The Middleby Corporation, a manufacturers of restaurant and foodservice cooking equipment, reported record net earnings of U.S. $4,597,000 or $0.49 per share on net sales of $63,595,000 for the second quarter ended June 28, 2003 compared with net earnings of $2,814,000 or $0.31 per share on net sales of $62,478,000 in the prior year second quarter. Earnings for the 6 months ended June 28, 2003 were $7,206,000 or $0.77 per share on sales of $118,362,000 as compared to net earnings of $3,854,000 or $0.43 per share on net sales of $116,969,000 in the prior year first half.
Net sales in the second quarter increased by 1.8 percent over net sales of the prior year quarter. The net sales increase reflects the impact of market share gains and new product introductions offsetting difficult economic conditions during the second quarter affecting the foodservice equipment industry and generally lower purchases by large chain customers.
Gross profit in the second quarter of 2003 was $22,650,000 as compared to $21,521,000 in the second quarter of the prior year. The gross margin rate in the second quarter improved to 35.6% versus 34.4 percent for the prior year quarter. Improvement in the gross margin resulted from cost reduction actions implemented in the second quarter of last year, which included the consolidation and closure of two manufacturing facilities. Gross margin improvement also benefited from an improved sales mix with greater sales of higher margin product, driven in part by new product introduction.
Commenting on the company's performance for the quarter, Selim A. Bassoul, President and Chief Executive Officer, said, "We were pleased with the second quarter net sales increase in a difficult economic environment. The war in Iraq and the outbreak of SARS created uncertainty with our customers, which slowed the rate of store openings and orders from our customers during the first half of this year. We have, however, experienced a rebound in our order rate in the later half of the second quarter."
Mr. Bassoul continued, "The increase in net sales during the quarter resulted largely from market share gains due in part to new product introductions, which include the Blodgett XCEL® high performance convection oven, the new series of Pitco Solstice® high efficiency fryers and Blodgett Range®. The Blodgett Range® line is a completely new market for Blodgett, which had solely offered ovens in the past. We continue to invest heavily on the development of innovative products and are working closely with our customers to introduce unique products focused on energy savings, labor savings and increased speed of cooking. We expect to introduce additional products in the second half of 2003 that should benefit our sales efforts moving into 2004. We have increased our training and advertising programs in an effort to bring these new product introductions to market quickly."
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