THE MIDDLEBY CORPORATION REPORTS FOURTH QUARTER RESULTS

Rolling Meadows, IL, February 17, 2000 - The Middleby Corporation (NASDAQ: MIDD), a global supplier of equipment to the foodservice industry, today reported improved earnings on lower net sales in the fiscal fourth quarter ended January 1, 2000.

 For the fourth quarter, net sales decreased to $31,588,000 from $33,687,000 in the prior year period.  Earnings before taxes increased to $813,000 as compared to a loss before taxes of $5,191,000 in the fourth quarter of 1998.  The Company reported a net loss after tax of $389,000, or $.04 per diluted share as compared to a net loss of $4,407,000, or $.42 per diluted share in the prior year period.

 For the entire year, Middleby reported earnings before taxes of $2,171,000 and a net loss after taxes of $994,000, or $.10 per diluted share, on sales of $132,541,000.  For the 1998 fiscal year the Company reported a loss before taxes of $4,195,000 and a net loss after taxes of $3,984,000, or $.37 per diluted share, on sales of $132,320,000.  The fiscal 1999 results included $2,208,000 of restructuring charges as compared to $3,457,000 of non-recurring charges in 1998. 

 The fourth quarter and full year results reflect tax provisions of $1,202,000 and $3,165,000, respectively, primarily related to the Company’s domestic earnings, while no benefit has been recorded related to losses incurred at certain foreign operations.  Despite the recorded tax provision, the Company does not pay U.S. federal taxes, other than AMT tax, due to tax loss carryforwards available from prior years.

 The 7% decline in sales from the prior year fourth quarter was due in part to lower sales at the Company’s domestic operations resulting from initiatives to exit various unprofitable product offerings inconsistent with the Company’s business strategy.  International sales remained constant with the prior year period, reflecting an increase in sales by the Company’s international distribution and service subsidiary, Middleby Worldwide, offset by reduced sales at the Company’s manufacturing operations in the Philippines.  Within the international markets, sales in Europe and Latin America were strong, while activity within the Asian markets remained mixed. 

Gross margin of 33.1% in the fourth quarter of 1999 improved from 19.9% in the comparative prior year period. The steady improvement in gross margins throughout 1999 reflects the impact of cost reduction efforts during the year to reduce materials costs and manufacturing overhead.  Gross margins also benefited from an improvement in the mix of product sales resulting from the exit of unprofitable product lines.

 Income from operations for the quarter increased to $1,677,000 as compared to a loss from operations in the prior year of $3,910,000, which included non-recurring charges of $1,932,000.  The improvement in operating income reflects the gross margin improvement and improved cost structure of the Company.

 Commenting on the Company’s performance for the year, David P. Riley, President and Chief Executive Officer, said, “The results for the year reflect significant improvement in the operating and financial performance of our U.S. based manufacturing operations. The consolidation of the domestic manufacturing operations into the Cooking Systems Group under the leadership of Group President Selim Bassoul, created synergies which provided for enhanced marketing and distribution capabilities and a more effective cost structure. Effective January 1, 2000, the Company’s Philippines based manufacturing operations were integrated within the Cooking Systems Group, which we expect to provide further benefits and better enable the Company to capitalize on the low cost manufacturing capabilites of that operation.  The integration of the Middleby Philippines Corporation operations within the Cooking Systems Group further strengthens the Company’s international manufacturing presence and ability to support the expansion of major restaurant chain concepts into the international marketplace.”

 Mr. Riley added “The results of Middleby Worldwide demonstrated improvement during the fourth quarter.  Cost reduction initiatives executed during 1999 have resulted in a lower cost structure moving into fiscal 2000.  These initiatives included the closure of the division headquarters and U.S. based international sales office for Europe and Latin America during the fourth quarter.  The sales functions have been transferred to existing international regional offices and the headquarters integrated within the Company’s corporate office. We have refocused our product offerings to ensure our sales and service efforts are directed towards those products which best complement the Company’s core competencies and provide the greatest profitability.  Additionally, controls over asset management have been enhanced, as evidenced by a 33% reduction in inventory levels in 1999 at this business unit.”

 Mr. Riley concluded, “We are very pleased with the accomplishments of 1999 and look to continue the progress made towards realizing our long-term operating and financial goals. We are optimistic about the prospects for 2000 and believe we are in a position to capitalize upon the opportunities provided by the expansion of the global foodservice industry.”

 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 Marshallâ, Southbend â, and Toastmaster â.  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 site,

http://www.middleby.com.

 Contact:                      David P. Riley, Chief Executive Officer – 847-758-3880

                                    David B. Baker, Chief Financial Officer – 847-429-7915

                                                                                   

CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in 000’s, Except Per Share Information)

                                                   Three Months Ended                         Year Ended

 

Jan 1,

Jan 2,

Jan 1,

Jan 2,

 

 2000

 1999

 2000 

  1999

 

 

 

 

 

Net sales

$   31,588

$  33,687

$  132,541

$ 132,320

Cost of sales

   21,126

   26,979

    91,551

    96,082

 

 

 

 

 

    Gross profit

10,462

 6,708

40,990

 36,238

 

 

 

 

 

Selling & distribution expense   

    4,536

    5,283

    18,694

    20,817

General & administrative expense

     4,249

3,403

14,430

12,304

Non-recurring expense

           0

__1,932

     2,208

     3,457

 

 

 

 

 

    (Loss) income from operations

    1,677

    (3,910)

    5,658

    (340)

 

 

 

 

 

Interest expense and deferred          

 

 

 

 

    financing amortization, net

672

   755

    2,724

   2,916

Other expense (income), net

        192

       526

        763

       939

 

 

 

 

 

    (Loss) earnings before income taxes

   813

(5,191)

     2,171

 (4,195)

 

 

 

 

 

(Benefit) provision for income taxes

      1,202

     (784)

      3,165

     (211)

 

 

 

 

 

    Net (loss) earnings

       (389)  

    (4,407)   

       (994)  

   (3,984)

 

 

 

 

 

Net earnings (loss) per share:

 

 

 

 

 

 

 

 

 

    Basic

$     (0.04)

$     (0.42)

$     (0.10)

$    (0.37)

 

 

 

 

 

    Diluted

$     (0.04)

 $     (0.42)

$     (0.10)

$    (0.37)

 

Average number shares:

 

 

 

 

 

 

 

 

 

    Basic

      10,171

      10,390

      10,161

     10,761

 

 

 

 

 

    Diluted

      10,283

      10,390

      10,277

     10,872

 

 

THE MIDDLEBY CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(Amounts in 000’s)

                                                                                         As of                                              As of

 

Jan 1,

 

Jan. 2,

 

 

2000 

 1999  

 ASSETS

 

 

 

 

Cash and cash equivalents

$    14,536

 

$      6,768

 

Accounts receivable, net

    24,919

 

    24,330

 

Inventories, net

16,884

 

20,456

 

Other current assets

     4,039

 

      3,836

 

    Total current assets

60,378

 

55,390

 

 

 

 

 

 

Property, plant and equipment, net

21,281

 

22,596

 

 

 

 

 

 

Excess purchase price over net

 

 

 

 

    assets acquired, net

13,077

 

13,617

 

 

 

 

 

 

Other assets

     4,312

 

      8,076

 

 

 

 

 

 

    Total assets

$    99,048

 

$    99,679

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt

$      7,131

 

$       1,893

 

Accounts payable

8,861

 

10,945

 

Accrued expenses

     16,052

 

     11,943

 

    Total current liabilities

32,044

 

24,781

 

 

 

 

Long-term debt

21,004

 

25,932

 

 

 

 

 

 

Other non-current liabilities

2,832

 

4,232

 

 

 

 

 

 

Shareholders’ equity

    43,168

 

     44,734

 

 

 

 

 

 

    Total liabilities and shareholders’

 

 

 

 

    equity

$    99,048

 

$     99,679

 

   

 

 

 

 

 

 

For further information about Middleby, visit the Company's World Wide Web site, http://www.middleby.com.