Feb. 27, 2018
The Middleby Corporation (NASDAQ: MIDD), a leading worldwide manufacturer of equipment for the commercial foodservice, food processing, and residential kitchen industries, today reported net sales and earnings for the fourth quarter and full fiscal year ended December 30, 2017. Net earnings for the fourth quarter were $75,186,000 or $1.35 diluted earnings per share on net sales of $632,859,000 as compared to the prior year fourth quarter net earnings of $80,936,000 or $1.41 diluted earnings per share on net sales of $596,817,000. Net earnings for the fiscal year ended December 30, 2017 were $298,128,000 or $5.26 diluted earnings per share on net sales of $2,335,542,000 as compared to net earnings of $284,216,000 or $4.98 diluted earnings per share on net sales of $2,267,852,000 in the prior year.
2017 Fourth Quarter and Full Year Financial Highlights
Selim A. Bassoul Chairman and Chief Executive Officer, commented, “At the Commercial Foodservice Equipment Group, we realized a modest sales increase in the general market, which was more than offset by lower sales to our major restaurant chain customers. Sales to our major restaurant chain customers remained impacted in the quarter as replacement purchases were less than prior years as customers evaluated new equipment solutions, supporting operational improvements and new menu initiatives. We have a healthy pipeline of sales opportunities and momentum with these existing and new chain customers, which we anticipate will convert into in sales in 2018. Sales were also impacted by strategic initiatives to consolidate our independent selling organization, which resulted in disruption during the quarter. We are excited about this initiative allowing us to strengthen and simplify our selling organization for the future. This effort has allowed us to align with our strongest sales representatives to carry our portfolio of leading brands and product innovations. We expect this reorganization will be largely completed during the first quarter of 2018 and we will realize benefits during the remainder of 2018. We also anticipate the new tax law changes may provide further momentum in purchase from our restaurant customers.”
Mr. Bassoul continued, “At our Residential Kitchen Equipment Group, the fourth quarter sales decline reflects the impact of lower revenues at the AGA Group due to acquisition integration initiatives and reorganization of non-core businesses within the AGA portfolio. We have remained focused on simplifying those businesses and reducing costs, which have resulted in significant improvements in profitability. Sales at Viking also continued to be lower in the fourth quarter reflecting the lingering impact of the product recall and legacy service and quality issues, however we have seen improvement in order trends and the favorable impact of leveraging the investments made in the past several years in company owned distribution and service. We are very excited about the new portfolio of products introduced across all the brands in the segment and have increased products displays at our dealer partners in addition to our newly established brand centers in New York and Chicago.”
“At the Food Processing Equipment Group, the decline in revenues reflects the nature of this business with large projects resulting in sales volatility. While the pipeline moving into 2018 remains strong, orders have slowed on large projects, which will continue to impact the first half of the year. However, we have a positive view on the food processing industry and are working with our customers on new and innovative solutions to support production and new food product initiatives.”
“Although 2017 was a challenging year, we were pleased with the continued positioning of the company for future profitable growth and success. Our focus continued to be on reducing our cost structure and gaining further operational efficiencies at recently acquired companies and across all three of our business segments. As we have expanded the business platforms, we enhance the realization of synergies across these units including initiatives focused on supply chain, production capabilities, and sales organization simplification. We expect this will be reflected in continued profit margin improvements in 2018 and beyond.”
“We are also pleased to have completed seven acquisitions in 2017 which have further added to our Commercial Foodservice and Food Processing platforms. These acquisitions have added approximately $300 million in annualized revenues and expanded our product portfolio with highly complementary and innovative products.”
A conference call will be held at 10 a.m. Central Time on Wednesday, February 28 and can be accessed by dialing (888) 391-6937 or (315) 625-3077 and providing conference code 6178444#. The conference call is also accessible through the Investor Relations section of the company website at www.middleby.com. A replay of the conference call will be available two hours after the conclusion of the call by dialing (855) 859-2056 and entering conference code 6178444#.
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.