Earnings Review and Free Research Report: Middleby’s EPS Improved 5.47%; Beat Estimates

Research Desk Line-up: Eaton Post Earnings Coverage

LONDON, UK / ACCESSWIRE / August 31, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on The Middleby Corp. (NASDAQ: MIDD) (“Middleby”), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=MIDD, following the Company’s posting of its second quarter financial results on August 09, 2017. The food preparation equipment Company’s operating income increased by 9.1%. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Get more of our free earnings reports coverage from other constituents of the Diversified Machinery industry. Pro-TD has currently selected Eaton Corporation PLC (NYSE: ETN) for due-diligence and potential coverage as the Company announced on August 01, 2017, its financial results for Q2 2017. Register for a free membership today, and be among the early birds that get access to our report on Eaton when we publish it.

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Earnings Reviewed

Middleby’s net sales were $579.34 million for the second quarter 2017 compared to net sales of $580.46 million for Q2 2016. The Company stated that sales related to recent acquisitions added $29.2 million, or 5.0%, in the reported quarter, while the impact of foreign exchange rates on foreign sales translated into US Dollars reduced net sales by approximately $10.7 million, or 1.8%. Middleby’s revenue numbers missed analysts’ expectations of $587 million.

During Q2 2017, Middleby’s gross profit increased to $234.6 million from $233.5 million. The Company’s gross margin rate increased to 40.5% in the reported quarter from 40.2% in the prior year’s comparable quarter; reflecting an improvement in profitability for both the Food Processing Equipment Group and the Residential Kitchen Equipment Group, due to the favorable impact of restructuring initiatives at the AGA group.

For Q2 2017, Middleby’s operating income increased 9.1% to $122.1 million from $111.9 million in Q2 2016. For the reported quarter, the Company’s operating income included $11.5 million of restructuring charges related to cost reduction initiatives, which were associated primarily with AGA. Additionally, the Company realized a $12.0 million gain on the sale of a manufacturing facility in connection with the relocation to an upgraded facility which will allow for improvement in production efficiencies and consolidation of certain operations.

During Q2 2017, Middleby’s non-cash expenses included in operating income amounted to $20.9 million, including $7.4 million of depreciation, $10.5 million of intangible amortization, and $3.0 million of non-cash share based compensation.

Middleby’s net earnings were $77.57 million, or $1.35 per share, for Q2 2017 compared to $72.89 million, or $1.28 per share, in Q2 2016. In the reported quarter, the Company’s net earnings were reduced by restructuring expenses and non-cash expenses associated with the finalization of purchase accounting adjustments for Follett, and offset by the gain on sale of a manufacturing facility. The impact of these items reduced earnings per share by $0.04 in Q2 2016. Middleby’s earnings, adjusted for non-recurring costs, were $1.39 per share and came in ahead of Wall Street’s estimates of $1.38.

Segment Results

Middleby’s net sales from the Commercial Foodservice Equipment Group grew 4.0% to $333.8 million compared to $321.0 million in Q2 2016. During the fiscal year 2016, the Company completed the acquisition of Follett. Excluding the impact of this acquisition, sales decreased by 4.4% in the reported quarter, or 3.3% excluding the impact of foreign exchange.

For Q2 2017, Middleby’s net sales from the Food Processing Equipment Group advanced 10.7% to $92.4 million compared to $83.5 million in Q2 2016. During the fiscal year 2017, the Company completed the acquisition of Burford. Excluding the impact of this acquisition, Middleby’s sales increased by 8.0% in Q2 2017, or 8.5% excluding the impact of foreign exchange.

During Q2 2017, Middleby’s net sales from Residential Kitchen Equipment Group decreased 13.0% to $153.2 million compared to $176.0 million in Q2 2016. Excluding the impact of foreign exchange, sales decreased 9.1% in the reported quarter.

Cash Matters

Middleby’s net debt, defined as debt less cash, amounted to $738.4 million at the end of Q2 2017 compared to $663.6 million at the end of the fiscal year 2016. The Company’s debt reflected the funding of the Burford, CVP Systems, and Sveba Dahlen acquisitions completed in the reported quarter.

Stock Performance

At the close of trading session on Wednesday, August 30, 2017, Middleby’s stock price slightly declined 0.01% to end the day at $118.99. A total volume of 749.74 thousand shares were exchanged during the session, which was above the 3-month average volume of 502.82 thousand shares. The Company’s shares are trading at a PE ratio of 22.30. At Wednesday’s closing price, the stock’s net capitalization stands at $6.78 billion.

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