The Middleby Corporation Reports Second Quarter Results

The Middleby Corporation (NASDAQ: MIDD), a leading worldwide manufacturer of restaurant and foodservice cooking equipment, today reported net sales and earnings for the second quarter ended July 4, 2009. Net earnings for the second quarter were $13,714,000 or $0.74 per share on net sales of $158,601,000 as compared to the prior year second quarter net earnings of $17,117,000 or $0.99 per share on net sales of $173,513,000. Net earnings for the six months ended July 4, 2009 were $27,781,000 or $1.51 per share on net sales of $340,147,000 as compared to net earnings of $30,298,000 or $ 1.76 per share on net sales of $334,396,000 in the prior year first six months.

2009 Second Quarter Financial Highlights

• The company completed the acquisitions of CookTek, LLC ('CookTek') on April 26, 2009 and Anetsberger Brothers, Inc. ('Anets') on April 30, 2009 for a combined $11.4 million in cash. The financial results of these acquisitions are reflected in the 2009 second quarter statements of earnings and balance sheet from the date of acquisition.

• Net sales declined 8.6% in the second quarter. Excluding the impact of acquisitions, sales declined 21.2% during the second quarter. Sales of the Commercial Foodservice Group declined 6.5% for the quarter and sales of the Food Processing Group declined 23.4% for the quarter. Net sales continued to be impacted by adverse economic conditions.

• Operating income decreased to $26,945,000 from $32,492,000 as a result of lower sales volumes, while operating margins were 17.0% as compared to 18.7% in the prior year second quarter.

• Depreciation and amortization amounted to $2,870,000 in the 2009 second quarter and as compared to $3,329,000 in the 2008 second quarter.

• Net interest expense and deferred financing costs amounted to $2,857,000 in the second quarter as compared to $3,039,000 in the prior year second quarter. Reduced interest expense reflects the benefit of lower interest rates, offset in part by higher levels of debt to fund acquisition activities.

• Total debt at the end of the 2009 second quarter amounted to $321,059,000 as compared to $346,089,000 at the end of the first quarter 2009. Net borrowings decreased during the second quarter despite funding the acquisition of Cooktek and Anets and the related transaction costs. The company completed the acquisitions of CookTek and Anets for a combined $11.4 million in cash, which was funded utilizing the company's debt facilities. The company's debt is financed under a $497.5 million senior revolving credit facility that matures in December 2012.

Selim A. Bassoul Chairman and Chief Executive Officer said, 'As expected, industry conditions continued to be difficult throughout the second quarter. Purchases by our customers both in the Commercial Foodservice Group and the Food Processing Group continued to be impacted by the general economic environment. As sales have declined, we have continued to focus on maintaining our profitability levels through cost reduction initiatives and remaining disciplined with our product pricing. During the second quarter we also realized the benefit of lower steel costs which lessened the impact of reduced sales volumes during the quarter.'

Mr. Bassoul continued, 'We anticipate that the business environment may continue to be challenging for the remainder of the year. Accordingly, we continue to implement further measures to reduce our costs to offset lower volumes in the near term. These cost reduction initiatives include consolidation of two manufacturing facilities. These facility consolidations which are currently underway are anticipated to be largely completed by end of the year and will result in cost savings in excess of $8 million annually. We will begin to see the initial benefits of these consolidations in the fourth quarter of this year.'

'We were pleased with our second quarter cash flow and debt reduction. We were able to pay down over $25 million in debt during the second quarter despite the funding of $11.4 million for acquisition activities and we anticipate operating cash flows will continue to remain strong for the remainder of the year.'

'Turbochef acquired in January posted another profitable quarter. Post acquisition initiatives, which were largely completed in the first quarter, resulted in operating margins approaching 20% in the second quarter. We continue to be very excited about this technology and the opportunity to expand the market for the Turbochef product line.'

Mr. Bassoul added, 'We were also pleased to have announced the acquisitions of CookTek and Anets. These acquisitions continue to strengthen Middleby's portfolio of leading brands and innovative technologies. The acquisition of Anets further adds to Middleby's position as a leading supplier of fryers and griddles and provides for significant synergies with our existing operations. CookTek is the recognized leader in induction cooking. We believe the demand for induction cooking technology will increase in the next few years due to its energy savings, speed of cooking, safety features, and ventless cooking applications.'

Mr. Bassoul concluded, 'Despite the measures to reduce our overall costs during this period, we continue to invest in new product development and in our selling organization. A new sales and support team, focused on the top restaurant chain customers, was established in the first quarter. We believe there are significant opportunities to further broaden our business with these accounts with our increased product offerings and new innovative technologies. The initial results from this team in a short period of time have been very positive and we believe we will begin to realize sales opportunities over the next several quarters.'

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