The Middleby Corporation : Reports Second Quarter Results and Announces New Credit Facility
08/08/2012| 06:40pm US/Eastern
The Middleby Corporation (NASDAQ: MIDD), a leading worldwide
manufacturer of equipment for the commercial foodservice and food
processing industries, today reported net sales and earnings for the
second quarter ended June 30, 2012. Net earnings for the second quarter
were $31,045,000 or $1.67 per share on net sales of $260,040,000 as
compared to the prior year second quarter net earnings of $19,628,000 or
$1.06 per share on net sales of $210,855,000.
2012 Second Quarter Financial Highlights
Net sales increased 23.3% in the second quarter as compared to the
prior year second quarter. Sales from acquisitions amounted to $38.8
million or 18.4% during the quarter. Excluding the impact of
acquisitions, sales increased 4.9% during the second quarter.
Net sales at the company's Commercial Foodservice Equipment Group
increased 10.2% in the second quarter as compared to the prior year
second quarter. Excluding the impact of the acquisitions completed in
the second quarter of 2011, net sales of Commercial Foodservice
Equipment increased by 5.4%.
Net sales at the company's Food Processing Equipment Group increased
94.8% in the second quarter as compared to the prior year second
quarter. During fiscal 2011, the company completed the acquisitions of
Auto-Bake, Maurer-Atmos, Danfotech, Drake and Armor Inox. During
fiscal 2012, the company completed the acquisition of Baker Thermal
Solutions (formerly Turkington). Excluding the impact of these
acquisitions, sales increased by 2.1% in the second quarter.
Gross profit in the second quarter increased to $101.8 million from
$85.3 million and the gross margin rate decreased from 40.5% to 39.2%.
The decline in the gross margin rate reflects a higher mix of sales
from the Food Processing Equipment Group with lower gross margins, due
in part to recent acquisitions.
Operating income increased 28.7% in the second quarter to $45.3
million from $35.2 million in the prior year quarter.
Non-cash expenses during the second quarter of 2012 amounted to $9.5
million, including $2.2 million of depreciation, $4.1 million of
intangible amortization and $3.2 million of non-cash share based
Provisions for income taxes increased to $12.7 million at a 29.0%
effective rate in comparison to $11.9 million at a 37.8% effective
rate in the prior year quarter. The second quarter tax provision
reflects the favorable impact of increased foreign earnings at lower
tax rates and a non-recurring benefit from reduced state tax exposures.
Total debt at the end of the 2012 second quarter amounted to $274.2
million as compared to $317.3 million at the end of 2011. The
reduction in debt is net of the funding for acquisition activities of
$10.6 million during the first six months of 2012.
On August 7, 2012, subsequent to the end of the second quarter, the
company entered into a new five-year $1.0 billion multi-currency
senior revolving credit agreement, with the potential under certain
circumstances to increase to $1.350 billion. This facility replaces
the company's pre-existing $600 million senior revolving credit
facility, which had an original maturity of December 2012. The new
facility bears an interest rate of LIBOR plus a margin of 1.5%, which
is adjusted quarterly based upon the company's leverage ratio. The new
facility provides for availability to fund acquisitions and share
repurchases so long as the company maintains certain financial ratios.
Selim A. Bassoul Chairman and Chief Executive Officer, commented, "In
the second quarter, at our Commercial Foodservice Equipment Group, we
realized continued growth reflecting increased sales in emerging markets
and with chain restaurant customers as they upgrade equipment and adopt
new technologies to improve the efficiency of store operations. This
growth was offset in part by lower sales in Europe due to difficult
market conditions which we anticipate will continue in the near term."
Mr. Bassoul continued, "A modest increase in sales at our Food
Processing Equipment Group is expected to accelerate in the second half
as we anticipate continued strength in demand from food processors
looking to expand and modernize existing plant operations and new
customers developing processing operations overseas due to increasing
demand for pre-cooked and pre-processed foods in developing markets."
Mr. Bassoul further commented, "We continue to further initiatives to
integrate the newly acquired businesses and realize synergies across the
expanded Food Processing Equipment Group, which we expect to benefit the
profit margins in future periods."
Mr. Bassoul concluded, "We were very pleased to have entered into a new
and expanded credit facility. This facility provides for increased
financing availability to fund growth initiatives and greater
flexibility to meet the business needs for our broadened scope of
operations as we continue to expand globally."
A conference call will be held at 8:00 a.m. Central time on Thursday,
August 9, 2012 and can be accessed by dialing (866) 200-6965 and
providing conference code 74236775# or through the investor relations
section of The Middleby Corporation website at www.middleby.com.
An audio replay of the call will be available approximately one half
hour after its completion and can be accessed by calling (866) 206-0173
and providing code 274999#.
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 global leader in the foodservice equipment
industry. The company develops, manufactures, markets and services a
broad line of equipment used for commercial food cooking, preparation
and processing. The company's leading equipment brands serving the
commercial foodservice industry include Anets®, Beech®, Blodgett®,
Blodgett Combi®, Blodgett Range®, Bloomfield®, Britannia®, Carter
Hoffmann®, CookTek®, CTX®, Doyon®, FriFri®, Giga®, Holman®, Houno®,
IMC®, Jade®, Lang®, Lincat®, MagiKitch'n®, Middleby Marshall®, Nu-Vu®,
PerfectFry®, Pitco Frialator®, Southbend®, Star®, Toastmaster®,
TurboChef® and Wells®. The company's leading equipment brands serving
the food processing industry include Alkar®, Armor Inox®, Auto-Bake®,
Baker Thermal Solutions® (formerly Turkington), Cozzini®, Danfotech®,
Drake®, Maurer-Atmos®, MP Equipment® and RapidPak®. The Middleby
Corporation has been recognized by Forbes as one of the Best Small
Companies every year since 2005, most recently in October 2011.
For more information about The Middleby Corporation and the company
brands, please visit www.middleby.com.
THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
(Amounts in 000's, Except Per Share Information)
Three Months Ended
Six Months Ended
2nd Qtr, 2012
2nd Qtr, 2011
2nd Qtr, 2012
2nd Qtr, 2011
Cost of sales
Selling & distribution expenses
General & administrative expenses
Income from operations
Interest expense and deferred
financing amortization, net
Other (income) expense, net
Earnings before income taxes
Provision for income taxes
Net earnings per share:
Weighted average number shares:
THE MIDDLEBY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in 000's)
Jun 30, 2012
Dec 31, 2012
Cash and cash equivalents
Accounts receivable, net
Prepaid expenses and other
Current deferred tax assets
Total current assets
Property, plant and equipment, net
LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt
Total current liabilities
Long-term deferred tax liability
Other non-current liabilities
Total liabilities and stockholders' equity
The Middleby Corporation Darcy Bretz, Investor and Public
Relations, (847) 429-7756 or Tim FitzGerald, Chief Financial
Officer, (847) 429-7744