Premium diversified machinery company Middleby Corp. MIDD reported mixed results for fiscal fourth-quarter 2015 (ended Jan 2, 2016). The company also posted the full-year results.
The company’s quarterly net earnings per share came in at $1.16, up 27.5% year over year. The bottom line also surpassed the Zacks Consensus Estimate of 98 cents. However, earnings excluded restructuring expenses of 28 cents per share associated with the AGA acquisition.
For fiscal 2015, net earnings per share came in at $3.36 compared with $3.40 accrued in 2014.
Inside the Headlines
Net sales grew 22.9% year over year to $534.7 million, but missed the Zacks Consensus Estimate of $558 million. Net sales declined 2.8% due to the strong U.S. dollar, which also eroded the value of the international sales.
However, Middleby’s recent acquisitions more than offset the currency impact, contributing 28.5% to sales growth.
Middleby’s cost of sales in the quarter rose 26.3% year over year to $335.8 million, representing 62.8% of total revenue.
Gross profit margin decreased 170 basis points (bps) year over year to 37.2%.
Selling and distribution expenses totaled $56.4 million, up 24% year over year. General & administrative expenses were $52.9 million compared with $38.3 million recorded a year ago. Operating income decreased 11.7% year over year to $72.6 million.
For the full year, net sales were $1826.6 million compared with $1636.5 million recorded last year.
Segmental Details
Net sales from the Commercial Foodservice Equipment Group decreased 0.5% year over year for fiscal fourth-quarter, while increasing 7.7% for the full year.
Net sales from the Food Processing Equipment Group were down 0.3% year over year in the quarter and decreased 7.8% in 2015.
The Residential Kitchen Equipment Group’s net sales increased a massive 139.8% for fourth-quarter 2015 and 49.7% for the fiscal year.
Liquidity
At the end of fourth-quarter fiscal 2015, Middleby’s cash and cash equivalents were $55.5 million, up from $43.9 million recorded on Jan 3, 2015. Long-term debt was $734 million compared with $588.8 million as on Jan 3, 2015.
Outlook
The Zacks Rank #4 (Sell) company believes that increased demand for innovative technologies from chain-restaurant customers will support revenues. The company aims to increase the top line and the bottom line through strategic growth programs, cost saving plans and greater operational efficiency.
Stocks to Consider
Some better-ranked stocks within the industry are Graco Inc. GGG, Kaman Corporation KAMN and Nordson Corporation NDSN. All the three stocks currently have a Zacks Rank #2 (Buy).
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