THE MIDDLEBY CORPORATION REPORTS
FOURTH QUARTER RESULTS

Elgin, IL, March 29, 2002 - The Middleby Corporation (NASDAQ: MIDD), a global supplier of equipment to the foodservice industry, today reported earnings for the fourth quarter and the fiscal year.  As previously reported the company completed its acquisition of Blodgett Holdings, Inc. from Maytag Corporation on December 21, 2001.  Accordingly, the results of the fourth quarter and full year include the earnings of Blodgett for the period subsequent to the acquisition.

Net sales for the fourth quarter of fiscal 2001 were $25,798,000, a 17% decrease from the 2000 comparable period.  Earnings before income taxes decreased to $851,000 as compared to $2,359,000 in the prior year quarter.  Net loss for the quarter was $681,000 or ($.08) per share as compared to a net earnings of $1,299,000 or $.14 per share in the fourth quarter of 2000.

For the fiscal year ended December 29, 2001 net sales were $101,552,000, a decrease of 20% from the prior year.  Earnings before income taxes decreased to $6,400,000, a decrease of 30% as compared to $9,143,000 in fiscal 2000.  Net earnings for the year were $1,636,000 or $.18 per share as compared to $3,538,000 or $.35 per share in fiscal 2000.

Sales in the fourth quarter and fiscal year were impacted by the slowdown in the U.S. and international economies.  The sales decline also reflects slowed store openings of major pizza chain customers, particularly in the international markets.  In addition, international sales were impacted by the effect of weaker foreign currencies resulting in lower reported revenues when translated into U.S. dollars.  Despite the decline in fourth quarter sales, the company experienced improvement in the year-end order rate and anticipates improvement in the 2002 first quarter sales volumes over the fourth quarter of 2001.

Gross profit in the fourth quarter of 2001 was $6,612,000 as compared to $13,050,000 from the fourth quarter of the prior year as a result of the decrease in sales volume.  The fourth quarter also included inventory write-downs of $868,000 associated with discontinued product lines related to Blodgett.  The gross margin rate for the quarter was 25.6% as compared to 42.1% in the prior year, reflecting the impact of the inventory write-down and lower production efficiencies resulting from the decline in production volume.  Gross profit percentage was also adversely impacted by the Blodgett operations that were shut down for the period subsequent to the acquisition on December 21, 2001 through the end of the year due to holidays.

Operating expenses in the fourth quarter of 2001 were $5,197,000 as compared to $10,112,000 in the fourth quarter of 2000.  The reduction in expenses reflects a combination of savings from lower payroll related costs resulting from reduction in employee headcount during the first half of 2001 which took place in response to the slowed sales volumes, tightened controls on discretionary spending, and lower variable expenses related to sales such as commissions and incentive compensation.

Operating income amounted to $1,414,000 in the fourth quarter of 2001.  The fourth quarter operating income was impacted by results of Blodgett, including operating losses of $273,000 for the period subsequent to the acquisition on December 21, 2001 through year-end and inventory write-downs of $868,000 for discontinued products.  Operating income excluding the Blodgett results amounted to $2,555,000 as compared to $2,939,000 in the prior year fourth quarter, which was lower due to the decline in sales volumes.

Interest expense increased to $279,000 for the quarter as compared to $53,000 in the prior year due to the increased debt associated with the financing for the acquisition.  Other expense decreased to $285,000 for the quarter as compared to $526,000 due to lower foreign exchange losses.

The company recorded a tax provision of $1,531,000 at an effective tax rate of 179% during the fourth quarter. The fourth quarter provision included amounts for state tax assessments.  The effective tax rate was also impacted by losses at certain international operations for which the company has recorded no tax benefit.

Commenting on the company’s performance for the fourth quarter, Selim A. Bassoul, President and Chief Executive Officer, said, “The fourth quarter earnings were impacted by the acquisition of Blodgett and the related inventory write-downs, which lowered operating income by approximately $1.1 million.  We anticipate there will be further costs incurred in the first half of 2002 as we complete the integration of Blodgett.  Excluding the impact of the Blodgett related results, earnings and cash flow continued to be solid despite lower net sales.  We are confident that we will see an increase in sales as there is improvement in the global economies.  Despite the decline in net sales from 2000, we believe we have made market share gains.  The purchase of Blodgett further strengthens our market position and broadens our product offerings.”

Mr. Bassoul added, “The company has made significant progress integrating Middleby and Blodgett in the first quarter of 2002.  We have completed initiatives to reorganize the management structure and reduce headcount.  Additionally, we are in the process of consolidating several manufacturing facilities, which will result in further improvements to the cost structure of the Blodgett operations.”

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, the ability to successfully integrate the acquired operations of Blodgett, 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 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 Blodgett®, Blodgett Combi®, MagiKitch’n®, Middleby Marshall®, Pitco Frialator®, 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

Fiscal Year Ended

                                               

 

4th Qtr, 2001  

4th Qtr, 2000  

2001  

2000

Net sales

$  25,798

$  30,988

$   101,552

$   126,888

Cost of sales

   19,186

    17,938

     70,048

     81,702

 

 

 

 

 

    Gross profit

 6,612

 13,050

31,504

45,186

 

 

 

 

 

Selling & distribution expense   

    2,829

    3,723

13,180

15,858

General & administrative expense

    2,369

     6,388

      10,390

     17,478

 

 

 

 

 

    Income from operations

    1,414

    2,939

7,934

11,850

 

 

 

 

 

Interest expense and deferred          

 

 

 

 

    Financing amortization, net

   279

   53

740

1,204

Other expense (income), net

        285

        526

          794

       1,503

 

 

 

 

 

    Earnings before income taxes

850

 2,360

6,400

9,143

 

 

 

 

 

Provision for income taxes

     1,531

      1,060

       4,764

       5,370

 

 

 

 

 

    Net earnings before extraordinary                                                                                       item

 

$     (681)

 

$    1,299

 

$     1,636

 

$     3,773

 

 

 

 

 

Extraordinary item (net of tax)

                --

            --

             --

          235

 

 

 

 

 

    Net earnings

$     (681)

$    1,299

$     1,636

$     3,538

 

 

 

 

 

Net earnings before extraordinary item per share:

 

 

 

 

 

 

 

 

 

    Basic

$     (0.08)

$      0.14

$       0.18

$       0.38

 

 

 

 

 

    Diluted

$     (0.08)

$      0.14

$       0.18

$       0.37

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

 

 

 

 

    Basic

$     (0.08)

$      0.14

$       0.18

$       0.35

 

 

 

 

 

    Diluted

$     (0.08)

$      0.14

$       0.18

$       0.35

 

Weighted average number shares:

 

 

 

 

 

 

 

 

 

    Basic

      8,972

     9,377

      8,981

     9,971

 

 

 

 

 

    Diluted

      8,975

      9,394

      8,997

   10,091

 

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

 

 

As of Fiscal Year Ended

 

 

 

 

 

 

 

 

2001

 

2000

 

 ASSETS

 

 

 

 

 

Cash and cash equivalents

$       3,795

 

$      2,094

 

Accounts receivable, net

    25,158

 

    18,879

 

Inventories, net

29,115

 

18,372

 

Other current assets

     12,469

 

      5,117

 

    Total current assets

70,537

 

44,462

 

 

 

 

 

 

Property, plant and equipment, net

30,598

 

18,968

 

 

 

 

 

 

 

 

 

 

 

Goodwill and other intangibles

89,793

 

13,056

 

 

 

 

 

 

Other assets

        9,569

 

        1,824

 

 

 

 

 

 

    Total assets

$   200,497

 

$    78,310

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt

$     10,047

 

$          249

 

Accounts payable

9,289

 

7,211

 

Accrued expenses

     38,438

 

       17,918

 

    Total current liabilities

57,774

 

25,378

 

 

 

 

 

 

Long-term debt

86,916

 

8,290

 

 

 

 

 

 

Other non-current liabilities

13,862

 

7,181

 

 

 

 

 

 

Shareholders’ equity

      41,945

 

       37,461

 

 

 

 

 

 

    Total liabilities and shareholders’

 

 

 

 

        equity

$   200,497

 

$     78,310

 

   

 

 

 

 

Back to Top

Back to Home Page