THE MIDDLEBY CORPORATION REPORTS FIRST QUARTER RESULTS
ROLLING MEADOWS, Ill.--(BUSINESS WIRE)--May 3, 2000--The Middleby Corporation (NASDAQ:MIDD - news), a global supplier of equipment to the foodservice industry, today reported first quarter earnings of $.05 per share on net sales of $32,473,500 as compared to a loss of $.03 per share on net sales of $32,441,100 in the prior year.
Net sales of the Company's domestic manufacturing operations increased $551,200 or 2.5% primarily due to new product introductions. The increase in domestic sales was offset by a $518,800 or 5.1% decrease in international sales resulting from the discontinuation of various unprofitable product lines in the prior year.
The gross margin rate improved by to 34.5% in the first quarter of 2000 as compared to 29.7% in the prior year first quarter. The gross margin improvement reflects the benefit of prior year cost reduction actions which lowered manufacturing overhead and improved production efficiencies, along with the benefit of an improved mix of product sales resulting from the exit of unprofitable product lines.
Earnings before income taxes increased to $1,880,900 as compared to $37,100 in the prior year. Net earnings were $489,700 as compared to a net loss of $349,500 for the first quarter of 1999. The increase in earnings reflects the gross margin improvement. Additionally, net financing costs were lower on reduced debt and higher cash balances. Net earnings for the first quarter includes a tax provision in the amount of $1,391,200 at an effective rate of 74%. The tax provision was provided for earnings at the Company's operations in the U.S., Europe, and Latin America, while no benefit has been recorded related to losses incurred at certain operations within Asia. Despite the recorded tax provision, the Company currently does not pay U.S. federal taxes, other than AMT tax, due to tax loss carryforwards available from prior years.
Commenting on the Company's first quarter, David P. Riley, President and Chief Executive Officer, said, ``The Cooking Systems Group, the Company's worldwide manufacturing operations, posted another solid performance. Effective January 1, 2000 the Company's Philippines based manufacturing operations were added to the Group in an effort to further synergies within the Company. During the first quarter the division initiated efforts to integrate this operation within the Cooking Systems Group to better capitalize on the low cost manufacturing capabilites of that operation. We expect the results of this action to benefit the second half of the year.''
Mr. Riley added ``The results of Middleby Worldwide, the Company's international distribution operations, improved significantly in the first quarter. The division recorded very strong performances at its operations in Europe and Latin America. The Asian operations continued to suffer from low sales volumes, however a cutback in operating costs reduced the losses incurred as compared to prior periods.''
Mr. Riley concluded ``We are very pleased with the overall first quarter performance. The prior year reorganization initiatives continue to favorably impact the financial results of the Company. We are now refocusing efforts on developing new products and capturing greater market share. In the second quarter of 2000 we will introduce the PS555 conveyor oven and have several other product introductions scheduled for later in the year.''
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 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, 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®, Southbend (R), and Toastmaster (R). Middleby's international subsidiary, Middleby Worldwide, 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.
For further information about Middleby, visit the Company's World Wide Web
THE MIDDLEBY CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in 000's, Except Per Share Information) (Unaudited) Three Months Ended Three Months Ended April 1, April 3, 2000 1999 ---- ---- Net sales $32,474 $32,441 Cost of sales 21,260 22,815 ------ ------ Gross profit 11,214 9,626 Selling & distribution expense 4,029 4,670 General & administrative expense 4,541 3,220 Non-recurring expense -- 750 ------- ------- Income from operations 2,644 986 Interest expense and deferred Financing amortization, net 477 690 Other expense (income), net 286 259 ------- ------- Earnings before income taxes 1,881 37 Provision for income taxes 1,391 387 ------- -------- Net earnings (loss) $ 490 $ (350) ======= ======== Net earnings (loss) per share: Basic $ 0.05 $(0.03) ======= ======== Diluted $ 0.05 $(0.03) ======= ======== Basic 10,184 10,158 ======= ======== Diluted 10,350 10,158 ======= ======== THE MIDDLEBY CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Amounts in 000's) (Unaudited) As of As of April 1, Jan 1, 2000 2000 ------ ------ ASSETS Cash and cash equivalents $ 12,093 $ 14,536 Accounts receivable, net 24,693 24,919 Inventories, net 17,007 16,884 Other current assets 4,066 4,039 ------- ------- Total current assets 57,859 60,378 Property, plant and equipment, net 20,682 21,281 Excess purchase price over net assets acquired, net 13,812 13,962 Other assets 2,441 3,427 ------- ------- Total assets $ 94,794 $ 99,048 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current maturities of long-term debt $ 6,920 $ 7,131 Accounts payable 8,735 8,861 Accrued expenses 13,831 16,291 ------- -------- Total current liabilities 29,486 32,283 Long-term debt 18,817 21,004 Other non-current liabilities 2,365 2,593 Shareholders' equity 44,126 43,168 ------- -------- Total liabilities and shareholders' equity $ 94,794 $ 99,048 ======== ========
Middleby Corporation David P. Riley, 847/758-3880 David B. Baker, 847/429-7915