The Middleby Corporation Reports Record Q3 Results
Oct 29, 2004
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The Middleby Corporation, a manufacturer of restaurant and foodservice cooking equipment, reported record sales and earnings for the third quarter and 9 months ended Oct. 2, 2004.
Net earnings for the third quarter, including a tax benefit of U.S. $3.2 million or $0.32 per share, were $10.368 million, or $1.03 per share, on net sales of $70.621 million as compared to the prior year third quarter net earnings of $5.651 million or $0.59 per share on net sales of $60.894 million. Excluding this tax benefit, net earnings for the quarter were $7.201 million, or $0.72 per share.
Net earnings, including the third-quarter tax benefit, for the 9 months ended Oct. 2, 2004 were $24.248 million, or $2.42 per share, on net sales of $205.996 million as compared to net earnings of $12.857 million, or $1.37 per share, on net sales of $182.695 million in the prior year first 9 months. Excluding the third-quarter tax benefit, net earnings for the first 9 months of 2004 were $21.081 million, or $2.10 per share.
The company also announced the following financial highlights:
net sales were up 16.0 percent in the third quarter and 12.8 percent for the first 9 months, reflecting the impact of new product introductions and favorable market conditions;
gross margin rate was 37.4 percent for the third quarter and 38.0 percent for the first 9 months as compared to 37.2 percent and 35.2 percent in the prior year respective periods, reflecting the benefits of increased volumes and higher margins on new products offset, in part, by increased steel prices;
operating income margins were 17.8 percent for the third quarter and 18.1 percent for the first 9 months improved from 16.4 percent and 14.3 percent, respectively, in the third quarter and first 9 months of 2003,
total debt was reduced to $40.615 million for the quarter ended Oct. 2, 2004 from $48.315 million at the end of the second quarter of 2004 and $56.500 million at the end of 2003; and
third-quarter tax benefit was $3.2 million associated with an adjustment to tax reserves for closed tax years.
"We are pleased with our 2004 performance to date," said Selim A. Bassoul, president and CEO. "Sales growth momentum continues to fuel our strong financial results and reflects the impact of new products introduced in 2003 and 2004 and an increase in the replacement business with customers upgrading older equipment."
Mr. Bassoul added that during the third quarter, the positive margin benefits from increased volumes and higher margin new product sales were partly offset by more than $1 million in steel price increases as compared to third quarter 2003. "These price increases, which are impacting many industries, are difficult to fully pass onto our customers and, thus, will continue to have a negative impact on margins in the short term," he said. "We are committed to improve operating efficiencies and reduce operating costs in an effort to offset the impact of steel price increases and achieve higher profit margins."
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