MIDDLEBY CORP, 10-K405, 1996-03-29

MIDDLEBY CORP
10-K405, 1996-03-29
REFRIGERATION & SERVICE INDUSTRY MACHINERY

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<PAGE>

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
---------

X Annual Report Pursuant to Section 13 or 15(d) of the
-----
Securities Exchange Act of 1934 (Fee Required)

FOR THE FISCAL YEAR ENDED DECEMBER 30, 1995

or
Transition Report Pursuant to Section 13 or 15(d) of the
-----
Securities Exchange Act of 1934 (No Fee Required)

Commission File No. 1-9973

THE MIDDLEBY CORPORATION
------------------------
(Exact name of Registrant as specified in its charter)

DELAWARE 36-3352497
------------------ ----------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)

1400 TOASTMASTER DRIVE, ELGIN, ILLINOIS 60120
- --------------------------------------- -----
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 847-741-3300
------------
Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

Title of each class
-------------------
COMMON STOCK,
PAR VALUE $0.01 PER SHARE

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90
days. Yes X No .
----- -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( X )

The aggregate market value of the voting stock held by nonaffiliates
of the Registrant as of March 15, 1996 was approximately $29,257,000.
The number of shares outstanding of the Registrant's class of common
stock, as of March 15, 1996, was 8,399,838 shares.

Documents Incorporated by Reference
-----------------------------------
Part III of Form 10-K incorporates by reference the Company's definitive proxy
statement to be filed pursuant to Regulation 14A in connection with the 1996
annual meeting of stockholders.

<PAGE>

THE MIDDLEBY CORPORATION AND SUBSIDIARIES

DECEMBER 30, 1995

FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

PAGE
------
PART I

Item 1. Business......................................... 1

Item 2. Properties....................................... 7

Item 3. Legal Proceedings................................ 8

Item 4. Submission of Matters to a Vote of
Security Holders............................... 8

PART II

Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters................ 8

Item 6. Selected Financial Data.......................... 9

Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.. 10

Item 8. Financial Statements and Supplementary Data...... 12

Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure......... 31

PART III

Item 10. Directors and Executive Officers of the
Registrant..................................... 31

Item 11. Executive Compensation........................... 31

Item 12. Security Ownership of Certain Beneficial
Owners and Management.......................... 31

Item 13. Certain Relationships and Related
Transactions................................... 31

PART IV

Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K........................ 31

<PAGE>

PART 1

ITEM 1. BUSINESS

GENERAL

The Middleby Corporation ("Middleby" or the "Company"), through its subsidiaries
and their operating divisions, is engaged in the design, manufacture and sale of
commercial and institutional foodservice equipment. It designs, develops,
manufactures and markets a broad line of equipment used for the cooking,
preparation and refrigeration of food for commercial and institutional kitchens
and restaurants, along with a line of refrigerated display coolers used
primarily by soft drink bottlers in supermarkets and other retail outlets.

PRINCIPAL PRODUCTS AND OPERATING DIVISIONS

The Company's operations are conducted principally through three domestic and
two international business units. Each of the business units operates
independently of the others with its own management, marketing, manufacturing
and product development capabilities. The business unit Presidents or General
Managers report to the Company's President and Chief Executive Officer, and the
Company's corporate staff performs cash management, capital expenditure
authorization, financial reporting, planning, corporate accounting, and certain
other marketing, service and operations management, and administrative
functions.

MIDDLEBY COOKING SYSTEMS GROUP, Elgin, IL
Principal product lines manufactured at this operating division are Middleby
Marshall-Registered Trademark- conveyor ovens, CTX-Registered Trademark-
infrared ovens, Toastmaster-Registered Trademark- counterline cooking and
warming equipment; and Titan-Registered Trademark- mixers. The Middleby
Marshall and CTX products and the Toastmaster and Titan products are handled
through two distinct independent sales and marketing divisions within the
Cooking Systems Group.

Middleby Marshall is one of the leading producers of conveyor cooking equipment
in the world. Its conveyor ovens utilize a patented process, "Jet-Sweep-TM-"
air impingement, that forces heated air at high velocities through a system
of nozzles above and below the food product which is placed on a moving
conveyor belt. This process achieves faster baking times and greater
consistency of bake than conventional ovens. As a manufacturer of baking and
cooking equipment since 1888, Middleby Marshall is renowned for quality and
durability. Its ovens are used by the majority of major global and domestic
pizza chains and other restaurants and institutions.

The CTX line of conveyor ovens utilizes patented infrared cooking and precision
control technology.

Toastmaster commercial electric cooking and warming equipment include toasters,
hot food servers, foodwarmers, griddles, fryers, convection ovens and ranges.
Toastmaster products feature energy saving and food safety technologies such as
that offered in the AccuMiser-TM- griddle. As a long-term supplier to major
restaurant chains, Toastmaster has developed the capabilities to provide
customized equipment for a chain's particular needs. An example is the
development of a conveyor toaster for a major quick service chain in

<PAGE>

1995, resulting in improved operating efficiencies and less food waste.
Toastmaster has recently entered into distribution arrangements with a European
manufacturer of rotisserie cooking and merchandising display equipment.

The Company does not produce consumer products under the Toastmaster-Registered
Trademark- name, as the rights to the Toastmaster brand name for consumer
markets are owned by an unaffiliated company, Toastmaster, Inc.

SOUTHBEND, Fuquay-Varina, NC
Southbend-Registered Trademark- designs, manufactures and markets core cooking
equipment specified for use by the professional chef, as well as standardized
equipment for general use in restaurants and institutions. Principal products
are heavy duty gas ranges, convection ovens, broilers, fryers and griddles.
Southbend also offers a broad line of steam cooking equipment under the
SteamMaster-Registered Trademark- name, some of which it produces and some is
produced for it by other manufacturers.

VICTORY, Cherry Hill, NJ
Victory-Registered Trademark- designs, manufactures and markets commercial
refrigeration equipment and systems for the foodservice and beverage industries.
Products include reach-in and undercounter refrigerators and freezers, pizza and
food preparation units, rapid chill freezers, proofing cabinets, display cases
and merchandisers. In fiscal 1993, Victory introduced a limited line of
refrigerated display coolers which is distributed primarily to soft drink
bottlers, generally affiliated with a major soft drink company, for placement in
supermarkets and other retail outlets. Victory has designed certain of these
coolers under exclusive purchase agreements with a major soft drink company. In
late 1995, Victory introduced a line of glass door merchandisers with exclusive
features for the general bottling market.

ASBURY ASSOCIATES, INC., Miramar, FL
Asbury Associates ("Asbury") is an export management and distribution company
engaged in the representation and distribution of foodservice equipment. Asbury
sells the Company's product lines and certain non-competing product lines of
other American and European manufacturers throughout the world (except for
Canada, where the Company has a distribution company under the name of Escan).
Asbury is headquartered in Miramar, Florida with Asian sales and administrative
operations based in Manila, the Philippines. Asbury has sales offices in
Bilbao, Spain, Paris, France, Taipei, Taiwan and Jakarta, Indonesia. The
Company acquired a majority interest in Asbury in April, 1990, which was
increased to 80% in 1991. Asbury has established two additional business units:
ICES, a foodservice equipment dealer in the Philippines and Asbury S.L., a
foodservice equipment distributor in Spain and France. A distribution company
in Taiwan is expected to be established in April, 1996.

Asbury has the ability to offer customers a complete package of equipment,
delivered and installed in over 100 countries throughout the world. For a local
country distributor, Asbury provides centralized sourcing of a broad line of
American and European equipment with complete export management services,
including export documentation, freight forwarding, equipment warehousing and
consolidation, installation, warranty service and part support.

<PAGE>

MIDDLEBY PHILIPPINES CORPORATION,the Philippines
Middleby Philippines Corporation ("MPC") was incorporated in 1995 as part of a
major expansion of the Company's manufacturing capabilities in the Philippines
and is comprised of a fabricated equipment division and standard equipment
division.

The fabricated equipment division, Fab-Asia, Inc.("Fab-Asia"), designs,
engineers, fabricates and installs semi-custom kitchen equipment units used
primarily in conjunction with standard equipment manufactured in the United
States to make a complete kitchen installation. Fab-Asia's customers are
primarily Asian operations of major foodservice chains and hotels.

The standard equipment division is expected to begin operations in early 1996 in
a newly constructed 54,000 square foot facility outside of Manila. The division
will manufacture certain products of the Company's U.S. based divisions for sale
in the Asian markets.

The Company owns 80% of MPC. Fab-Asia was formed in 1991 at which time the
Company acquired a majority interest, and increased its interest to 80% in 1994.
The operating assets of Fab-Asia were transferred to MPC on January 1, 1996.

THE MARKET AND CUSTOMERS

The Company's products are sold primarily through independent dealers and
distributors for use in the commercial and institutional foodservice industry.
Certain large restaurant and hotel chain customers own purchasing organizations
that manage product procurement for their own systems. End-user customers
include full service restaurants, quick service restaurants, cafeterias, hotels
and resorts, recreational and sports facilities, retail outlets such as
supermarkets and convenience stores, and private and public institutions, such
as schools, hospitals, long-term care facilities, correctional facilities,
military establishments and government agencies. The products are marketed in
the United States and in over 100 countries through a combination of the
Company's own sales personnel and international marketing subsidiaries, and an
extensive network of independent dealers, distributors, consultants, sales
representatives and agents.

During the past several decades, growth in the foodservice market in the United
States has been driven primarily by population growth, economic growth and
demographic changes, including the emergence of families with multiple wage-
earners and growth in the number of higher-income households, leading to a
demand for convenience in food preparation and consumption. Eating out and
carry out continue to be on an upward trend in the U.S., though slower than the
1970's and 1980's due to lower economic growth. Higher growth is evidenced in
the international markets as U.S. national restaurant concepts, particularly
quick service chains, increasingly enter those markets. According to a leading
industry publication, by the end of 1994, the top 100 chain-restaurant companies
in the United States were operating more than 16 percent of their units outside
the United States. Aggressive expansion in international markets is expected to
be driven by the explosive population growth and economic development in
nonindustrialized and industrializing nations, along with the

<PAGE>

favorable operating economics for the foodservice operator.

The foodservice equipment market generally has grown in response to the primary
growth factors of the foodservice industry noted above. However, large
foodservice chains generally have a greater influence on the equipment market as
a result of new store openings, remodeling and upgrade programs and equipment
purchases to support new menu items. According to published industry sources,
the foodservice equipment market in the U.S. increased 6.2% to $5.85 billion in
1995 and is expected to grow by 6.2% in 1996. The industry's top 50 specifying
chain giants, per a leading publication, had 7.4% growth in specified equipment
during 1995 led by new construction and non-traditional site development.

The United States has had only moderate growth in the foodservice equipment
market since the economic downturn of 1991-1992. The international equipment
market, however, has grown more substantially. The Company believes that the
ability to support the domestic and international growth of foodservice and
hotel chains through worldwide sales and service networks will be a key element
in establishing its market position.

International sales accounted for approximately 28% of total sales in fiscal
1995, 26% of total sales in fiscal 1994 and 24% of total sales in fiscal 1993.
No customer accounted for more than 10% of sales in fiscal 1995, 1994 or 1993.

The backlog of orders was $14,357,000 at December 30, 1995, all of which is
expected to be filled during 1996. The Company's backlog was $14,101,000 at
December 31, 1994. The backlog is not necessarily indicative of the level of
business expected for the year, as there is generally a short time between order
receipt and shipment for the majority of the Company's products.

MARKETING AND DISTRIBUTION

Each of the Company's business units is responsible for the marketing of its
products, under the direction of the unit's President or General Manager, Sales
Manager and supporting personnel. Each business unit manages its own sales,
promotion and marketing programs with coordination and support from corporate
sales and marketing functions.

The Company's marketing strategy is conducted through each of the principal
distribution channels to reach the worldwide foodservice market. These are:
direct sales to the major foodservice chains; sales to foodservice equipment
dealers for distribution to the broader foodservice market; sales through
consultant-specifiers representing large project equipment installations; and
international sales primarily through the Asbury distribution organization. The
Company's relationships with major national restaurant chains is primarily
handled through an integrated effort of top-level executive and sales management
at the corporate and division level to best service the customer's needs.
Management believes that its extensive capabilities in engineering,
manufacturing, field service and technical sales support enables the Company to
respond effectively to a chain's requirements.

<PAGE>

There is a broad base of non-exclusive foodservice equipment dealers in the U.S.
serving the independent end-users. The Company's products are marketed through
a combined network of approximately 2,000 foodservice equipment dealers, who in
turn are supported by over 300 manufacturers' marketing representatives.
International sales are primarily made through Asbury's distribution network to
larger end-users and to independent local country distributors. The Company's
products are serviced by independent service agencies, and supported through a
factory training and certification program for technicians.

COMPETITION

In general, the foodservice equipment industry is highly competitive and
fragmented. Within a given product line, the industry remains fairly
concentrated, with typically a small number of competitors accounting for the
bulk of the line's industry-wide sales. Industry competition includes companies
who manufacture a broad line of commercial foodservice equipment products and
those who specialize in a particular product line. Competition in the industry
is based upon many factors, including name recognition, product features and
design, quality, price, serviceability, after-market service and deliverability.
The Company attempts to differentiate its products through advanced
technological features and benefits. Management believes that the demand for
labor saving, energy efficient and flexible equipment will increase, driven by
quick service chains that face labor supply issues, space limitations and
increasing operating costs. The Company also focuses on the user interface and
serviceability factors across its global product markets.

In the international markets, the Company competes with U.S. manufacturers and
numerous local competitors. Management believes the Company's international
export management and distribution capabilities uniquely positions it to provide
value added services to the U.S. and international based chains, as well as to
local country distributors offering a complete line of kitchen equipment.

The Company believes it is among the largest full-line manufacturers of
foodservice equipment, both in the United States and worldwide, though some of
its competitors are units of operations which are larger than the Company and
possess greater financial and personnel resources.

Among the Company's major domestic competitors are Welbilt Corporation (a
subsidiary of Berisford International plc), Specialty Equipment Companies, Inc.,
G.S. Blodgett Corp., and Hobart and Vulcan Hart, which are both units of Premark
International, Inc.

SOURCES OF SUPPLY

The Company purchases its raw materials and component parts from a number of
suppliers. The majority of the Company's material purchases are standard
commodity-type materials, such as stainless steel, electrical components,
hardware and various components. Such materials and parts generally are
available in adequate quantities from numerous suppliers. Some component parts
are obtained from sole

<PAGE>

sources of supply for reasons the Company deems advantageous. In such
instances, management believes it can substitute other suppliers as it may
require. The majority of the required fabrication is done internally through
the use of automated equipment. Certain equipment and accessories are
manufactured by other suppliers for sale by the Company. The Company believes
it enjoys good relationships with its suppliers and considers the present
sources of supply to be generally adequate for its present and anticipated
future requirements.

LICENSES, PATENTS, AND TRADEMARKS

Middleby Marshall has an exclusive license from Patentsmith II, Inc. to
manufacture, use and sell in the United States impingement type ovens for
commercial food applications in which the interior length or width of a
rectangular cooking area, or in which the diameter of a circular cooking area,
equals or exceeds 36 inches. The Patentsmith II license covers numerous
patents, some of which extend beyond the year 2000. Middleby Marshall also
holds an exclusive sublicense from Lincoln Foodservice Products, Inc., a
division of Welbilt Corporation, to manufacture, use and sell throughout the
world, other than the United States and Japan, impingement type ovens of the
above-described dimensions for commercial food applications. This sublicense
covers the foreign analogues of the patents covered by the Patentsmith II
license and grants Middleby Marshall rights of first refusal for a similar
sublicense in Japan. The Patentsmith II license and the Lincoln sublicense
expire upon the expiration of the last patented improvement covered by the
license. While the loss of the Patentsmith II license would have an adverse
effect on the Company, management believes it is capable of designing,
manufacturing and selling similar equipment, although not as technologically
advanced. Lincoln and Fuji Chubo Setsubi Company, Ltd. are the only other
foodservice equipment manufacturers licensed under the Patentsmith II patents.

The Company holds numerous patents covering technology and applications related
to various products, equipment and systems. Management believes the expiration
of any one of these patents would not have a material adverse effect on the
overall operations or profitability of the Company.

The Company owns numerous trademarks and trade names; among them, Middleby
Marshall-Registered Trademark-, CTX-Registered Trademark-, Southbend-Registered
Trademark-, SteamMaster-Registered Trademark-, Toastmaster-Registered
Trademark-, Titan-Registered Trademark-, and Victory-Registered Trademark- are
registered in the U.S. Patent and Trademark Office and in various foreign
countries.

EMPLOYEES

As of December 30, 1995, the Company employed 1,055 persons. Of this amount,
approximately 397 were management, administrative, sales, engineering and
supervisory personnel; approximately 267 were hourly production non-union
workers; and approximately 391 were hourly production union members. Included
in these totals were 244 individuals employed outside of the United States, of
which 117 were management, sales, administrative and engineering personnel, and
127 were hourly production non-union workers. Principal union contracts are
with locals of the International Brotherhood of Teamsters at the

<PAGE>

Company's Elgin, Illinois facility and the Seafarers International at the
Company's Cherry Hill, New Jersey facility. The union contract with the
International Brotherhood of Teamsters expires on May 1, 1997 and the contract
with the Seafarers International expires on May 29, 1998. It is management's
opinion that the relationships between its employees, unions and management are
good.

ITEM 2. PROPERTIES

The Company's principal executive offices are located in the Elgin, Illinois
manufacturing facility. The Company's property, plant and equipment are
encumbered pursuant to its current credit agreements. (See Note 4 of the Notes
to Consolidated Financial Statements.)

The principal properties of the Company are listed below:

Building
Division and Principal Square Owned/
Location Function Footage Leased
- ------------ --------- -------- ------
Middleby Cooking Manufacturing, 207,000 Owned
Systems Group Warehousing and
Elgin, Illinois Offices

Southbend Manufacturing, 131,000 Owned
Fuquay-Varina, Warehousing and
North Carolina Offices

Victory Manufacturing, 235,000 Owned
Cherry Hill, Warehousing and
New Jersey Offices

Asbury Assoc., Inc. Offices and 18,000 Leased(a)
Miramar, Florida Warehousing

Middleby Philippines Manufacturing and 54,000 Owned
Corporation Warehousing
Laguna, the
Philippines

Fab-Asia, Inc. Manufacturing, and 31,400 Leased(b)
Manila, the Warehousing
Philippines

Notes:

(a) Lease expires October, 2002 with payments of approximately $12,000
per month.

(b) The Fab-Asia facilities in metro-Manila comprise two adjacent
locations within a government sponsored industrial/ export development
compound; combined rent payments are approximately $5,000 per month for
terms expiring in fiscal 1996.

At various other locations the Company leases small amounts of office space for
administrative and sales functions, and in certain instances limited short-term
inventory storage; these principal other

<PAGE>

locations are in Irvine, CA, Manila, the Philippines, Bilbao, Spain, Paris,
France, Taipei, Taiwan, Jakarta, Indonesia and Toronto, Canada.

Management believes that all of these facilities are adequate for the operation
of the Company's business as presently conducted.

The Company also has title to a 69% undivided interest in a partially developed
tract of land of approximately 34,000 square meters in Villa Taina, a real
estate project located in Boqueron, Puerto Rico.

ITEM 3. LEGAL PROCEEDINGS

The Company is routinely involved in litigation incidental to its business,
including product liability actions which are generally covered by insurance.
Such routine claims are being vigorously contested and management does not
believe that the outcome of any such litigation will have a material adverse
effect upon the financial condition of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the security holders in the fourth
quarter of the year ended December 30, 1995.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS

On November 28, 1995,the Company's common stock was initially listed on the
NASDAQ National Market under the symbol "MIDD". Prior to that date, the
Company's stock was listed on the American Stock Exchange under the symbol
"MBY". Set forth below for the calendar quarters indicated are the high and low
closing prices.

1995 1994
----------------- -----------------
HIGH LOW HIGH LOW
------ ----- ------ -----
1st Quarter 6-3/4 3-7/8 3-5/8 2-5/8
2nd Quarter 8-3/4 5-1/4 3-3/4 3
3rd Quarter 8-1/8 5-3/8 4-7/8 3
4th Quarter 9-3/4 5-3/8 4-7/8 3-7/8

As of December 30, 1995, the Company estimates there were approximately 1,800
beneficial stockholders.

The Company has not paid a dividend since 1991. Its current financing
agreements preclude payment of dividends for the foreseeable future.

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(In thousands except per share amounts)
<S> <C> <C> <C> <C> <C>
Net sales. . . . . . . $139,188 $129,967 $119,355 $109,219 $102,518
Income from
operations . . . . . 9,431 8,779 1,484 5,302 1,094
Earnings (loss)
before taxes . . . . 3,543 3,913 3,631 (1,865) (7,474)
Net earnings (loss). 3,474 3,050 3,432 (1,894) (7,510)
-------- -------- -------- ------ -------
-------- -------- -------- ------ -------

Per common share:
Primary earnings
(loss) . . . . . $ .40 $ .36 $ .41 $ (.23) $ (.90)
Fully diluted
earnings (loss). .40 .36 .41 (.23) (.90)
Cash dividends . . - - - - .02
-------- -------- -------- ------ --------
-------- -------- -------- ------ --------

At year-end:
Total assets . . . $ 84,040 $ 76,622 $ 73,235 $ 83,292 $ 89,739
Total debt . . . . 43,028 44,472 47,401 59,545 64,369
Shareholders'
equity . . . . . 15,448 8,037 3,170 79 1,958
-------- -------- -------- ------ --------
-------- -------- -------- ------ --------

</TABLE>

Notes: Seco Division results are included for the period until its sale on
August 21, 1992.

Certain amounts in the prior years' financial data have been
reclassified to be consistent with the fiscal 1995 presentation.

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

FISCAL 1995 VS. FISCAL 1994

Net sales increased $9,221,000 or 7.1% to $139,188,000 from fiscal 1994, as an
11% increase in foodservice sales was offset by a decrease in sales of
refrigerated display coolers for the beverage industry. Several new products
contributed to the gain, including Toastmaster's new conveyor toaster for a
large international fast-food chain and Middleby Marshall's extra wide belt
conveyor oven introduced in late 1994. The Company's international sales
increased 16% over 1994 and represented 28% of total sales, evidencing the
tremendous demand for foodservice equipment in global markets, particularly in
the emerging markets of the world where major U.S. restaurant chains are quickly
developing their concepts.

The Company again improved gross margins as a percent of net sales to 28.5% in
1995 as compared to 27.9% in 1994. This increase resulted from increased sales
volumes, improved operating efficiencies and improved margins on products
distributed internationally.

Selling, general and administrative expenses increased $1,884,000 or 6.9% and
remained the same as 1994 as a percent of net sales at 21.1%. The increase is
attributable to expenses associated with a new line of combi-steamers the
Company began distributing in January, 1995, start-up expenses for a new factory
service division which began operation in the fourth quarter of 1995, increased
promotional expenses and higher commissions due to increased sales.

Income from operations, including a $900,000 provision for the discontinuance of
a product line discussed in Note 6 to the Consolidated Financial Statements,
increased $652,000 or 7.4%, to $9,431,000 in 1995 as compared to $8,779,000 in
1994. Excluding the $900,000 provision, income from operations increased
$1,552,000 or 17.7%. The improvement in income from operations is primarily due
to increased sales and margin improvement.

Interest expense and deferred financing costs increased $1,244,000 or 30.5% to
$5,324,000 in 1995 as compared to $4,080,000 in 1994, primarily from higher
interest rates and deferred financing costs associated with the Company's
January 10, 1995 refinancing.

The Company recorded a net tax provision of $69,000. The Company normally
records a tax provision, though it has substantial tax loss carry-forwards.
During 1995 the Company reduced the valuation allowance for these tax loss
carry-forwards by $3,666,000 with a credit to provision for income taxes of
$1,402,000 and a credit directly to paid-in-capital of $2,264,000. The
reduction in the valuation allowance reflects management's increased confidence
in the future utilization of the net operating loss carry-forwards.

<PAGE>

The Company recorded net earnings of $3,474,000 in 1995, as compared to
$3,050,000 in 1994.

FISCAL 1994 VS. FISCAL 1993

Net sales increased $10,612,000 or 8.9% to $129,967,000 from fiscal 1993, as a
14% increase in foodservice equipment sales was offset by a decrease in sales of
refrigerated display coolers for the beverage industry. 1993 sales included the
favorable impact of the initial roll-out of display coolers for the beverage
industry. Other new products introduced in late 1993, such as Southbend's low
profile Marathoner Gold fast therm convection oven and Middleby Marshall's extra
wide belt conveyor oven for high volume pizza and restaurant operations, had a
very favorable impact during 1994. Also, the Company's international sales
increased 16% over 1993 to 26% of total sales.

The Company improved gross margins as a percent of net sales to 27.9% in 1994 as
compared to 24.9% in 1993. This increase resulted from increased sales volume,
the success of new product programs, improved operating efficiencies, lower
warranty costs associated with new products and the favorable impact of a
factory consolidation.

Selling, general and administrative expenses decreased $169,000 or 0.6% and
declined as a percent of net sales to 21.1% in 1994 as compared to 23.2% in
1993. The decrease reflects the effect of recent factory and office
reorganizations, cost improvement programs, and decreased dealer incentive
promotion expense, offset by higher commissions from increased sales and higher
management incentive compensation.

The Company's income from operations increased sharply to $8,779,000 in 1994 as
compared to $1,484,000 in 1993 primarily due to increased sales and improved
margins.

Interest expense decreased $846,000 or 17.2% to $4,080,000 in 1994 as compared
to $4,926,000 in 1993, due primarily to the retirement of the Company's high
interest tranche debt as a result of the September, 1993 settlement of an
outstanding legal dispute. The positive effect of further reduced revolving
credit and term loan balances during 1994 was offset by the effect of gradually
increased interest rates throughout 1994.

The Company recorded a net tax provision of $863,000, though it has substantial
tax loss carry-forwards. A tax asset of $1,350,000 was recognized as of
December 31, 1994 with a credit to provision for income taxes of $339,000 and a
credit directly to paid-in capital of $1,011,000. The reduction in the
valuation allowance reflects management's judgment as to the Company's ability
to generate taxable income during the carry-forward periods.

The Company reported net earnings in fiscal 1994 of $3,050,000, as compared to a
net loss, prior to an unusual income item and restructuring charge, of
($3,684,000), in 1993. Including the unusual income item of $7,716,000 related
to the settlement of a legal dispute and the restructuring charge of $600,000,
the Company reported net earnings of $3,432,000 in fiscal 1993.

<PAGE>

FINANCIAL CONDITION AND LIQUIDITY

Cash flow provided from operations before balance sheet changes, including the
utilization of net operating tax loss carry-forwards, was $6,534,000 in fiscal
1995 compared to $6,075,000 in fiscal 1994. Changes in current assets and
liabilities resulted in cash usage of $1,226,000 in fiscal 1995 and $652,000 in
fiscal 1994. Additions to property, plant and equipment amounted to $3,178,000
and $2,252,000 in fiscal 1995 and 1994, respectively.

The Company's total long-term debt, including current maturities, decreased
during fiscal 1995 by $1,444,000 to $43,028,000 at fiscal year end. Long-term
debt, including current maturities, as a percentage of total capitalization was
73.6% at December 30, 1995 and 84.7% at December 31, 1994.

On January 10, 1995, the Company's subsidiaries consummated a $57,500,000
financing package to replace existing bank debt of $44,000,000 and provide
working capital for future growth. The financing includes a $42,500,000 senior
secured credit facility from a group of lenders led by an affiliate of a major
international bank and a $15,000,000 senior secured note placement with a major
insurance company. The credit facility includes a $15,000,000 five-year term
loan, a $25,000,000 revolving credit line and a $2,500,000 capital expenditure
facility renewable annually. The senior secured notes have an eight-year term
with payments beginning in the sixth year and bear interest at 10.99%. There
was $20,538,000 available to borrow under the revolving credit facility, of
which $15,000,000 was outstanding at December 30, 1995.

Management believes the Company has sufficient financial resources available to
meet its anticipated requirements for funds for operations in the current fiscal
year and can satisfy the obligations under its credit and note agreements.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

PAGE
----

Report of Independent Public Accountants . . . . . . . . . . . . . . . . . 13
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . . . . . . . 14
Consolidated Statements of Earnings. . . . . . . . . . . . . . . . . . . . 15
Consolidated Statements of Changes in Shareholders' Equity . . . . . . . . 16
Consolidated Statements of Cash Flows. . . . . . . . . . . . . . . . . . . 17
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . 19

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of
Directors of The Middleby Corporation:

We have audited the accompanying consolidated balance sheets of THE
MIDDLEBY CORPORATION (a Delaware corporation) and Subsidiaries as of December
30, 1995, and December 31, 1994, and the related consolidated statements of
earnings, changes in shareholders' equity and cash flows for each of the three
years in the period ended December 30, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
The Middleby Corporation and Subsidiaries as of December 30, 1995, and December
31, 1994, and the results of their operations and their cash flows for each of
the three years in the period ended December 30, 1995, in conformity with
generally accepted accounting principles.

Arthur Andersen LLP

Chicago, Illinois,
February 16, 1996

<PAGE>

THE MIDDLEBY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 30, 1995 AND DECEMBER 31, 1994
(In Thousands, Except Per Share Amounts)

1995 1994
-------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents. . . . . . . $ 981 $ 667
Accounts receivable, net . . . . . . . 16,236 18,064
Inventories, net . . . . . . . . . . . 26,584 21,116
Prepaid expenses and other . . . . . . 980 1,394
Current deferred taxes . . . . . . . . 2,086 1,280
-------- --------
Total Current Assets . . . . . . . . 46,867 42,521
Property, Plant and Equipment, net . . . 24,273 23,260
Excess Purchase Price Over Net Assets
Acquired, net. . . . . . . . . . . . . 7,777 8,055
Deferred Taxes . . . . . . . . . . . . . 2,930 70
Other Assets . . . . . . . . . . . . . . 2,193 2,716
-------- --------
Total Assets . . . . . . . . . . . . $ 84,040 $ 76,622
-------- --------
-------- --------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt . $ 1,710 $ 1,822
Accounts payable . . . . . . . . . . . 14,026 11,252
Accrued expenses . . . . . . . . . . . 9,756 11,079
-------- --------
Total Current Liabilities. . . . . . 25,492 24,153
Long-Term Debt . . . . . . . . . . . . . 41,318 42,650
Minority Interest and Other Non-current
Liabilities. . . . . . . . . . . . . . 1,782 1,782
Shareholders' Equity:
Preferred stock, $.01 par value;
none issued. . . . . . . . . . . . . - -
Common stock, $.01 par value;
8,388,000 and 8,341,000 shares
issued and outstanding in 1995
and 1994, respectively . . . . . . . 84 83
Paid-in capital. . . . . . . . . . . . 27,934 24,154
Cumulative translation adjustment. . . (228) (384)
Accumulated deficit. . . . . . . . . . (12,342) (15,816)
Total Shareholders' Equity . . . . . 15,448 8,037
-------- --------
Total Liabilities and Shareholders'
Equity . . . . . . . . . . . . . . $ 84,040 $ 76,622
-------- --------
-------- --------

</TABLE>

The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.

<PAGE>

THE MIDDLEBY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE FISCAL YEARS ENDED DECEMBER 30, 1995, DECEMBER 31, 1994
AND JANUARY 1, 1994
(In Thousands, Except Per Share Amounts)

1995 1994 1993
-------- -------- --------

<S> <C> <C> <C>
Net Sales. . . . . . . . . . $139,188 $129,967 $119,355

Cost of Sales. . . . . . . . 99,498 93,713 89,627
-------- -------- --------

Gross Margin . . . . . . 39,690 36,254 29,728

Selling and Distribution
Expenses . . . . . . . . . 19,473 17,894 18,659
General and Administrative
Expenses . . . . . . . . . 9,886 9,581 8,985
Provision for Product Line
Discontinuance. . . . . . . 900 - -
Restructuring Charge . . . . - - 600
-------- -------- --------

Income from Operations . 9,431 8,779 1,484

Interest Expense and Deferred
Financing Costs. . . . . . 5,324 4,080 4,926
Other Expense, net . . . . . 564 786 643
Unusual Income Item (see
Note 3). . . . . . . . . . - - 7,716
-------- -------- --------

Earnings Before Income
Taxes. . . . . . . . . 3,543 3,913 3,631

Provision for Income Taxes . 69 863 199
-------- -------- --------

Net Earnings . . . . . . $ 3,474 $ 3,050 $ 3,432
-------- -------- --------
-------- -------- --------

Earnings Per Common and
Common Equivalent
Share. . . . . . . . . . . $ .40 $ .36 $ .41
-------- -------- --------
-------- -------- --------

</TABLE>

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

<PAGE>

THE MIDDLEBY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE FISCAL YEARS ENDED DECEMBER 30, 1995, DECEMBER 31, 1994
AND JANUARY 1, 1994

(In Thousands)

Common Paid-in Accumulated
Stock Capital Deficit CTA Total
----- ---------- ----------- --- -----

<S> <C> <C> <C> <C> <C>
BALANCE,
January 2, 1993. . . . . $83 $22,203 $(22,298) $ 91 $ 79
--- ------- -------- ----- ------

Net Earnings . . . . . . - - 3,432 - 3,432
Exercise of Employee
Stock Options. . . . . - 4 - - 4
Change in Cumulative
Translation Adjustment . - - - (345) (345)

BALANCE,
January 1, 1994. . . . . $83 $22,207 $(18,866) $(254) $3,170
--- ------- -------- ----- ------

Net Earnings . . . . . . - - 3,050 - 3,050
Change in Tax Asset
Valuation Allowance. . - 1,924 - - 1,924
Exercise of Employee
Stock Options. . . . . - 23 - - 23
Change in Cumulative
Translation Adjustment . - - - (130) (130)

BALANCE,
December 31, 1994. . . . $83 $24,154 $(15,816) $(384) $8,037
--- ------- -------- ----- ------

Net Earnings . . . . . . - - 3,474 - 3,474
Change in Tax Asset
Valuation Allowance. . - 3,409 - - 3,409
Exercise of Employee
Stock Options. . . . . 1 121 - - 122
Issuance of Deferred
Warrant. . . . . . . . - 250 - - 250
Change in Cumulative
Translation Adjustment . - - - 156 156

BALANCE,
December 30, 1995. . . . $84 $27,934 $(12,342) $(228) $15,448
--- ------- -------- ----- -------
--- ------- -------- ----- -------

</TABLE>

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

<PAGE>

THE MIDDLEBY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEARS ENDED DECEMBER 30, 1995, DECEMBER 31, 1994
AND JANUARY 1, 1994

(In Thousands)

1995 1994 1993
------- ------- -------

<S> <C> <C> <C>
Cash Flows From Operating
Activities -
Net Earnings . . . . . . . . . . $ 3,474 $ 3,050 $ 3,432
Adjustments to reconcile
net earnings to net cash
provided by operating
activities-
Depreciation and
amortization . . . . . . . . 3,365 2,424 $ 3,056
Utilization of N.O.L.'s. . . . (137) 601 -
Unusual income item
from settlement of
legal dispute (see
Note 3). . . . . . . . . . . - - (7,716)
Gain on sale of
assets . . . . . . . . . . . - - (304)

Cash effects of changes in -
Accounts receivable. . . . . 1,828 (3,470) (109)
Inventories. . . . . . . . . (5,468) 1,409 (3,801)
Prepaid expenses and
other assets . . . . . . . 795 (100) (1,095)
Accounts payable . . . . . . 2,774 (1,319) 3,838
Accrued expenses and
other liabilities. . . . . (1,323) 2,828 (1,637)
-------- ------- --------
Net Cash Provided by
(Used in) Operating
Activities . . . . . . . . . . 5,308 5,423 (4,336)
-------- ------- --------

Cash Flows From Investing
Activities -
Additions to property
and equipment. . . . . . . . . $(3,178) $(2,252) $(1,190)
Net cash received from
sale of investment . . . . . . 1,337 - -
Net cash received from
sale of facility . . . . . . . - - 919
Net cash received from
settlement of legal
dispute (see Note 3) . . . . . - - 16,500
-------- ------- --------

Net Cash (Used in)
Provided by Investing
Activities . . . . . . . . . . (1,841) (2,252) 16,229
-------- ------- --------

</TABLE>

<PAGE>

THE MIDDLEBY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEARS ENDED DECEMBER 30, 1995, DECEMBER 31, 1994
AND JANUARY 1, 1994

(In Thousands)
(Continued)

1995 1994 1993
------- ------- -------

<S> <C> <C> <C>
Cash Flows From Financing
Activities -
Proceeds from senior
secured note . . . . . . . . . $15,000 $ - $ -
Proceeds from credit facility. . 31,000 - -
Extinguishment of bank debt. . . (44,055) - -
Reduction in revolving credit
line, net. . . . . . . . . . . (1,000) (3,366) (11,859)
Reduction in term loan. . . . . (2,932) (20) (285)
Cost of financing activities . . (1,726) - -
Other financing activities, net. 560 457 -
------ ------ -------

Net Cash Used in
Financing Activities . . . . . (3,153) (2,929) (12,144)
------ ------ -------

Changes in Cash and Cash
Equivalents -
Net increase (decrease)
in cash and cash
equivalents. . . . . . . . . . $ 314 $ 242 $ (251)
Cash and cash equivalents
at beginning of year . . . . . 667 425 676
------ ------ -------

Cash and Cash Equivalents
at End of Year . . . . . . . . $ 981 $ 667 $ 425
------ ------ -------
------ ------ -------

</TABLE>

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

<PAGE>

THE MIDDLEBY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) NATURE OF OPERATIONS

The Middleby Corporation (the "Company") is engaged in the design,
manufacture and sale of commercial and institutional foodservice equipment.
Its major line of products consists of conveyor ovens, toasters, counter-
top cooking and warming equipment, heavy duty gas ovens, convection ovens,
broilers, commercial refrigerators and freezers. The Company manufactures
and assembles most of this equipment at three factories in the United
States and one operation in the Philippines. The Company conducts its
business principally through three domestic and two international business
units. Each unit operates independently.

The Company's products are sold primarily to independent dealers and
distributors and are marketed primarily through the Company's sales
personnel and network of independent manufacturers' representatives. End
user customers include fast food restaurant chains, general restaurants,
cafeterias, hotels, resorts, convenience stores and certain healthcare and
educational institutions. Included in these customers are several large
multi-national restaurant chains which account for a significant portion of
the Company's business, although no single customer accounts for more than
10% of net sales.

The Company purchases raw materials and component parts, the majority of
which are standard commodity type materials, from a number of suppliers.
Although certain component parts are procured from a sole source, the
Company can purchase such parts from alternate vendors.

The Company has numerous licenses and patents to manufacture, use and sell
its products and equipment. Certain of these licenses begin to expire in
the year 2000. Management believes the loss of any one of these licenses
or patents would not have a material adverse effect on the financial and
operating results of the Company.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation

The consolidated financial statements include the accounts of the Company
and its wholly-owned and majority-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in
consolidation.

The Company's fiscal year ends on the Saturday nearest December 31. Fiscal
years 1995, 1994 and 1993 ended on December 30, 1995, December 31, 1994 and
January 1, 1994, respectively, and each included 52 weeks.

<PAGE>

(b) Accounts Receivable

Accounts receivable, as shown in the consolidated balance sheets, is net of
allowances for doubtful accounts of $486,000 and $413,000 at December 30,
1995 and December 31, 1994, respectively. The provision for doubtful
accounts was $202,000, $243,000 and $327,000 for 1995, 1994 and 1993,
respectively.

Inventories are stated at the lower of cost or market. Cost is determined
utilizing the first-in-first-out (FIFO) inventory method. Inventories, as
of December 30, 1995 and December 31, 1994, are as follows:

(In Thousands)
1995 1994
---- ----
<S> <C> <C>

Raw materials and parts.... $10,356 $ 8,404
Work in process............ 6,688 5,866
Finished goods............. 9,540 6,846
------- -------
$26,584 $21,116
------- -------
------- -------

</TABLE>

The amounts shown above are net of valuation allowances of $1,109,000 and
$613,000 as of December 30, 1995 and December 31, 1994, respectively.
Provisions for inventory valuations were $803,000, $509,000 and $422,000
for 1995, 1994 and 1993, respectively.

(d) Property, Plant and Equipment

Property, plant and equipment are carried at cost as follows:

(In Thousands)
1995 1994
---- ----
<S> <C> <C>

Land and improvements........ $ 5,253 $ 5,253
Building and improvements.... 13,365 11,845
Machinery and equipment...... 20,130 18,472
------- -------
$38,748 $35,570
Less accumulated
depreciation............... (14,475) (12,310)
------- -------

Property, Plant and
Equipment, net........... $24,273 $23,260
------- -------
------- -------

</TABLE>

Depreciation is provided for financial statement purposes using the
straight-line method and amounted to $2,165,000, $2,146,000 and $2,190,000
in fiscal 1995, 1994 and 1993, respectively. Following is a summary of the
estimated useful lives:

Description Life
----------- ----

Land improvements............... 7 years
Building and improvements....... 20 to 40 years
Machinery and equipment......... 3 to 10 years

<PAGE>

Expenditures which significantly extend useful lives are capitalized.
Maintenance and repairs are charged to expense as incurred.

(e) Excess Purchase Price Over Net Assets Acquired

The excess purchase price over net assets acquired is being amortized using
a straight-line method over 40 years. Amounts presented are net of
accumulated amortization of $3,341,000 in fiscal 1995 and $3,063,000 in
fiscal 1994. The Company periodically evaluates the useful life and
realizability of the excess purchase price over net assets acquired based
on current events and circumstances. Impairments are measured utilizing an
undiscounted forecasted income method pertaining to business segments and
are recorded at the time management deems an impairment has occurred.

(f) Intangible Assets

Trademarks, patents, license agreements and other intangibles, included in
other assets in the consolidated balance sheets, are being amortized on a
straight-line basis over estimated useful lives ranging from 5 to 14 years.
Net recorded intangible assets of $296,000 and $591,000 are presented net
of accumulated amortization of $1,955,000 and $1,660,000 in fiscal 1995 and
1994, respectively.

(g) Accrued Expenses

Accrued expenses consist of the following:

(In Thousands)
1995 1994
------- -------
<S> <C> <C>

Accrued payroll and related
expenses...................... $ 3,838 $ 4,800
Accrued commissions............. 1,567 2,191
Accrued warranty................ 1,382 1,365
Other accrued expenses.......... 2,969 2,723
------- -------

$ 9,756 $11,079
------- -------
------- -------

</TABLE>

(h) Research and Development Costs

Research and development costs, included in cost of sales in the
consolidated statements of earnings, are charged to expense when incurred.
These costs were $1,798,000, $1,637,000 and $1,818,000 in fiscal 1995, 1994
and 1993, respectively.

(i) Earnings Per Share

Primary earnings per share is based upon the weighted average number of
outstanding shares of common stock and common stock equivalents. The
weighted average number of shares outstanding was 8,685,000, 8,434,000 and
8,369,000 shares for the fiscal years 1995, 1994 and 1993, respectively.
Fully diluted earnings per common and common equivalent shares are not
presented, since

<PAGE>

dilution is less than 3%.

(j) Consolidated Statements of Cash Flows

For purposes of the consolidated statements of cash flows, the Company
considers all highly liquid instruments with a maturity of three months or
less to be cash equivalents. Cash paid for interest was $4,076,000,
$4,060,000 and $7,447,000 in fiscal 1995, 1994 and 1993, respectively.
Cash payments totaling $371,000, $192,000 and $174,000 were made for income
taxes during fiscal 1995, 1994 and 1993, respectively.

(k) Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.

(l) Fair Value of Financial Instruments

The carrying value of all assets and liabilities approximates the fair
value of those financial instruments.

(m) Future Adoption of Accounting Standards

In fiscal 1996, the Company is required to adopt "SFAS 121: Accounting for
the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed
Of" and "SFAS 123: Accounting for Stock-Based Compensation." The adoption
of these accounting standards is not expected to have a material impact on
the financial statements.

(n) Reclassifications

Certain amounts in the fiscal 1994 and 1993 consolidated financial
statements have been reclassified to be consistent with fiscal 1995
presentation.

(3) ACQUISITION AND DISPOSITION

On June 9, 1995, the Company sold its remaining 11.2% interest in the Seco
Products Corporation ("Seco"), a former operating division, for $1,447,000
net of expenses. $110,000 of the proceeds is being held in escrow for one
year. Proceeds from the sale were applied to the senior secured credit
facility. No gain or loss was recorded on the sale.

On September 10, 1993, the Company settled a suit against Hussmann
Corporation, a subsidiary of Whitman Corporation, whereby the Company
agreed to release its claim against Hussmann relating to the July, 1989
purchase of Hussmann's Foodservice Equipment Group in exchange for immediate
cash payment of $19,500,000, dismissal of the $2,400,000 net due

<PAGE>

Hussmann from the Company as a closing adjustment to the purchase price,
and certain other considerations. The proceeds represent an adjustment to
the final purchase price and compensation for losses in the form of
interest and other costs incurred subsequent to the acquisition date. The
adjustment to the final purchase price was allocated to the acquired assets
and liabilities as appropriate, and the compensation for losses in the form
of interest and other costs incurred subsequent to the acquisition date has
been included as an unusual income item in the consolidated statements of
earnings. The cash proceeds were used to pay $3,000,000 of litigation
expenses, repay $12,000,000 of the high interest tranche loan principal and
$3,000,000 of accrued interest on the high interest tranche loan and reduce
$1,500,000 of the revolving credit facility balance.

In September, 1993, the Company entered into an agreement with Rational
GmbH ("Rational"), a German corporation, to establish a joint venture
distribution company, Rational Cooking Systems, Inc. ("RCSI"). RCSI's
charter was to distribute certain products known as Rational Combi Steamers
("Products") in the United States, Canada and the Caribbean. Effective
January 1, 1995, the Company began distributing products directly through
its established distribution channels. The Company owns a 30% equity
interest in RCSI, with the remaining 70% owned by Rational. However, the
future purpose and continuation of RCSI is uncertain. The Company has total
capital investment commitments of $600,000, of which $457,000 was funded as
of December 30, 1995. In accordance with the equity method of accounting,
the Company has recognized its equity share of the losses in the joint
venture up to the total capital commitment of $600,000.

(4) FINANCING ARRANGEMENTS

The following is a summary of long-term debt as of December 30, 1995 and
December 31, 1994.

(In Thousands)
1995 1994
------- -------
<S> <C> <C>

Senior secured credit facility:
Revolving credit line............ $15,000 $ -
Term loan........................ 11,959 -
Senior secured note................ 15,000 -
Other.............................. 1,069 547
Bank debt.......................... - 43,925
------- -------
$43,028 $44,472
Less current maturities of
long-term debt.................. 1,710 1,822
------- -------

Total long-term debt.. $41,318 $42,650
------- -------
------- -------

</TABLE>

On January 10, 1995, the Company's subsidiaries consummated a $57,500,000
financing package to replace the existing bank debt and provide working
capital for future growth. The financing included a $42,500,000 senior
secured credit facility from a

<PAGE>

group of lenders led by an affiliate of a major international bank and a
$15,000,000 senior secured note placement with a major insurance company.

The senior secured credit facility included a $15,000,000 five-year term
loan, a $2,500,000 capital expenditure facility available in the first
year, and a $25,000,000 revolving credit line expiring in January, 2000.
Borrowings under the revolving credit line are limited to specified
percentages of defined accounts receivable and inventories. The credit
agreement initially permitted borrowings for the term loan and revolving
credit line at floating rates of 2.5% above LIBOR rate or 1% above base
rate. The interest rate can be adjusted quarterly based on the Company's
achievement of defined coverage ratios on a rolling four quarter basis. As
of December 30, 1995, borrowings under LIBOR contracts were reduced to
2.25% above the LIBOR rate and borrowings under prime rate contracts were
reduced to .75% above the base rate. A facility fee of .0625% is payable
annually and a commitment fee of .375% is charged on the unused portion of
the revolving credit facility and capital expenditure facility. The term
loan is repayable in quarterly installments of $450,000 in 1995, $525,000
in 1996, $600,000 in 1997, $675,000 in 1998 and $750,000 in 1999, and a
lump sum of $3,000,000 or the remaining balance on December 31, 1999.
Mandatory prepayments are required in the case of any excess cash flow, as
defined, or in the event of any sale or disposition of assets. The credit
facility is secured by a senior security interest of substantially all
property, plant and equipment and all accounts receivable and inventory of
the Company's domestic subsidiaries.

Under the revolving credit facility, the maximum and average daily amounts
borrowed during fiscal 1995 were $18,597,000 and $16,916,000, during fiscal
1994 were $39,800,000 and $39,004,000, and during fiscal 1993 were
$39,475,000 and $38,199,000, respectively.

The senior secured note bears interest at 10.99% and have an eight-year
term maturing January, 2003 with semi-annual payments of $2,500,000
beginning in July, 2000. A warrant for the purchase of 250,000 shares of
common stock of the Company at an exercise price of $3 per share was issued
in conjunction with the note. Under certain conditions, the terms of the
warrant provide for the purchase of 200,000 shares at $.01 per share. The
note agreement is secured by a senior security interest in substantially
all the intellectual property collateral of the Company's subsidiaries.

The terms of the credit and note agreements prohibit the paying of
dividends, limit capital expenditures and leases, and require, among other
terms, a minimum amount, as defined, of shareholders' equity, and minimum
ratios of current assets to current liabilities, cash flow coverage
indebtedness and fixed charges coverage. The credit and note agreements
also provide that if a material adverse change in the Company's business
operations or conditions occurs, the lender and noteholder could declare an
event of default.

<PAGE>

A foreign subsidiary of the Company borrowed $457,000 in the fourth quarter
of 1994 and an additional $262,000 during fiscal 1995 under a mortgage term
loan facility with a foreign bank for the construction of a manufacturing
facility. The loan commitment is $1,000,000 and is secured by the property
and plant. The loan is repayable in sixteen equal quarterly payments
beginning on the second year anniversary. The interest rate is the bank's
base rate. The Company's foreign subsidiaries also have advance credit
lines available up to $1,000,000 for letters of credit and advances on
receivables. There was $481,000 and $0 outstanding against these lines
at December 30, 1995 and December 31, 1994, respectively.

The weighted average interest rates under credit agreements during fiscal
1995, 1994 and 1993 were 9.5%, 8.7% and 8.1%, respectively.

The aggregate amount of long-term debt (excluding the revolving credit
facility) payable during each of the next five years is as follows:

(In Thousands)
1996............. $ 1,710
1997............. $ 2,526
1998............. $ 2,826
1999............. $ 5,620
2000............. $ 5,065
Thereafter....... $10,000

(5) COMMON AND PREFERRED STOCK

(a) Shares Authorized

At December 30, 1995 and December 31, 1994, the Company had 20,000,000
shares of common stock and 2,000,000 shares of Non-voting Preferred Stock
authorized.

(b) Warrant

In conjunction with the issuance of the senior secured notes in January,
1995 (see Note 4), the Company issued a transferrable warrant to the
noteholders for the purchase of 250,000 shares of common stock at an
exercise price of $3 per share. Under certain conditions, the terms of
the warrant, provide for the purchase of 200,000 shares at $.01 per share.
The warrant provides for adjustment of the exercise price if the Company
issues additional shares at a purchase price below the then current market
price, as defined, and for adjustment of the number of shares if the Company
declares a stock dividend. The warrant became exercisable on February 10,
1995 and expires July 10, 2003.

The Company maintains a 1989 Stock Incentive Plan, effective as of February
16, 1989, which provides key employees of the Company rights to purchase
shares of common stock at the fair

<PAGE>

market value on the date of grant. The maximum amount that can be issued
under the plan is 200,000 shares. Options may be exercised upon certain
vesting requirements being met but expire, to the extent unexercised,
within a maximum of ten years from the date of grant. No shares remain
available for issue at December 30, 1995. The weighted average exercise
price was $3.10 at December 30, 1995 and $2.28 at December 31, 1994.

The following summarizes activity under the plan during fiscal 1995 and
1994:

1995 1994
---------------- ----------------
Price Price
Shares Range Shares Range
------ ------ ------ ------
<S> <C> <C> <C> <C>
Options outstanding
at beginning of
year............ 140,000 $1.250 - 116,000 $1.250 -
4.375 4.375

During the year-
Granted......... 39,000 $5.625 51,000 $3.000

Exercised....... (22,000) $1.250 - (18,000) $1.250 -
4.375 1.375
Forfeited....... (2,000) $3.000 (9,000) $1.250 -
------- -------
4.375

Options outstanding
at end of year.. 155,000 $1.250 - 140,000 $1.250 -
------- 5.625 ------- 4.375
------- -------

</TABLE>

In addition to the above plan, the directors of the Company have options
for 9,000 shares exercisable at $1.875 per share.

(6) PROVISION FOR PRODUCT LINE DISCONTINUANCE AND RESTRUCTURING
CHARGE

Company management made the decision to discontinue the production of a
unique line of mixers during the fourth quarter of 1995. A provision of
$900,000 was recorded for this product line discontinuance. The charge
related to the disposal and rationalization of assets associated with the
product line and its operations. No changes in operating personnel were
made as a result of this decision.

During fiscal 1993, the Company incurred restructuring charges related to
the closing of its corporate offices and consolidation of these operations
and management into the Middleby Cooking Systems Group operations. These
charges totaled $600,000.

(7) INCOME TAXES

The Company files a consolidated Federal income tax return. In January,
1993, the Company adopted Statement of Financial

<PAGE>

Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes."
Adoption of SFAS No. 109 was recorded utilizing the cumulative catch-up
method.

The provision for income taxes is summarized as follows:

(In Thousands)
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Federal $(176) $709 $158
State and Local 183 144 13
Foreign 62 10 28
----- ---- ----
Total $ 69 $863 $199
----- ---- ----
----- ---- ----

</TABLE>

Although the Company is not a Federal taxpayer due to its NOL carry-
forwards, a tax provision is still required to be recorded. The majority
of the NOL carry-forwards relate to a 1983 quasi-reorganization and are not
recorded as a credit to the tax provision, but are directly credited to
paid-in-capital.

Reconciliation of the differences between income taxes
computed at the Federal statutory rate and effective rate are as follows:

(In Thousands)
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
U.S. Federal statutory tax
rate......................... 34.0% 34.0% 34.0%
Reductions in valuation
allowance.................... (45.1) (13.2) (24.4)
Permanent book vs. tax
differences.................. 5.1 2.7 (3.8)
Foreign tax losses and rate
differentials................ 2.7 (5.1) (0.7)
State taxes, net of federal
benefit...................... 5.2 3.7 0.4
----- ----- -----

Consolidated effective
tax rate..................... 1.9% 22.1% 5.5%
----- ----- -----
----- ----- -----

</TABLE>

As of December 30, 1995 and December 31, 1994, the Company had recorded the
following deferred tax assets and liabilities which were comprised of the
following:

(In thousands)
1995 1994
---- ----
<S> <C> <C>
Deferred Tax Assets:
Net operating loss carry-forwards... $13,736 $15,521
Tax credit carry-forwards........... 1,426 1,339
Accrued pension benefits............ 606 529
Accrued warranty.................... 469 461
Other............................... 960 783
Valuation allowance................. (10,515) (15,561)
------ -------
Deferred Tax Assets ........... 6,682 3,072

Deferred Tax Liabilities:
Depreciation........................ (1,666) (1,722)
------ -------
Net Deferred Tax Assets................. $5,016 $ 1,350
------ -------
------ -------
</TABLE>

<PAGE>

As of December 30, 1995, the consolidated tax loss carry-forwards for
Federal income tax purposes were approximately $13,736,000 on a tax
effected basis. These carry-forwards expire as follows: $977,000 in 1996;
$7,535,000 in 1997; $3,000 in 1998; $264,000 in 2001; $508,000 in 2004;
$1,619,000 in 2005; $1,913,000 in 2006; and $917,000 in 2007. Consolidated
business tax credit carry-forwards available at December 30, 1995, to
reduce future tax liabilities were approximately $938,000 and expire from
1995 through 2000. The Company also has tax credits of approximately
$488,000 resulting from Federal AMT payments which do not expire.

The utilization of the net operating loss and credit carry-forwards depend
on future taxable income during the applicable carry-forward periods.
Management evaluates and adjusts the valuation allowance, based on the
Company's expected taxable income as part of the annual budgeting process.
These adjustments reflect management's judgement as to the Company's
ability to generate taxable income which will, more likely than not, be
sufficient to recognize these tax assets.

(8) COMMITMENTS AND CONTINGENCIES

The Company leases office and plant facilities and equipment under
operating leases which expire in fiscal 1996 through 2002. Rental expense
was $881,000, $955,000 and $867,000 in fiscal 1995, 1994, and 1993,
respectively. Future minimum rental payments under these leases are as
follows:

(In Thousands)
1996.................... $622
1997.................... 419
1998.................... 286
1999.................... 231
2000.................... 205
Thereafter.............. 348
------
$2,111
------
------

(9) SEGMENT INFORMATION

The Company is engaged in the manufacture and sale of commercial and
institutional food cooking, preparation and refrigeration equipment for the
foodservice industry and refrigeration equipment for the beverage industry.
The Company's principal operations are in the United States, with a
majority of sales made to domestic dealers and distributors. No customer
accounted for 10% or more of sales during fiscal 1995, 1994 and 1993.

Sales outside the United States, based on dealer locations, are given
below. These export sales represented 28%, 26% and 24% of the Company's
net sales in fiscal 1995, 1994 and 1993,

<PAGE>

respectively. Additionally, a small amount of sales to U.S.
customers are transshipped by those customers for installation at their
international locations.

The following represents net sales as reported by each major
geographic region:

(In Thousands)

1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
United States $100,718 $ 96,780 $ 90,840

Asia/Pacific 20,161 13,641 10,001
Europe/Other 10,430 8,986 10,501
Latin America 4,036 6,790 4,687
Canada 3,843 3,770 3,326
-------- -------- --------
Total International 38,470 33,187 28,515

Total Net Sales $139,188 $129,967 $119,355
-------- -------- --------
-------- -------- --------

</TABLE>

(10) EMPLOYEE BENEFIT PLANS

The Company has a discretionary profit sharing plan and a 401(k) savings
plan for salaried and non-union hourly employees. The Company had profit
sharing expense of $325,000, $300,000 and $25,000 in fiscal 1995, 1994 and
1993, respectively. The Company provided discretionary matching
contributions as it pertained to the 40l(k) savings plan in 1993. Expense
for discretionary matching contributions was $71,000 for fiscal 1993. No
matching contribution was made in 1995 and 1994.

The Company has a defined benefit pension plan for union hourly plant
employees at the Elgin, Illinois facility. The Company's funding policy is
to contribute the minimum required by the Employee Retirement Income
Security Act of 1974. The plan had projected benefit obligations of
$1,653,000 and $1,385,000 at December 30, 1995 and December 31, 1994,
respectively. The market values of plan assets were $1,371,000 and
$1,153,000 at December 30, 1995 and December 31, 1994, respectively. The
discount rates used to determine the projected benefit obligations were
7.5% and 8.5% for 1995 and 1994, respectively. The net pension expense for
this plan was $140,000, $185,000 and $200,000 for fiscal 1995, 1994 and
1993, respectively.

In fiscal 1993, the Company adopted a non-qualified defined benefit pension
plan for certain officers of the Company and entered into a retirement
benefit agreement with its President. The Company also has a retirement
benefit agreement with its Chairman. The retirement benefit is based on a
percentage of the officer's final base salary and the number of years of
employment. The projected benefit obligations under these agreements were
$1,530,000 and $1,260,000 at December 30, 1995 and December 31, 1994,
respectively, and is currently unfunded. The discount rates used to
determine the projected benefit obligations were 7.5% and 8.5% for 1995 and
1994, respectively. Retirement benefit expense was $255,000, $259,000 and
$230,000 in fiscal 1995, 1994 and 1993, respectively.

<PAGE>

In addition, the Company participates in a multi-employer pension plan
which provides defined benefits to all union hourly workers at the Cherry
Hill, New Jersey facility who are represented by collective bargaining.
The Company does not have any liability related to this plan. Amounts
charged to expense and contributed to the plan totaled $75,000, $70,000 and
$61,000 in fiscal 1995, 1994 and 1993, respectively.

(11) QUARTERLY DATA (UNAUDITED)

(In thousands, except per share data)
1st 2nd 3rd 4th
------- ------- ------- -------
1995
----
<S> <C> <C> <C> <C>
Net sales . . . . . . . . $34,994 $34,559 $35,237 $34,398
Gross margin. . . . . . . 9,718 9,467 10,137 10,368
Operating income. . . . . 2,514 2,176 2,757 1,984
Net earnings. . . . . . . 743 694 960 1,077
Earnings per common and
common equivalent
share . . . . . . . . . .09 .08 .11 .12
------- ------- ------- ------
------- ------- ------- ------

1994
----
Net sales . . . . . . . . $31,020 $34,634 $32,349 $31,964
Gross margin. . . . . . . 7,997 9,413 9,021 9,823
Operating income. . . . . 1,280 2,321 2,569 2,609
Net earnings. . . . . . . 133 806 909 1,202
Earnings per common and
common equivalent
share . . . . . . . . . .01 .10 .11 .14
------- ------- ------- -------
------- ------- ------- -------

</TABLE>

<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

The Company has no items to report under Item 9 of this report.

PART III

The information required by Part III (Items 10, 11, 12 and 13) is incorporated
by reference, to the extent necessary, in accordance with General Instruction
G(3), from the Company's definitive proxy statement filed pursuant to Regulation
14A in connection with the 1996 annual meeting of stockholders.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K

(a) 1. Financial statements.

The financial statements listed on Page 12 are filed as part of this
Form 10-K.

3. Exhibits.
(3)(i) Certificate of Incorporation of The Middleby
Corporation, dated March 12, 1985, Certificate of
Amendment of Certificate of Incorporation of The
Middleby Corporation, dated March 27, 1985, Certificate
of Amendment of Certificate of Incorporation of The
Middleby Corporation, dated June 18, 1987, and
Certificate of Amendment of Certificate of
Incorporation of The Middleby Corporation, dated May
20, 1988 and Certificate of Amendment of Certificate of
Incorporation of The Middleby Corporation, dated May
18, 1989, Certificate of Amendment of Certificate of
Incorporation of The Middleby Corporation dated May 6,
1992, incorporated by reference to the Company's Form
10-K, Exhibit 3(b) for the fiscal year ended January 2,
1993, filed on April 7, 1993;

(3)(ii) Amended and restated bylaws of The Middleby
Corporation, incorporated by reference from the
Company's Form 10-Q for the fiscal quarter ended June
27, 1992, filed on August 12, 1992;

(4)(a) Certificate of Designations dated October 30, 1987, and
specimen stock certificate relating to the Company's
Preferred Stock, incorporated by reference from the
Company's

<PAGE>

Form 10-K, Exhibit 4, for the fiscal year ended
December 31, 1988, filed on March 15, 1989;

(4)(b) Loan and Security Agreement dated January 9, 1995, by
and among Middleby Marshall Inc. and Asbury Associates,
Inc., as Borrowers, certain lenders named therein, as
Lenders, and Sanwa Business Credit Corporation, as
Agent and Lender, incorporated by reference to the
Company's Form 10-K, Exhibit (4)(b), for the fiscal
year ended December 31, 1994, filed on March 31, 1995;

(4)(c) Note Agreement dated as of January 1, 1995, among
Middleby Marshall Inc. and Asbury Associates, Inc. as
Obligers, incorporated by reference to the Company's
Form 10-K, Exhibit (4)(c), for the fiscal year ended
December 31, 1994, filed on March 31, 1995;

(4)(d) Warrant to purchase common stock of The Middleby
Corporation dated January 10, 1995, incorporated by
reference to the Company's Form 10-K, Exhibit (4)(d),
for the fiscal year ended December 31, 1994, filed on
March 31, 1995;

(4)(e) Intercreditor Agreement dated as of January 10, 1995,
by and among Sanwa Business Credit Corporation, as
Agent, The Northwestern Mutual Life Insurance Company,
as the Senior Noteholder, and First Security Bank of
Utah, National Association, as Security Trustee and
Collateral Agent, incorporated by reference to the
Company's Form 10-K, Exhibit (4)(e), for the fiscal
year ended December 31, 1994, filed on March 31, 1995;

(10)(iii)(a)* Amended and Restated Employment Agreement of William F.
Whitman, Jr., dated January 1, 1995, incorporated by
reference to the Company's Form 10-Q, Exhibit
(10)(iii)(a), for the quarterly period ended April 1,
1995;

(10)(iii)(b)* Amended and Restated Employment Agreement of David P.
Riley, dated January 1, 1995, incorporated by
reference to the Company's 10-Q, Exhibit (10)(iii)(b),
for the quarterly period ended April 1,
1995;

(10)(iii)(c)* Amended and Restated Employment Agreement of
independent directors adopted as of January 1,1995,
incorporated by reference to the Company's Form 10-Q,
Exhibit (10)(iii)(c), for the quarterly period ended
April 1,

<PAGE>

1995;

(10)(iii)(d)* The Middleby Corporation Amended and Restated 1989
Stock Incentive Plan, incorporated by reference to the
Company's Form 10-K, Exhibit 10(iii)(e), for the fiscal
year ended December 31, 1988, filed on March 15, 1989;

(10)(iii)(e)* 1993 Performance Bonus Plan (Corporate Vice Presidents)
incorporated by reference to the Company's Form 10-K,
Exhibit 10(iii)(g) for the fiscal year ended January 1,
1994, filed on March 31, 1994;

(10)(iii)(f)* Management Incentive Plan (Corporate Vice Presidents),
incorporated by reference to Company's Form 10-Q,
Exhibit 10 (iii)(d) for the quarterly period ended
April 1, 1995, filed on May 7, 1995;

(10)(iii)(g)* Description of Supplemental Retirement Program,
incorporated by reference to Amendment No. 1 to the
Company's Form 10-Q, Exhibit 10(c), for the quarterly
period ended July 3, 1993, filed August 25, 1993;

(10)(iii)(h)* The Middleby Corporation Stock Ownership Plan,
incorporated by reference to the Company's Form 10-K,
Exhibit (10)(iii)(m), for the fiscal year ended January
1, 1994, filed on March 31, 1994;

(10)(iii)(i)* Amendment to The Middleby Corporation Stock Ownership
Plan dated as of January 1, 1994; incorporated by
reference to the Company's Form 10-K, Exhibit
(10)(iii)(n), for the fiscal year ended December 31,
1994 filed on March 31, 1995.

(22) List of subsidiaries, incorporated by reference to the
Company's Form 10-K, Exhibit (22), for the fiscal year
ended December 31, 1994, filed on March 31, 1995;

(27) Financial Data Schedules (EDGAR only);

(99) Unaudited Pro Forma Financial Information, incorporated
by reference to the Company's Form 8-K, Exhibit (99),
filed on September 7, 1995;

(b) There were no reports on Form 8-K in the fiscal fourth quarter of 1995.

* Designates management contract or compensation plan.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized on the
28th of March, 1996.

THE MIDDLEBY CORPORATION

BY: /s/ David P. Riley
-----------------------
David P. Riley
President, Chief Executive
Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on March 28, 1996.

SIGNATURES TITLE
---------- -----
PRINCIPAL EXECUTIVE OFFICER

/s/ David P. Riley President, Chief Executive Officer,
- ---------------------------- and Director
David P. Riley

PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER

/s/ John J. Hastings Executive Vice President, Chief
- ---------------------------- Financial Officer, Secretary and
John J. Hastings Treasurer

DIRECTORS

/s/ William F. Whitman, Jr. Chairman of the Board and Director
- ----------------------------
William F. Whitman, Jr.

/s/ Newell Garfield, Jr. Director
- ----------------------------
Newell Garfield, Jr.

/s/ A. Don Lummus Director
- ----------------------------
A. Don Lummus

/s/ John R. Miller, III Director
- ----------------------------
John R. Miller, III

/s/ Philip G. Putnam Director
- ----------------------------
Philip G. Putnam

/s/ Sabin C. Streeter Director
- ----------------------------
Sabin C. Streeter

<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> DEC-30-1995
<CASH> 981
<SECURITIES> 0
<RECEIVABLES> 16,236
<ALLOWANCES> 0
<INVENTORY> 26,584
<CURRENT-ASSETS> 46,867
<PP&E> 38,748
<DEPRECIATION> 14,475
<TOTAL-ASSETS> 84,040
<CURRENT-LIABILITIES> 25,492
<BONDS> 41,318
0
0
<COMMON> 84
<OTHER-SE> 15,364
<TOTAL-LIABILITY-AND-EQUITY> 84,040
<SALES> 139,188
<TOTAL-REVENUES> 139,188
<CGS> 99,498
<TOTAL-COSTS> 99,498
<OTHER-EXPENSES> 30,259
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,324
<INCOME-PRETAX> 3,543
<INCOME-TAX> 69
<INCOME-CONTINUING> 3,474
<DISCONTINUED> 0
<EXTRAORDINARY> 3,474
<CHANGES> 0
<NET-INCOME> 3,474
<EPS-PRIMARY> .40
<EPS-DILUTED> .40

</TABLE>