in troubled overseas markets during difficult economic conditions, which should accrue future benefits to us as those markets rebound and attract renewed restaurant and hotel development. Our marketing and engineering groups are bringing to market several new and innovative products, many of which will be introduced at the upcoming National Restaurant Association show. Our restructuring initiatives are expected to provide a lower cost base and more focused strategy from which to capitalize on the growth opportunities in the global foodservice markets and improve our profitability and return on investment." 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, but are not limited to, quarterly variations in operating results; dependence on key customers; international exposure; foreign exchange 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, including those discussed under the heading entitled "Risk Factors" in the Company's Registration Statement on Form S-2 (No. 333-35397) filed with the Securities and Exchange Commission. The Middleby Corporation is a leader in the design, manufacture, marketing and service of a broad line of equipment used for cooking and preparation of food in commercial and institutional kitchens and restaurants throughout the world. The Company's leading equipment brands include Middleby Marshall(c) (conveyor cooking equipment), Southbend(c) (core cooking and steam cooking equipment), and Toastmaster(c) (counterline cooking and warming equipment). Middleby's international subsidiary, Asbury Associates, Inc., is a leading exporter and distributor of foodservice equipment in the global marketplace and its international fabrication subsidiary, Middleby Philippines Corporation, is a leading supplier of specialty equipment in the Asian markets. Middleby's Annual Meeting of Stockholders will be held on Thursday, May 13, 1999 beginning at 10:30 a.m. CDT, at the Company's facility located at 1400 Toastmaster Drive, Elgin, Illinois. The Company will be participating in the National Restaurant Association Show being held May 22- 26 in Chicago, Illinois. For further information about Middleby, visit the Company's World Wide Web site, http://www.middleby.com. Contact: John J. Hastings, The Middleby Corporation 847-758-3885 THE MIDDLEBY CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in 000's, Except Per Share Information) (Unaudited) Three Months Ended Apr. 3, Apr.4, 1999 1998 Net sales $ 32,441 $ 31,101 Cost of sales 22,815 21,663 Gross profit 9,626 9,438 Selling & distribution expense 4,670 5,101 General & administrative expense 3,220 2,716 Non-recurring expenses 750 - Income from operations 986 1,621 Interest expense and deferred financing amortization, net 690 737 Other (income) expense, net 259 112 Earnings before income taxes 37 772 Provision for income taxes 387 252 Net (loss) earnings $ (350) $ 520 Basic earnings per share Net (loss) earnings per share $ (0.03) $ 0.05 Weighted average shares outstanding 10,158 10,946 Diluted earnings per share Net (loss) earnings per share $ (0.03) $ 0.05 Weighted average shares outstanding 10,158 11,139 THE MIDDLEBY CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Amounts in 000's) (Unaudited) As of As of Apr. 3, Jan. 2, 1999 1999 (a) ASSETS Cash and cash equivalents $ 3,324 $ 6,768 Accounts receivable, net 24,714 24,330 Inventories, net 20,718 20,456 Prepaid expenses and other 726 941 Current deferred tax 2,895 2,895 Total current assets 52,377 55,390 Property, plant and equipment, net 22,319 22,596 Excess purchase price over net assets acquired, net 13,481 13,617 Deferred Taxes 5,160 5,347 Other assets 3,754 2,729 Total assets $ 97,091 $ 99,679 LIABILITIES AND SHAREHOLDERS' EQUITY Current maturities of long-term debt $ 1,821 $ 1,893 Accounts payable 9,241 10,945 Accrued expenses 11,255 11,943 Total current liabilities 22,317 24,781 Long-term debt 25,762 25,932 Retirement benefits & other non-current liabilities 4,574 4,232 Shareholders' equity 44,438 44,734 Total liabilities and shareholders' equity $ 97,091 $ 99,679 Notes: (a) Certain amounts have been reclassified to be consistent with the current year presentation. Ends.