The Middleby Corporation
) reported impressive results for the first quarter 2013.
Earnings per share came in at $1.65, up roughly 37.5% from $1.20
reported in the year-ago quarter. Earnings also surpassed the
Zacks Consensus Estimate of $1.30.
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The above mentioned earnings exclude certain charges related to
The Middleby Corporation's acquisition integration initiative,
excluding which earnings per share in the first quarter of 2013
come to $1.39.
Revenue generated by The Middleby Corporation increased 43.1%
year over year to $327.5 million and above the Zacks Consensus
Estimate of $314.0 million. This includes revenue contributions
from Viking and the recent acquisitions to the tune of $74.0
As a result of the acquisition of Viking Range Corporation in Dec
2012, the company added a new segment- Residential Kitchen
Equipment Group to its existing two segments. The new segmental
reporting is effective from the first quarter 2013, a brief
discussion on which is provided below:
In the reported quarter, revenue from Commercial Foodservice
Equipment Group increased 10.7% year over year while an increase
of 8.6% was recorded excluding the impact of the acquisition of
Revenue from Food Processing Equipment Group soared 41.4% year
over year in the quarter, aided by the acquisitions of Baker
Thermal Solutions in Jul 2012 and Stewart Systems in Sep 2012.
Excluding this, the revenue grew 18.4% year over year.
Revenue from Residential Kitchen Equipment Group was $58.7
The Middleby Corporation reported a 45.9% year-over-year increase
in its cost of sales, which also represented 63.0% of total
revenue. Gross margin received a set-back and plummeted from
38.2% to 37.0% while excluding the Viking Range acquisition, it
came in at 38.9%.
Selling and distribution expenses, as a percentage of revenue,
were relatively flat year over year at 11.0% while general and
administrative expenses surged 190 basis points. Operating
margin, excluding the impact of the acquisition integration
initiative charges, was at 15.0% versus 16.0% in the year-ago
The Middleby Corporation had a cash and cash equivalents balance
of approximately $43.8 million, up 27.4% sequentially exiting the
first quarter 2013. Long-term debt more than doubled from $258.2
million to $636.8 million.
The Middleby Corporation is hopeful that the demand for its cost
and energy saving equipment would rise in the quarters ahead,
considering the persistent rise in labor costs. Also, management
is optimistic that the acquisitions undertaken would
significantly boost revenue growth in the future.
The Middleby Corporation is one of the leading food service and
processing equipment makers and has operations in the United
States, Canada, Asia, Europe, the Middle East, and Latin America.
The Middleby Corporation currently has a market capitalization of
$2.8 billion and also carries a Zacks Rank #2 (Buy).
Other stocks to watch out for in the industry are
Altra Holdings Inc.
Tri-Tech Holding, Inc.
), each carrying a Zacks Rank #1 (Strong Buy).