THE MIDDLEBY CORPORATION REPORTS
THIRD QUARTER RESULTS

Elgin, IL, October 25, 2001 - The Middleby Corporation (NASDAQ: MIDD), a global supplier of equipment to the foodservice industry, today reported net earnings of $.12 per share on net sales of $25,714,000 for the fiscal third quarter ended September 29, 2001 as compared to net earnings before extraordinary item of $.13 per share on sales of $31,051,000 in the third quarter of 2000.

Net sales were $25,714,000, a decrease of $5,337,000 or 17% as compared to the third quarter of the prior year.  Sales in the third quarter continued to be impacted by the slowdown in the U.S. and international economies.  While the company has seen some improvement in domestic sales to major chains, international expansion programs have continued to be lower than expectations and sales to the general market continue to be far below historical volume levels.  

Gross profit was $8,487,000, a decrease of $2,410,000 or 22% from the third quarter of the prior year as a result of the sales volume decrease.  The gross margin rate for the quarter was 33.0% as compared to 35.1% in the prior year comparative quarter, reflecting the impact of the lower sales volume that reduced overhead absorption and production efficiencies at the domestic manufacturing operations. 

Operating expenses decreased by $863,000 or 12% as compared to the third quarter of 2000.  The reduction in expenses reflects a combination of savings from lower payroll costs resulting from reduction in employee headcount during the first half of 2001 in response to the slowdown, tightened controls on discretionary spending, and lower variable expenses related to sales such as commissions and incentive compensation.  

Interest and other expenses amounted to $42,000 as compared to $627,000 in the prior year due to lower debt levels as compared to last year’s third quarter and favorable foreign exchange results. 

Net earnings for the quarter amounted to $1,092,000 or $.12 per share as compared to earnings of $1,108,000 or $.11 per share last year, which included an extraordinary expense item of $235,000 related to the early retirement of debt.  Net earnings were essentially flat with the prior year as reduced sales and gross margins were offset by lower operating expenses, more favorable interest and non-operating expenses, and a reduced effective tax rate.  

Commenting on the company’s performance for the third quarter, Selim A. Bassoul, President and Chief Executive Officer, said, “Third quarter sales continued to be impacted by the slowdown in world economies and reduced growth rates by major chain customers.  Although we are disappointed with the third quarter sales volume we are encouraged that our order rate and backlog have improved from the second quarter of 2001.  However, we do not expect to achieve the same sales level as last year’s fourth quarter in the upcoming quarter.” 

Mr. Bassoul added, “We have adjusted our business operations to the current sales volumes.  These efforts have resulted in lower operating costs that have allowed the company to remain profitable during the current economic environment and should result in increased profitability when the economies of the world improve and revenues return to historical levels”

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 and Toastmaster®.  Middleby’s international subsidiary, Middleby Worldwide, is a leading exporter and distributor of foodservice equipment in the global marketplace and its international manufacturing 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 site, http://www.middleby.com.

Contact:
Selim A. Bassoul, Chief Executive Officer – 847- 429-7788
David B. Baker, Chief Financial Officer – 847- 429-7915

THE MIDDLEBY CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in 000’s, Except Per Share Information)
(Unaudited)

Three Months Ended

Nine Months Ended

                                               

 

3rd Qtr, 2001  

3rd Qtr, 2000  

3rd Qtr, 2001  

3rd Qtr, 2000

Net sales

$  25,714

$  31,051

$   75,754

$   95,899

Cost of sales

   17,227

    20,154

     50,862

     63,764

 

 

 

 

 

    Gross profit

 8,487

 10,897

24,892

32,135

 

 

 

 

 

Selling & distribution expense   

    3,173

    3,880

10,351

12,135

General & administrative expense

    2,879

     3,035

      8,022

     11,089

 

 

 

 

 

    Income from operations

    2,435

    3,982

6,519

8,911

 

 

 

 

 

Interest expense and deferred          

 

 

 

 

    Financing amortization, net

   128

   192

460

1,151

Other expense (income), net

        (86)

        435

          509

          976

 

 

 

 

 

    Earnings before income taxes

2,393

 3,355

5,550

6,784

 

 

 

 

 

Provision for income taxes

    1,301

      2,012

       3,233

       4,310

 

 

 

 

 

    Net earnings before extraordinary                                                                                       item

 

$  1,092

 

$    1,343

 

$     2,317

 

$     2,474

 

 

 

 

 

Extraordinary item (net of tax)

                --

         235

              --

          235

 

 

 

 

 

    Net earnings

$  1,092

$    1,108

$     2,317

$     2,239

 

 

 

 

 

Net earnings before extraordinary item per share:

 

 

 

 

 

 

 

 

 

    Basic

$       0.12

$      0.13

$       0.26

$       0.24

 

 

 

 

 

    Diluted

$       0.12

$      0.13

$       0.26

$       0.24

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

 

 

 

 

    Basic

$       0.12

$      0.11

$       0.26

$       0.22

 

 

 

 

 

    Diluted

$       0.12

$      0.11

$       0.26

$       0.22

 

Weighted average number shares:

 

 

 

 

 

 

 

 

 

    Basic

      8,981

    10,144

      8,987

   10,168

 

 

 

 

 

    Diluted

      8,994

    10,309

      9,003

   10,339

 

THE MIDDLEBY CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in 000’s)
(Unaudited)

                                                          

 

 

 

 

 

 

 As of 3rd Qtr

 

As of Year Ended

 

 

2001

 

2000

 

 ASSETS

 

 

 

 

 

Cash and cash equivalents

$      2,687

 

$      2,094

 

Accounts receivable, net

    14,514

 

    18,879

 

Inventories, net

17,204

 

18,372

 

Other current assets

        5,264

 

      5,117

 

    Total current assets

39,669

 

44,462

 

 

 

 

 

 

Property, plant and equipment, net

17,259

 

18,968

 

 

 

 

 

 

Excess purchase price over net

 

 

 

 

    assets acquired, net

12,378

 

13,056

 

 

 

 

 

 

Other assets

        1,217

 

        1,824

 

 

 

 

 

 

    Total assets

$    70,523

 

$    78,310

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt

$           10

 

$          249

 

Accounts payable

5,496

 

7,211

 

Accrued expenses

     14,259

 

       17,918

 

    Total current liabilities

19,765

 

25,378

 

 

 

 

 

 

Long-term debt

4,791

 

8,290

 

 

 

 

 

 

Other non-current liabilities

6,125

 

7,181

 

 

 

 

 

 

Shareholders’ equity

      39,842

 

       37,461

 

 

 

 

 

 

    Total liabilities and shareholders’

 

 

 

 

        equity

$    70,523

 

$     78,310