The Middleby Corporation Reports First Quarter Results
The Middleby Corporation (NASDAQ: MIDD), a leading worldwide manufacturer of equipment for the commercial foodservice, food processing, and residential kitchen industries, today reported net earnings for the 2021 first quarter of
“We have positive momentum entering 2021 with strong orders and rising backlogs in all three business segments. Profitability across all three business segments increased as well, as we realized the benefits of our operating initiatives while also to moving forward our strategic initiatives with investments in sales, technology and service capabilities. We continue to proactively manage ongoing challenges due to COVID, particularly with supply chain disruption and rising costs, to minimize customer impact. Employee safety remains our top priority and we have kept the precautions at our facilities in place to best protect our workforce,” said Tim FitzGerald, CEO of The Middleby Corporation.
2021 First Quarter Financial Results
-
Net sales increased
11.9% in the first quarter over the comparative prior year period. Excluding the impacts of acquisitions, a disposition and foreign exchange rates, sales increased8.4% in the first quarter over the comparative prior year period, reflecting improvements in market conditions and consumer demand since the initial impact of COVID-19.
- Organic net sales (a non-GAAP measure) increases were reported for all segments due to improvements in market conditions and consumer demand in the first quarter of 2021. A reconciliation of reported net sales by segment is as follows:
|
Commercial
|
|
Residential
|
|
Food
|
|
Total
|
||||
Reported Net Sales Growth |
8.6 |
% |
|
26.4 |
% |
|
7.9 |
% |
|
11.9 |
% |
Acquisitions/(Disposition) |
4.2 |
% |
|
(5.8) |
% |
|
— |
% |
|
1.8 |
% |
Foreign Exchange Rates |
1.2 |
% |
|
3.5 |
% |
|
1.3 |
% |
|
1.6 |
% |
Organic Net Sales Growth (1) (2) |
3.2 |
% |
|
28.7 |
% |
|
6.5 |
% |
|
8.4 |
% |
(1) Organic net sales growth defined as total sales growth excluding impact of acquisitions, a disposition and foreign exchange rates |
|||||||||||
(2) Totals may be impacted by rounding |
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-
Total backlog at the end of the first quarter of 2021 amounted to a record level of
$724.5 million as compared to$522.7 million at the end of the fiscal 2020. The increase was driven by order growth, primarily at the Commercial Foodservice Group and Residential Kitchen Group, amounting to backlog levels in excess of40% over prior year end when excluding backlog from businesses acquired during the year.
-
Adjusted EBITDA (a non-GAAP measure) was
$161.3 million , in the first quarter of 2021 due to the impact of higher sales volumes and profitability initiatives. A reconciliation of organic adjusted EBITDA (a non-GAAP measure) by segment is as follows:
|
Commercial
|
|
Residential
|
|
Food
|
|
Total
|
||||
Adjusted EBITDA |
24.5 |
% |
|
21.1 |
% |
|
20.4 |
% |
|
21.3 |
% |
Acquisitions |
(0.3) |
% |
|
— |
% |
|
— |
% |
|
— |
% |
Foreign Exchange Rates |
(0.1) |
% |
|
— |
% |
|
— |
% |
|
— |
% |
Organic Adjusted EBITDA (1) (2) |
24.8 |
% |
|
21.1 |
% |
|
20.4 |
% |
|
21.3 |
% |
|
|
|
|
|
|
|
|
||||
(1) Organic Adjusted EBITDA defined as Adjusted EBITDA excluding impact of acquisitions and foreign exchange rates. |
|||||||||||
(2) Totals may be impacted by rounding |
|||||||||||
-
Operating cash inflows during the first quarter amounted to
$59.7 million in comparison to$87.1 million in the prior year period. The total leverage ratio per our credit agreements was below 2.9x. Our trailing twelve month bank agreement pro-forma EBITDA was$550.5 million .
-
Cash balances at the end of the quarter were
$309.3 million . Net debt, defined as debt excluding the unamortized discount associated with the Convertible Notes less cash, at the end of the 2021 fiscal first quarter amounted to$1.5 billion as compared to$1.6 billion at the end of fiscal 2020. Additionally, our current borrowing availability is approximately$1.4 billion .
"In Commercial Foodservice, orders continue to improve as our customers benefit from the pent-up demand for indoor dining as operators reopen their restaurants. Our chain customers are performing well with conditions becoming more positive for casual dining. We are seeing a slight rebound in the travel and leisure industries, which have been greatly challenged due to the pandemic. Restaurants continue to refine their procedures for delivery, carry out, drive-through and curbside pickup while chain restaurants who previously had these processes in place are upgrading their practices to shorten wait times, expand cooking throughput, and reduce labor needs. Global challenges remain with COVID still impacting many international markets including India and Latin America but overall, consumer demand has been constant and provides us with a growth opportunity for our exclusive solutions,” said Mr. FitzGerald.
“At our recently-opened Middleby Innovation Kitchens we continue to have heavy customer activity and rave reviews of our state-of-the-art facility and experienced chefs on staff. This one-of-a-kind customer experience has been a successful new avenue to promote our latest advanced technologies. The timing has been ideal for opening the Middleby Innovation Kitchens earlier this year and the Dallas-area location is easy to access. We are finding customers want a hands-on experience as they look to transform their current operations,” commented Mr. FitzGerald.
"At our Residential Kitchen businesses, there is an ongoing, high demand for new and existing homes which is driving strong sales and a favorable market dynamic for residential appliances. Remodeling projects in existing kitchens remains very popular, as it was in 2020. Recently debuted product innovations have been well-received across our portfolio of premium brands. The residential virtual sales experience has gained momentum, while in-person tours of our showrooms are now also available. We look forward to the completion and opening of our Dallas showroom this summer, while continuing other investments in targeted digital marketing initiatives and cultivating new and longstanding relationships with the designer community.”
“At the Food Processing Group, we are pleased to have high interest and good order activity on our newest technologies such as the Alkar TurboChef oven and the Mauer accelerated drying room technology. Both innovations provide value to customers through substantially greater capacity and faster cycle times in a smaller footprint. Through these types of new products, we are able to expand our offerings in new and targeted markets including cured meats, alternative proteins and pet food. Given customer operating challenges, we anticipate growing interest for our automation solutions to address labor availability and employee safety concerns,” Mr. FitzGerald concluded.
Conference Call
A conference call will be held at 11 a.m. Central Time on Thursday, May 6 and can be accessed through the Investor Relations section of middleby.com. If online access is not available, participants can join the call by dialing (888) 391-6937 or (315) 625-3077 and providing conference code 1355164#. A replay of the conference call will be available two hours after the conclusion of the call by dialing (855) 859-2056 and entering conference code 1355164#. To access the supplemental presentation, visit the Investor Relations page at middleby.com.
Statements in this press release or otherwise attributable to the company regarding the company's business which are not historical facts 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. Any forward-looking statement speaks only as of the date hereof, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
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®, APW Wyott®, Bakers Pride®, Beech®, BKI®, Blodgett®, Blodgett Combi®, Bloomfield®, Britannia®, Carter-Hoffmann®, Celfrost®, Concordia®, CookTek®, Crown®, CTX®, Desmon®, Deutsche Beverage®, Doyon®, Eswood®, EVO®, Firex®, Follett®, frifri®, Giga®, Globe®, Goldstein®, Holman®, Houno®, IMC®, Induc®, Ink Kegs®, Inline Filling Systems®, Jade®, JoeTap®, Josper®, L2F®, Lang®, Lincat®, MagiKitch’n®, Market Forge®, Marsal®, Meheen®, Middleby Marshall®, MPC®, Nieco®, Nu-Vu®, PerfectFry®, Pitco®, QualServ®, RAM®, Southbend®, Ss Brewtech®, Star®, Starline®, Sveba Dahlen®, Synesso®, Tank®, Taylor®, Thor®, Toastmaster®, TurboChef®, Ultrafryer®, Varimixer®, Wells® Wild Goose® and Wunder-Bar®. The company’s leading equipment brands serving the food processing industry include Alkar®, Armor Inox®, Auto-Bake®, Baker Thermal Solutions®, Burford®, Cozzini®, CV-Tek ®, Danfotech®, Deutsche Process®, Drake®, Glimek®, Hinds-Bock®, Maurer-Atmos®, MP Equipment®, Pacproinc®, RapidPak®, Scanico®, Spooner Vicars®, Stewart Systems®, Thurne® and Ve.Ma.C.®. The company’s leading equipment brands serving the residential kitchen industry include AGA®, AGA Cookshop®, Brava®, EVO®, La Cornue®, Leisure Sinks®, Lynx®, Marvel®, Mercury®, Rangemaster®, Rayburn®, Redfyre®, Sedona®, Stanley®, TurboChef®, U-Line® and Viking®.
THE MIDDLEBY CORPORATION |
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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
|||||||||
(Amounts in 000’s, Except Per Share Information) |
|||||||||
(Unaudited) |
|||||||||
|
Three Months Ended |
||||||||
|
1st Qtr, 2021 |
|
1st Qtr, 2020 |
||||||
Net sales |
$ |
758,058 |
|
|
|
$ |
677,459 |
|
|
Cost of sales |
482,184 |
|
|
|
427,269 |
|
|
||
|
|
|
|
||||||
Gross profit |
275,874 |
|
|
|
250,190 |
|
|
||
|
|
|
|
||||||
Selling, general and administrative expenses |
154,957 |
|
|
|
143,942 |
|
|
||
Restructuring expenses |
794 |
|
|
|
834 |
|
|
||
Gain on sale of plant |
(1,050 |
) |
|
|
— |
|
|
||
Income from operations |
121,173 |
|
|
|
105,414 |
|
|
||
|
|
|
|
||||||
Interest expense and deferred financing amortization, net |
16,067 |
|
|
|
15,713 |
|
|
||
Net periodic pension benefit (other than service costs & curtailment) |
(11,373 |
) |
|
|
(10,089 |
) |
|
||
Other (income) expense, net |
(1,691 |
) |
|
| |||||
