THE MIDDLEBY CORPORATION REPORTS

FOURTH QUARTER RESULTS

  

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.”

 A 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,

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

                                               

 

Dec. 28, 2002  

Dec. 29, 2001  

Dec. 28, 2002

Dec. 29, 2001

Net sales

$  54,460

$  25,798

$  229,108

$   101,552

Cost of sales

   35,838

    19,186

    150,608

     70,048

 

 

 

 

 

    Gross profit

 18,622

 6,612

78,500

31,504

 

 

 

 

 

Selling & distribution expense   

    6,639

    2,829

28,213

13,180

General & administrative expense

    4,116

     2,369

      20,556

     10,390

 

 

 

 

 

    Income from operations

    7,867

    1,414

29,731

7,934

 

 

 

 

 

Interest expense and deferred          

 

 

 

 

    financing amortization, net

   2,397

   279

11,180

740

Loss (gain) on acquisition financing

    derivatives

 

(177)

 

--

 

(286)

 

--

Other expense (income), net

        506

        285

          901

          794

 

 

 

 

 

    Earnings before income taxes

5,141

 850

17,936

6,400

 

 

 

 

 

Provision for income taxes

     1,716

      1,531

       6,320

       4,764

 

 

 

 

 

    Net earnings before extraordinary item

 

$   3,425

 

$     (681)

 

$    11,616

 

$     1,636

 

 

 

 

 

Extraordinary item (net of tax)

     5,514

            --

        5,514

              --

 

 

 

 

 

    Net earnings

$  (2,089)

$     (681)

$      6,102

$     1,636

 

 

 

 

 

 

 

 

 

 

Net earnings before extraordinary item per share:

 

 

 

 

 

 

 

 

 

    Basic

$       0.38

$    (0.08)

$       1.29

$       0.18

 

 

 

 

 

    Diluted

$       0.37

$    (0.08)

$       1.27

$       0.18

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

 

 

 

 

    Basic

$     (0.23)

$    (0.08)

$       0.68

$       0.18

 

 

 

 

 

    Diluted

$     (0.23)

$    (0.08)

$       0.67

$       0.18

 

Weighted average number shares:

 

 

 

 

 

 

 

 

 

    Basic

      9,025

     8,972

      8,990

     8,981

 

 

 

 

 

    Diluted

      9,250

      8,975

      9,132

     8,997

 

 

 

THE MIDDLEBY CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(Amounts in 000’s)

(Unaudited)

                                                                                                                                                   

 

 

 

(as restated)

 

 

Dec. 28, 2002

 

Dec. 29, 2001

 ASSETS

 

 

 

 

 

Cash and cash equivalents

$      8,378

 

$      5,997

 

Accounts receivable, net

    27,797

 

    25,158

 

Inventories, net

27,206

 

29,115

 

Deferred tax assets

13,341

 

11,291

 

Other current assets

        1,069

 

        1,178

 

Total current assets

77,791

 

72,739

 

 

 

 

 

 

Property, plant and equipment, net

27,500

 

30,598

 

 

 

 

 

 

Goodwill

74,841

 

74,005

 

Other intangibles

26,300

 

26,466

 

Other assets

        2,386

 

        7,589

 

 

 

 

 

 

    Total assets

$  208,818

 

$  211,397

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt

$    14,400

 

$    10,047

 

Accounts payable

13,488

 

11,491

 

Accrued expenses

      36,013

 

      38,438

 

Total current liabilities

63,901

 

59,976

 

 

 

 

 

 

Long-term debt

73,562

 

86,152

 

Long-term deferred tax liability

7,878

 

8,698

 

Other non-current liabilities

18,845

 

17,162

 

 

 

 

 

 

Shareholders’ equity

      44,632

 

      39,409

 

 

 

 

 

 

Total liabilities and shareholders’

 

 

 

 

equity

$  208,818

 

$  211,397

 

   

 

 

 

 

Back to Top

Back to Home Page