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 second quarter ended July 2, 2016. Net
earnings for the second quarter were $72,891,000 or $1.28 per share
on net sales of $580,456,000 as compared to the prior year second
quarter net earnings of $54,267,000 or $0.95 per share on net sales
of $436,291,000.
2016 Second Quarter Financial
Highlights
- Net sales increased 33.1% compared to
the prior year second quarter. Sales related to recent acquisitions
added $127.1 million or 29.1%, in the second quarter. The impact of
foreign exchange rates on foreign sales translated into U.S.
Dollars decreased net sales by approximately $4.9 million or 1.1%,
during the second quarter. Excluding the impact of foreign
exchange, organic net sales growth increased 5.1% during the second
quarter.
- Net sales at the company’s Commercial
Foodservice Equipment Group increased by $32.2 million, or 11.1%,
to $321.0 million in the second quarter as compared to $288.8
million the prior year second quarter. During fiscal 2015, the
company completed the acquisition of Induc. During fiscal 2016, the
company completed the acquisition of Follett. Excluding the impact
of these acquisitions, net sales increased 5.2% in the second
quarter, or 6.9% excluding the impact of foreign exchange.
- Net sales at the company’s Food
Processing Equipment Group increased by $11.6 million, or 16.1%, to
$83.5 million in the second quarter as compared to $71.9 million
the prior year second quarter. Excluding the impact of foreign
exchange, organic net sales increased 16.3% at the Food Processing
Equipment Group.
- Net sales at the company’s Residential
Kitchen Equipment Group increased by $100.5 million, or 133.1%, to
$176.0 million in the second quarter as compared to $75.5 million
in the prior year second quarter. During fiscal 2015, the company
completed the acquisitions of AGA and Lynx. Excluding the impact of
these acquisitions, net sales decreased by 12.6% in the second
quarter, or 12.2% excluding the impact of foreign exchange. The
decline in revenues reflects lower sales at U-Line due to the prior
year favorable impact of a new product launch and lower sales at
Viking impacted by the 2015 recall of certain legacy products
manufactured prior to acquisition.
- Gross profit in the second quarter
increased to $233.5 million from $172.9 million, reflecting the
impact of increased sales from acquisitions. The gross margin rate
increased to 40.2% from 39.6%. The gross margin rate for the
quarter was impacted by lower gross margins at the recent
acquisition of AGA. Excluding the impact of AGA, the gross margin
rate would have increased to 41.6% for the current quarter.
Improved margins at all three business segments resulted from
favorable sales mix and the benefit of efficiency gains, including
results from integration initiatives.
- Operating income increased 34.2% in the
second quarter to $111.9 million from $83.4 million in the prior
year quarter. Operating income during the 2016 second quarter
included $6.4 million of restructuring charges related to
acquisition integration initiatives associated with AGA, as
compared to $1.5 million in charges in the 2015 second quarter
related to Viking restructuring initiatives.
- Non-cash expenses included in operating
income during the second quarter of 2016 amounted to $22.2 million,
including $6.6 million of depreciation, $9.4 million of intangible
amortization and $6.2 million of non-cash share based
compensation.
- Other income in the quarter was $3.8
million compared to $0.4 million in the prior year quarter,
consisting mainly of foreign exchange gains.
- The provision for income taxes during
the second quarter amounted to $36.8 million, at an effective rate
of 33.5%, as compared to a $25.4 million provision at a 31.9%
effective rate in the prior year quarter. The prior year quarter
effective rate included non-recurring foreign tax benefits.
- Net earnings per share increased 34.7%
to $1.28 in the second quarter as compared to $0.95 in the prior
year quarter. Restructuring expenses reduced net earnings per share
by $0.07 and $0.02 in the 2016 and 2015 second quarter periods,
respectively.
- Total debt at the end of the second
quarter amounted to $916.3 million as compared to $766.1 million at
the end of the fiscal 2015. Second quarter debt reflected the
funding of the Follett acquisition completed on May 31, 2016.
Selim A. Bassoul Chairman and Chief Executive Officer,
commented, “We realized solid sales growth at the Commercial
Foodservice Equipment Group in the second quarter as business
internationally continued to remain positive with double digit
growth. Domestically we have strong demand from our restaurant
chain customers that continue to adopt our innovative equipment
solutions; however the first half of 2016 was comparatively
challenging due to several large chain rollouts that occurred in
the first half of 2015.”
“We also realized strong sales growth in the second quarter at
the Food Processing Equipment Group given the large backlog we
carried into 2016, which translated into second quarter sales.
Incoming order rates also continued to be solid as we realized
continued demand for our innovative equipment solutions as
customers remain focused on increasing production capacities and
improving efficiencies in their operations. We also made further
progress toward our profitability initiatives at this segment and
realized continued expansion of gross margins and EBITDA margins.”
said Mr. Bassoul.
Mr. Bassoul continued, “At our Residential Kitchen Equipment
Group, the second quarter organic sales decline reflects the impact
of lower revenues at U-Line as we overlap new product introductions
in the first half of the prior year. Also we had the continuing
residual impact of the prior year product recall at Viking related
to products manufactured during the previous ownership. Despite
this continuing impact, we remain confident about prospects at
Viking given the substantial investments we have made in new
products, quality and after sales service, which we expect will
support future sales growth.”
Mr. Bassoul added, “We continue to focus on our profit
improvement initiatives at the recent acquisition of AGA
Rangemaster Group and its related portfolio of premium residential
brands, including AGA, Rangemaster, La Cornue, Marvel, Mercury,
Falcon, Rayburn, Stanley, Grange and Fired Earth. We realized
improvement in EBITDA margins which expanded during the second
quarter and anticipate this business will achieve double digit
EBITDA margins in the second half of the year.”
Mr. Bassoul concluded, “We are also very excited to have
recently announced the acquisition of Follett, a leader in ice
machines and dispensing equipment. Follett is well recognized as an
industry leader in innovation and product performance. The
acquisition is highly complementary to our growing beverage
platform and provides for combined opportunities with our major
restaurant chain customers, as well as expansion opportunities in
international markets.”
Conference Call
A conference call will be held at 10:00 a.m. Central time on
August 11, 2016 and can be accessed by dialing (888) 391-6937 or
(315) 625-3077 and entering conference code 61236206#. 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 or (404) 537-3406 and entering
conference code 61236206#.
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 in the commercial
foodservice, food processing, and residential kitchen equipment
industries. The company's leading equipment brands serving the
commercial foodservice industry include Anets®, Beech®, Blodgett®,
Blodgett Combi®, Blodgett Range®, Bloomfield®, Britannia®,
Carter-Hoffmann®, Celfrost®, Concordia®, CookTek®, CTX®, Desmon®,
Doyon®, Eswood®, frifri®, Follett®, Giga®, Goldstein® , Holman®,
Houno®, IMC®, Induc®, Jade®, Lang®, Lincat®, MagiKitch'n®, Market
Forge®, Marsal®, Middleby Marshall®, MPC®, Nieco®, Nu-Vu®,
PerfectFry®, Pitco Frialator®, Southbend®, Star®, Toastmaster®,
TurboChef® and Wells® and Wunder-Bar®. The company’s leading
equipment brands serving the food processing industry include
Alkar®, Armor Inox®, Auto-Bake®, Baker Thermal Solutions®,
Cozzini®, Danfotech®, Drake®, Maurer-Atmos®, MP Equipment®,
RapidPak®, Spooner Vicars®, Stewart Systems® and Thurne®. The
company’s leading equipment brands serving the residential kitchen
industry include AGA®, AGA Cookshop®, Brigade®, Falcon®, Fired
Earth®, Grange®, Heartland®, La Cornue®, Leisure Sinks®, Lynx®,
Marvel®, Mercury®, Rangemaster®, Rayburn®, Redfyre®, Sedona®,
Stanley®, TurboChef®, U-Line® and Viking®.
For more information about The Middleby Corporation and the
company brands, please visit www.middleby.com
THE MIDDLEBY CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in 000’s, Except Per Share
Information)
(Unaudited)
Three Months Ended
Six Months Ended
2nd Qtr, 2016
2nd Qtr, 2015
2nd Qtr, 2016
2nd Qtr, 2015 Net sales $
580,456 $ 436,291 $ 1,096,811 $ 842,887 Cost of sales
346,954 263,402
666,536 512,436 Gross
profit 233,502 172,889 430,275 330,451 Selling &
distribution expenses 58,025 45,332 111,714 92,441 General &
administrative expenses 57,174 42,719 113,277 81,993 Restructuring
expenses
6,390
1,478
6,996
6,077
Income from operations 111,913 83,360 198,288 149,940
Interest expense and deferred financing
amortization, net
6,059 4,048 11,335 7,797 Other (income) expense, net
(3,838)
(366) (4,638)
4,195 Earnings before income taxes 109,692
79,678 191,591 137,948 Provision for income taxes
36,801 25,411
64,162
45,450
Net earnings
$ 72,891
$ 54,267 $
127,429 $ 92,498
Net earnings per share: Basic
$
1.28 $ 0.95 $
2.23 $ 1.62 Diluted
$ 1.28 $ 0.95
$ 2.23 $ 1.62
Weighted average number shares:
Basic
57,022 56,963
57,037 56,940
Diluted
57,022 56,965
57,037 56,941
THE MIDDLEBY CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Amounts in 000’s)
(Unaudited)
Jul 2,
2016
Jan 2,
2016
ASSETS Cash and cash equivalents $ 74,031 $ 55,528 Accounts
receivable, net 316,797 282,534 Inventories, net 389,878 354,150
Prepaid expenses and other 46,009 39,801 Prepaid taxes 8,270 11,426
Current deferred taxes
- 51,723
Total current assets 834,985 795,162 Property, plant and
equipment, net 216,097 199,750 Goodwill 1,051,954 983,339 Other
intangibles, net 792,945 749,430 Long-term deferred tax assets
11,341 11,438 Other assets
24,348
22,032 Total assets
$ 2,931,670
$ 2,761,151 LIABILITIES AND
STOCKHOLDERS’ EQUITY Current maturities of long-term debt $
53,755 $ 32,059 Accounts payable 158,115 157,758 Accrued expenses
305,522 320,154 Total current
liabilities 517,392 509,971 Long-term debt 862,571 734,002
Long-term deferred tax liability 67,433 113,010 Accrued pension
benefits 166,864 207,564 Other non-current liabilities 32,483
29,774 Stockholders’ equity
1,284,927
1,166,830 Total liabilities and stockholders’
equity
$ 2,931,670 $
2,761,151
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160810006239/en/
The Middleby CorporationDarcy Bretz, Investor and Public
Relations(847) 429-7756orTim FitzGerald, Chief Financial
Officer(847) 429-7744
Middleby (NASDAQ:MIDD)
Historical Stock Chart
From Sep 2024 to Oct 2024
Middleby (NASDAQ:MIDD)
Historical Stock Chart
From Oct 2023 to Oct 2024