The Middleby Corporation (MIDD) reported impressive results for the second quarter of 2013. Earnings per share came in at $2.00, up roughly 19.8% from $1.67 reported in the year-ago quarter. Earnings also surpassed the Zacks Consensus Estimate of $1.79 by 11.7%.
Revenues: Revenues generated by Middleby increased 39.9% year over year to $363.8 million and were above the Zacks Consensus Estimate of $353.0 million. This includes revenues from the recent acquisitions to the tune of $76.1 million or 29.3% of sales.
In the reported quarter, revenues from the Commercial Foodservice Equipment Group increased 13.5% year over year while an increase of 11.0% was recorded excluding the impact of the acquisition of Nieco.
Revenues from the Food Processing Equipment Group soared 29.0% year over year in the quarter, aided by the acquisition of Stewart Systems in Sep 2012. Excluding this, revenues grew 9.4% year over year.
Revenues from the Residential Kitchen Equipment Group were $58.8 million.
Costs/Margins: Middleby reported a 43.6% year-over-year increase in its cost of sales, which also represented 62.5% of total revenue. Gross margin received a set back and declined from 39.2% to 37.5%, due to the low-margin Viking products. Excluding the Viking Range acquisition, it came in at 38.9%.
Selling and distribution expenses, as a percentage of revenues, declined 25 basis points (bps) year over year to 10.6% while general and administrative expenses declined 51 bps to 10.3% of total revenue. Operating profit surged 33.1% year over year to $60.3 million, against $45.3 million recorded in the second quarter of 2012.
Balance Sheet: The Middleby Corporation had cash and cash equivalents balance of approximately $34.4 million at the end of second-quarter 2013, versus $43.8 million in the preceding quarter. Long-term debt was $617.4 million, compared with $636.8 million at the end of the first quarter of 2013.
Guidance: The company did not provide any specific guidance range for the coming quarters; however, management is optimistic that the acquisitions undertaken would significantly boost revenue growth in the future, accompanied by growth in international markets. Moreover, the company is quite confident of the organic growth in the Commercial Foodservice Equipment Group and the Food Processing Equipment Group, in the coming quarters, based on better adaptability to new technologies.
Other Stocks to Consider
EnPro Industries, Inc. (NPO) announced second-quarter 2013 operating earnings of 87 cents per share, 26.1% above the Zacks Consensus Estimate of 69 cents.
Gorman-Rupp Co. (GRC) announced second-quarter 2013 operating earnings of 43 cents per share, 30.3% above the Zacks Consensus Estimate of 33 cents.
Barnes Group Inc. (B) announced second-quarter 2013 operating earnings of 47 cents per share, in line with the Zacks Consensus Estimate.
Middleby currently carries a Zacks Rank #3 (Hold).
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