THE MIDDLEBY CORPORATION REPORTS
Elgin, IL, March 6,
2003 - The Middleby Corporation (NASDAQ: MIDD), a global supplier of
equipment to the foodservice industry, today reported its results for
the fiscal quarter and year ended December 28, 2002.
Net earnings before extraordinary charges were $3,425,000 or $.37
per share on net sales of $54,460,000 in the fourth quarter of 2002 as
compared to a net loss of $681,000 or $.08 per share on net sales of
$25,798,000 in the fourth quarter of 2001.
As previously reported on December 23, 2002, the company
refinanced its debt during the fourth quarter.
Proceeds from the refinancing were used to repay $25.5 million of
15.5% subordinated senior debt incurred as a result of the acquisition
of Blodgett Holdings, Inc. ("Blodgett") from Maytag
Corporation in December 2001. As
a result of the debt refinancing, the company recorded an extraordinary
charge of $5,514,000, net of tax, related to a write-down of deferred
financing costs and a prepayment penalty associated with the retired
debt. Inclusive of the
extraordinary charge, the company reported a net loss of $2,089,000 or
$.23 per share during the quarter.
Net earnings before
the extraordinary charges for the full year 2002 amounted to $11,616,000
or $1.27 per share on net sales of $229,108,000 as compared to net
earnings of $1,636,000 or $.18 per share on net sales of $101,552,000 in
fiscal 2001. Net earnings
for 2002, including the extraordinary charge, amounted to $6,102,000 or
$.67 per share. The fourth
quarter and full year financial performance for fiscal 2002 includes the
results of Blodgett, which was acquired from Maytag Corporation on
December 21, 2001.
The increase in net
sales for the fourth quarter and full year reflects the incremental
business associated with the acquired Blodgett operations.
On a proforma basis, net sales for combined Middleby and Blodgett
increased in the quarter by $1.8 million or 3.4% from $52,670,000 in the
fourth quarter of 2001 and increased for the full fiscal year 2002 by
$6.5 million or 2.9% from $222,601,000 for the fiscal year 2001.
Gross profit in the fourth quarter of 2002 was $18,622,000 as compared to $6,612,000 from the fourth quarter of 2001 and was $78,500,000 for the fiscal year 2002 as compared to $31,504,000 in the prior year. The gross margin rate was 34.2% and 34.3% for the fourth quarter and fiscal year 2002 as compared to gross margin rates of 25.6% and 31.0% for the fourth quarter and fiscal year 2001. Operating income increased to $7,867,000 in the fourth quarter 2002 from $1,414,000 in the prior year comparable period and increased to $29,731,000 in fiscal year 2002 versus $7,934,000 in the prior year. The increase in gross profit and operating income reflects the impact of the acquired Blodgett operations.
Interest and other non-operating expense amounted to $2,726,000 in the fourth quarter of 2002 as compared to $564,000 in the prior year quarter and amounted to $11,795,000 for the full year in 2002 as compared to $1,534,000 in the fiscal year 2001. The increase in interest and other non-operating expense reflects the financing costs associated with the debt incurred to finance the Blodgett acquisition. Total debt was reduced for the fiscal year 2002 by $8,237,000 to $ 87,962,000 from $96,199,000 at December 29, 2001.
The provision for income taxes for the year includes a one-time tax benefit of $1.7 million, or $.18 per share associated with the closing of a Japanese subsidiary, of which approximately $.4 million or $.05 per share was recorded during the fourth quarter.
Commenting on the company’s performance for the year, Selim A. Bassoul, President and Chief Executive Officer, said, “We are very pleased with the accomplishments achieved during fiscal 2002. We have successfully restructured and integrated the Blodgett operations acquired at the end of December 2001. These restructuring efforts have led to a dramatically improved cost structure, which was reflected in the financial results for the second half of 2002. We have now turned our focus to capitalizing on sales opportunities created by the synergies and strength of the combined organization and the introduction of newly developed products into the marketplace.”
William F. Whitman, Jr., Chairman of the Board, added, “During the year we also made significant progress in reducing the debt. Our fourth quarter refinancing of our senior bank facility enabled us to repay $25.5 million of subordinated notes with a 15.5% interest rate. Additionally, we were able to fully retire 807,326 of warrants associated with the subordinated notes eliminating the potential dilution of shareholders’ equity. This will significantly reduce our interest costs and enhance our shareholder returns moving into 2003.”
conference call will be held on Friday morning at 9:30 a.m. Central Time
on March 7, 2003. You are invited to listen to the call by calling
1-800-374-0538 and providing password 8685260. The conference call will
also be webcast at mms://winaudio.mshow.com/91818.asf,
which can accessed via the Investor Services section of The Middleby
Corporation website at www.middleby.com.
Digital replay of the call will be available at approximately 11:30 a.m.
Central Time. The replay may be accessed by calling 1-800-642-1687 and
providing password 8685260. A transcript of the call will be posted on
the Company 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 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, CTX, 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,
Contact: Selim A. Bassoul, Chief Executive Officer – 847- 429-7788
David B. Baker, Chief Financial Officer – 847- 429-7915
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in 000’s, Except Per Share Information)
THE MIDDLEBY CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in 000’s)