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<H1 ALIGN=CENTER><FONT SIZE=3>FORM 10-Q</FONT></H1>
<H1 ALIGN=CENTER><FONT SIZE=3>SECURITIES AND EXCHANGE COMMISSION</FONT></H1>
<H1 ALIGN=CENTER><FONT SIZE=3>Washington, D.C. 20549</FONT></H1>
<P>(Mark One)</P>
<BR>
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<TD WIDTH=3% ALIGN=left>_X_</TD>
<TD WIDTH=2%> </TD>
<TD WIDTH=95% ALIGN=left>Quarterly Report Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 </TD>
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<P ALIGN=CENTER><B>For the period ended July 3, 1999</B> </P>
<P ALIGN=CENTER>or </P>
<BR>
</TD>
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<TD WIDTH=3% ALIGN=left>___</TD>
<TD WIDTH=2%> </TD>
<TD WIDTH=95% ALIGN=left>Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 </TD>
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<P ALIGN=CENTER>Commission File No. 1-9973 </P>
<P ALIGN=CENTER>THE MIDDLEBY CORPORATION<BR>
(Exact Name of Registrant as Specified in its Charter) </P>
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<TD WIDTH=40% ALIGN=CENTER><B>Delaware</B><BR>(State or Other Jurisdiction of<BR>Incorporation or Organization)</TD>
<TD WIDTH=20%> </TD>
<TD WIDTH=40% ALIGN=CENTER><B>36-3352497</B><BR>(I.R.S. Employer Identification No.)</TD>
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<BR>
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<TD WIDTH=80% ALIGN=LEFT><B>2850 W. Golf Road, Suite 405, Rolling Meadows, Illinois</B><BR>(Address of Principal Executive Offices)</TD>
<TD WIDTH=20% ALIGN=CENTER><B>60008</B><BR>(Zip Code)</TD>
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<BR>
<P>Registrant’s Telephone No., including Area Code <B>(847) 758-3880</B> </P>
<P>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 twelve (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___ </P>
<P>As of July 30, 1999, there were 10,157,721 shares of the
registrant’s common stock outstanding. </P>
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<H1 ALIGN=CENTER><FONT SIZE=3>THE MIDDLEBY CORPORATION AND SUBSIDIARIES</FONT></H1>
<H1 ALIGN=CENTER><FONT SIZE=3>QUARTER ENDED JULY 3, 1999</FONT></H1>
<P ALIGN=CENTER><FONT SIZE=3>INDEX</FONT> </P>
</TD>
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<TH COLSPAN="2" ALIGN=LEFT><FONT SIZE="-1">DESCRIPTION</FONT><HR ALIGN=LEFT WIDTH=15% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-1">PAGE</FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="92%" ALIGN="LEFT"><FONT SIZE="-1">PART I. FINANCIAL INFORMATION</FONT></TD>
<TD WIDTH="4%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="2%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="2%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD> </TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">
Item 1. Consolidated Financial Statements</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD> </TD></TR>
<TR VALIGN="TOP">
<TD ALIGN="LEFT"><FONT SIZE="-1">
BALANCE SHEETS<BR>
July 3, 1999 and January 2, 1999</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD> </TD></TR>
<TR VALIGN="TOP">
<TD ALIGN="LEFT"><FONT SIZE="-1">
STATEMENTS OF EARNINGS<BR>
July 3, 1999 and July 4, 1998</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD> </TD></TR>
<TR VALIGN="TOP">
<TD ALIGN="LEFT"><FONT SIZE="-1">
STATEMENTS OF CASH FLOWS<BR>
July 3, 1999 and July 4, 1998</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD> </TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">
NOTES TO FINANCIAL STATEMENTS</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD> </TD></TR>
<TR VALIGN="TOP">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Item 2. Management’s Discussion and Analysis<BR>
of Financial Condition and Results of<BR>
Operations
</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">7</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD> </TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Item 3. Quantitative and Qualitative Disclosures<BR>
About Market Risk</FONT></TD><TD
ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">14</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD> </TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">PART II. OTHER INFORMATION</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">14</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
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<P>PART I. FINANCIAL INFORMATION</P>
<H1 ALIGN=CENTER><FONT SIZE=3><B>THE MIDDLEBY CORPORATION AND SUBSIDIARIES<BR>
CONSOLIDATED BALANCE SHEETS<BR>(In Thousands, Except Per Share Amounts)</B></FONT></H1>
</TD>
</TR>
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<TH COLSPAN="2"></TH>
<TH COLSPAN="2"><FONT SIZE="-2">(Unaudited)<BR>July 3, 1999</FONT><HR WIDTH=55% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">January 2, 1999</FONT><HR WIDTH=80% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="64%" ALIGN="LEFT"><FONT SIZE="-1">ASSETS</FONT></TD>
<TD WIDTH="4%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="6%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="2%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Cash and cash equivalents</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 4,411</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 6,768</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Accounts receivable, net</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">27,156</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">24,330</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Inventories, net</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">18,153</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">20,456</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Prepaid expenses and other</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">782</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">941</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Current deferred taxes</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,895</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,895</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Total current assets</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">53,397</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">55,390</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Property, plant and equipment, net of</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> accumulated depreciation of</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> $16,696 and $15,910</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">21,910</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">22,596</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Excess purchase price over net assets</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> acquired, net of accumulated</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> amortization of $5,546 and $5,186</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">13,347</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">13,617</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Deferred taxes</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4,449</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">5,347</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Other assets</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">5,002</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,729</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Total assets</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 98,105</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 99,679</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="2"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">LIABILITIES AND SHAREHOLDERS’ EQUITY</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Current maturities of long-term debt .</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 2,166</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 1,893</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Accounts payable</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">8,848</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,945</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Accrued expenses</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">12,956</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">11,943</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Total current liabilities</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">23,970</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">24,781</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Long-term debt</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">24,644</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">25,932</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Retirement benefits and other</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> non-current liabilities</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4,853</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4,232</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Shareholders’ equity:</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Preferred stock, $.01 par value;</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> nonvoting; 2,000,000 shares</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> authorized; none issued</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Common stock, $.01 par value;</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> 20,000,000 shares authorized;</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> 10,996,000 issued in 1999 and</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> 1998</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">110</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">110</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Paid-in capital</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">54,602</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">54,602</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Treasury stock at cost; 838,000</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> shares in 1999 and 1998</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(3,309</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(3,309</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Accumulated Deficit</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(4,251</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(4,303</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Accumulated other comprehensive</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> income</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(2,514</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(2,366</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Total shareholders’ equity</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">44,638</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">44,734</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Total liabilities and</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> shareholders’ equity</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 98,105</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 99,679</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="2"></TD></TR>
</TABLE>
<TABLE WIDTH=600>
<TR>
<TD>
<P ALIGN=CENTER><BR>See accompanying notes </P>
</TD>
</TR>
</TABLE>
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<TD>
<H1 ALIGN=CENTER><FONT SIZE=3><B>THE MIDDLEBY CORPORATION AND SUBSIDIARIES<BR>
CONSOLIDATED STATEMENTS OF EARNINGS<BR>(In Thousands, Except Per Share Amounts)<BR><BR>(Unaudited)</B></FONT></H1>
</TD>
</TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="4"><FONT SIZE="-2">Three Months Ended</FONT><HR WIDTH=90% SIZE=1 NOSHADE></TH>
<TH COLSPAN="4"><FONT SIZE="-2">Six Months Ended</FONT><HR WIDTH=90% SIZE=1 NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 3, 1999</FONT><HR WIDTH=80% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 4, 1998</FONT><HR WIDTH=80% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 3, 1999</FONT><HR WIDTH=80% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 4, 1998</FONT><HR WIDTH=80% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="54%" ALIGN="LEFT"><FONT SIZE="-1">Net sales</FONT></TD>
<TD WIDTH="3%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE="-1">$36,527</FONT></TD>
<TD WIDTH="3%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE="-1">$33,641</FONT></TD>
<TD WIDTH="3%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE="-1">$68,965</FONT></TD>
<TD WIDTH="3%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE="-1">$64,742</FONT></TD>
<TD WIDTH="2%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Cost of sales</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">25,801</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">22,969</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">48,616</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">44,632</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Gross profit</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,726</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,672</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">20,349</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">20,110</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Selling and distribution expenses</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4,675</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">5,417</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">9,341</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,518</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">General and administrative expenses</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,605</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,193</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">6,825</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">5,909</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Non-recurring expense</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">210</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">960</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Income from operations</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,236</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,062</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,223</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,683</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Interest expense and deferred</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> financing amortization</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">696</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">759</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,387</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,496</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Other expense (income), net</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">93</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">141</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">352</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">253</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Earnings before income taxes .</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,447</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,162</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,484</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,934</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Provision for income taxes</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,046</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">371</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,432</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">623</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Net earnings</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 401</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 791</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 52</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 1,311</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="2"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Net earnings per share:</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Basic</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 0.04</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 0.07</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 0.01</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 0.12</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Diluted</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 0.04</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 0.07</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 0.01</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 0.12</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Weighted average number of shares:</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Basic</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,158</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">11,007</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,158</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,972</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Diluted</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,258</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">11,202</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,251</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">11,170</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
</TABLE>
<TABLE WIDTH=600>
<TR>
<TD>
<BR>
<P ALIGN=CENTER>See accompanying notes </P>
</TD>
</TR>
</TABLE>
<!-- *************************************************************************** -->
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<HR SIZE=5 NOSHADE>
<TABLE WIDTH=600>
<TR>
<TD>
<H1 ALIGN=CENTER><FONT SIZE=3><B>THE MIDDLEBY CORPORATION AND SUBSIDIARIES<BR>
CONSOLIDATED STATEMENTS OF CASH FLOWS<BR>(In Thousands)<BR>(Unaudited)</B></FONT></H1>
</TD>
</TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="4"><FONT SIZE="-2">Six Months Ended</FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 3, 1999</FONT><HR WIDTH=55% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 4, 1998</FONT><HR WIDTH=65% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="64%" ALIGN="LEFT"><FONT SIZE="-1">Cash flows from operating activities-</FONT></TD>
<TD WIDTH="4%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="6%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="2%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Net earnings</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 52</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 1,311</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Adjustments to reconcile net earnings</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> to cash provided by continuing</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> operating activities-</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Depreciation and amortization</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,961</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,395</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Utilization of NOL’s</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,349</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">604</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Non-cash portion of non-recurring</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> expenses</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">428</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Changes in assets and liabilities-</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Accounts receivable</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(3,018</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(4,131</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Inventories</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,278</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(2,764</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Prepaid expenses and other assets</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(2,456</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(750</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Accounts payable</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(2,109</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(2,613</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Accrued expenses and other</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> liabilities</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">930</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">387</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Net cash used in operating activities .</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(585</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(6,561</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Cash flows from investing activities-</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Purchase of subsidiary minority</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> interest</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(1,134</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Additions to property and equipment</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(871</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(2,211</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Net cash used in investing activities .</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(871</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(3,345</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Cash flows from financing activities-</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Proceeds (repayments) under</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> intellectual property lease</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">319</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(451</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Decrease in revolving credit line, net</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(915</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Reduction in foreign bank debt</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(419</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Other financing activities, net</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(93</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">43</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Net cash used in</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> financing activities</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(689</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(827</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Effect of exchange rates on cash</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(212</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(55</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Changes in cash and cash equivalents-</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Net decrease in cash and cash</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> equivalents</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(2,357</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(10,788</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Cash and cash equivalents at</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> beginning of year</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">6,768</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">12,321</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Cash and cash equivalents at end</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> of quarter</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 4,411</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 1,533</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Interest paid</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 417</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 1,152</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Income taxes paid</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 83</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 558</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
</TABLE>
<TABLE WIDTH=600>
<TR>
<TD>
<BR>
<P ALIGN=CENTER>See accompanying notes </P>
</TD>
</TR>
</TABLE>
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<!-- MARKER LABEL="sheet: 6, page: 6" -->
<HR SIZE=5 NOSHADE>
<TABLE WIDTH=600>
<TR>
<TD>
<H1 ALIGN=CENTER><FONT SIZE=3><B>THE MIDDLEBY CORPORATION AND SUBSIDIARIES</B></FONT></H1>
<H1 ALIGN=CENTER><FONT SIZE=3><B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</B></FONT></H1>
<H1 ALIGN=CENTER><FONT SIZE=3><B>JULY 3, 1999<BR>(Unaudited)</B></FONT></H1>
<BR>
<H2 ALIGN=LEFT><FONT SIZE=3>1) Summary of Significant Accounting Policies</FONT></H2>
<P>The financial statements have been prepared by The Middleby
Corporation (the “Company”), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information not misleading. These
financial statements should be read in conjunction with the financial
statements and related notes contained in the Company’s 1998 Annual Report.
Other than as indicated herein, there have been no significant changes from the
data presented in said Report. </P>
<P>In the opinion of management, the financial statements contain
all adjustments necessary to present fairly the financial position of the
Company as of July 3, 1999 and January 2, 1999, and the results of operations
for the six months ended July 3, 1999 and July 4, 1998 and cash flows for the
six months ended July 3, 1999 and July 4, 1998. Certain prior year amounts have
been reclassified to be consistent with the current year presentation. </P>
<BR>
<H2 ALIGN=LEFT><FONT SIZE=3>2) Comprehensive Income</FONT></H2>
<P>During the first quarter of 1998, the Company adopted
Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive
Income,” (SFAS No. 130), which requires companies to report all changes in
equity during a period, except those resulting from investment by owners and
distribution to owners, in a financial statement for the period in which they
are recognized. </P>
<P>Components of comprehensive income were as follows: </P>
</TD>
</TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="4"><FONT SIZE="-2">Six Months Ended</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 3, 1999</FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 4, 1998</FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="4"><FONT SIZE="-2">(in thousands)</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="55%" ALIGN="LEFT"><FONT SIZE="-1">Net earnings</FONT></TD>
<TD WIDTH="5%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE="-1">$ 52</FONT></TD>
<TD WIDTH="7%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE="-1">$ 1,311</FONT></TD>
<TD WIDTH="7%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Cumulative translation</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> adjustment</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(148</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(258</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"><BR> Comprehensive (loss) income</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ (96</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 1,053</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="2"></TD></TR>
</TABLE>
<!-- *************************************************************************** -->
<!-- MARKER LABEL="sheet: 7, page: 7" -->
<TABLE WIDTH=600>
<TR>
<TD>
<BR>
<H2 ALIGN=LEFT><FONT SIZE=3>3) Inventories</FONT></H2>
<P>Inventories are valued using the first-in, first-out method. </P>
<P>Inventories consist of the following: </P>
</TD>
</TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 3, 1999</FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">January 2, 1999</FONT><HR WIDTH=55% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="4"><FONT SIZE="-2">(In thousands)</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="50%" ALIGN="LEFT"><FONT SIZE="-1">Raw materials and parts</FONT></TD>
<TD WIDTH="6%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE="-1">$ 3,976</FONT></TD>
<TD WIDTH="6%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE="-1">$ 5,281</FONT></TD>
<TD WIDTH="6%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Work-in-process</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4,441</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,743</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Finished goods</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">9,736</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">11,432</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$18,153</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$20,456</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="2"></TD></TR>
</TABLE>
<TABLE WIDTH=600>
<TR>
<TD>
<BR>
<H2 ALIGN=LEFT><FONT SIZE=3>4) Accrued Expenses</FONT></H2>
<P>Accrued expenses consist of the following: </P>
</TD>
</TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 3, 1999</FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">January 2, 1999</FONT><HR WIDTH=55% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="4"><FONT SIZE="-2">(In thousands)</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="52%" ALIGN="LEFT"><FONT SIZE="-1">Accrued payroll and</FONT></TD>
<TD WIDTH="6%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="6%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="6%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> related expenses</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 3,606</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 2,629</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Accrued customer rebates</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,009</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,088</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Accrued commissions</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,444</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,497</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Accrued warranty</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,014</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,372</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Other accrued expenses</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,883</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,357</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$12,956</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$11,943</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="2"></TD></TR>
</TABLE>
<HR SIZE=5 NOSHADE>
<TABLE WIDTH=600>
<TR>
<TD>
<BR>
<H2 ALIGN=LEFT><FONT SIZE=3>5) Non-recurring Expenses</FONT></H2>
<P>During the first half of 1999, the Company recorded
non-recurring expenses in the amount of $960,000 principally related to
severance benefits for terminated employees at the Cooking Systems Group and
the International Distribution Division. As of July 3, 1999, the remaining
liability associated with unpaid severance benefits amounted to $428,000. </P>
<P>During the fourth quarter of 1998, the Cooking Systems Group
recorded charges of $1,932,000 associated with the decision to discontinue
certain non-strategic product lines. Through the end of the quarter the Company
had incurred approximately $1,545,000 primarily associated with the sale and
disposal of the related assets. As of July 3, 1999, the remaining reserve
amounted to $387,000. All actions associated with this initiative will be fully
concluded by the end of the third quarter of 1999. </P>
</TD>
</TR>
</TABLE>
<!-- *************************************************************************** -->
<!-- MARKER LABEL="sheet: 8, page: 8" -->
<HR SIZE=5 NOSHADE>
<TABLE WIDTH=600>
<TR>
<TD>
<BR>
<H2 ALIGN=LEFT><FONT SIZE=3>6) Segment Information</FONT></H2>
<P>The Company operates in three reportable business segments
defined by factors including physical location, management reporting structure,
and operating activities. These segments include the Cooking Systems Group, the
International Specialty Equipment Division and the International Distribution
Division. </P>
<P>The accounting policies of the segments are the same as those
described in the summary of significant accounting policies. The Company
evaluates individual segment performance based on operating income.
Intersegment sales are made at established arms-length transfer prices. </P>
<P>The following table summarizes the results of operations for
the Company’s business segments: </P>
</TD>
</TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Cooking<BR>Systems<BR>Group</FONT><HR WIDTH=70% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">International<BR>Specialty<BR>Equipment</FONT><HR WIDTH=85% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">International<BR>Distribution</FONT><HR WIDTH=85% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Corporate<BR>and<BR>Other(1)</FONT><HR WIDTH=85% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Eliminations<BR>(2)</FONT><HR WIDTH=95% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Total</FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="34%" ALIGN="LEFT"><FONT SIZE="-1"><BR>Three months ended July 3, 1999</FONT></TD>
<TD WIDTH="3%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="3%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="4%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="4%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="4%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="4%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="2%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Net sales</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 28,112</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 1,179</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 10,476</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 65</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ (3,305</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 36,527</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Operating income (loss)</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4,241</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(383</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(642</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(1,063</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">83</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,236</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Non-recurring expense</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">86</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">124</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">210</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Depreciation expense</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">626</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">106</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">73</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">41</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">846</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Capital expenditures</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">476</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">28</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">22</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">47</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">573</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"><BR>Six months ended July 3, 1999</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Net sales</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">53,553</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,370</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">19,689</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">307</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(6,954</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">68,965</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Operating income (loss)</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">6,828</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(625</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(1,232</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(1,832</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">84</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,223</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Non-recurring expense</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">582</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">378</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">960</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Depreciation expense</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,177</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">213</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">146</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">91</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,627</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Capital expenditures</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">709</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">58</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">47</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">57</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">871</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Total assets</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">47,895</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,008</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">21,663</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">29,521</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(10,982</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">98,105</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Long-lived assets</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">17,759</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,808</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,125</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">22,016</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">44,708</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"><BR>Three months ended July 4, 1998</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Net sales</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">27,121</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,248</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">9,710</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">249</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(4,687</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">33,641</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Operating income (loss)</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,318</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">96</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(304</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(1,048</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,062</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Non-recurring expense</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Depreciation expense</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">407</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">76</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">64</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">24</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">571</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Capital expenditures</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,021</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">8</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,032</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"><BR>Six months ended July 4, 1998</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Net sales</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">49,788</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,613</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">18,991</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,127</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(7,777</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">64,742</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Operating income (loss)</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">5,603</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">236</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(663</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(1,493</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,683</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Non-recurring expense</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Depreciation expense</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">783</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">151</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">131</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">62</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,127</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Capital expenditures</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,960</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">72</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">132</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">47</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,211</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"><BR>Total assets</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">60,592</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,156</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">22,977</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">20,563</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(10,982</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">103,306</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Long-lived assets</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">24,297</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4,151</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,386</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">12,781</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">42,615</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
</TABLE>
<BR>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(1)
</TD>
<TD WIDTH=95%><P>Includes sales of discontinued
product lines in addition to corporate and other general Company assets and
operations. </P></TD></TR></TABLE>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(2)
</TD>
<TD WIDTH=95%><P>Includes elimination of intercompany
sales and receivables. Intercompany sale transactions are predominantly from
the Cooking Systems Group to the International Distribution Division. </P></TD></TR></TABLE>
<!-- *************************************************************************** -->
<!-- MARKER LABEL="sheet: 9, page: 9" -->
<HR SIZE=2 NOSHADE>
<TABLE WIDTH=600>
<TR>
<TD>
<P>Net sales by major geographic region, including those sales
from the Cooking Systems Group direct to international customers, were as
follows (in thousands): </P>
</TD>
</TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="4"><FONT SIZE="-2">Three Months Ended</FONT><HR WIDTH=55% SIZE=1 NOSHADE></TH>
<TH COLSPAN="4"><FONT SIZE="-2">Six Months Ended</FONT><HR WIDTH=55% SIZE=1 NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 3,</FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 4,</FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 3,</FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 4,</FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="2"><FONT SIZE="-2">1999</FONT><HR WIDTH=25% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">1998</FONT><HR WIDTH=25% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">1999</FONT><HR WIDTH=25% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">1998</FONT><HR WIDTH=25% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="40%" ALIGN="LEFT"><FONT SIZE="-1">United States</FONT></TD>
<TD WIDTH="4%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE="-1">$24,765</FONT></TD>
<TD WIDTH="4%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE="-1">$22,791</FONT></TD>
<TD WIDTH="4%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE="-1">$46,818</FONT></TD>
<TD WIDTH="4%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE="-1">$42,726</FONT></TD>
<TD WIDTH="4%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Asia</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,669</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,215</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">7,003</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">7,289</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Europe and Middle East</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,696</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,378</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">6,825</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">7,338</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Latin America</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,123</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,015</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">5,785</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">5,168</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Canada</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,274</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,242</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,534</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,221</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Total International</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">11,762</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,850</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">22,147</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">22,016</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Net Sales</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$36,527</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$33,641</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$68,965</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$64,742</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="2"></TD></TR>
</TABLE>
<HR SIZE=5 NOSHADE>
<TABLE WIDTH=600>
<TR>
<TD>
<BR>
<H2 ALIGN=LEFT><FONT SIZE=3>Item 2. Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Unaudited).</FONT></H2>
<H2 ALIGN=LEFT><FONT SIZE=3>Informational Note</FONT></H2>
<P>This report contains forward-looking statements subject to the
safe harbor created by the Private Securities Litigation Reform Act of 1995.
The Company cautions readers that these projections are based upon future
results or events and are highly dependent upon a variety of important factors
which could cause such results or events to differ materially from any
forward-looking statements which may be deemed to have been made in this
report, or which are otherwise made by or on behalf of the Company. Such
factors include, but are not limited to, changing market conditions; the
availability and cost of raw materials; the impact of competitive products and
pricing; the timely development and market acceptance of the Company’s
products; foreign exchange and political risks affecting international sales,
in particular any continued weakness in Asian economies; and other risks
detailed herein and from time to time in the Company’s Securities and Exchange
Commission filings, including those discussed under “Risk Factors” in the
Company’s Registration Statement on Form S-2 (Reg. No. 333-35397). Any forward
looking statements contained in this report speak only as of the date of this
filing. The Company undertakes no obligation to update publicly any forward
looking information, whether as a result of new information, future events or
otherwise. </P>
</TD>
</TR>
</TABLE>
<!-- *************************************************************************** -->
<!-- MARKER LABEL="sheet: 10, page: 10" -->
<HR SIZE=5 NOSHADE>
<TABLE WIDTH=600>
<TR>
<TD>
<H2 ALIGN=center><FONT SIZE=3><U>Net Sales Summary</U></FONT></H2>
</TD>
</TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="8"><FONT SIZE="-2">Three Months Ended</FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
<TH COLSPAN="8"><FONT SIZE="-2">Six Months Ended </FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="4"><FONT SIZE="-2">July 3, 1999</FONT><HR WIDTH=65% SIZE=1 NOSHADE></TH>
<TH COLSPAN="4"><FONT SIZE="-2">July 4, 1998</FONT><HR WIDTH=65% SIZE=1 NOSHADE></TH>
<TH COLSPAN="4"><FONT SIZE="-2">July 3, 1999</FONT><HR WIDTH=65% SIZE=1 NOSHADE></TH>
<TH COLSPAN="4"><FONT SIZE="-2">July 4, 1998</FONT><HR WIDTH=65% SIZE=1 NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Sales </FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Percent</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Sales </FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Percent</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Sales </FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Percent</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Sales </FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Percent</FONT><HR WIDTH=75% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="31%" ALIGN="LEFT"><FONT SIZE="-1">Business Divisions</FONT></TD>
<TD WIDTH="2%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="3%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="3%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="3%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="3%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="3%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="3%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="3%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE="-1"></FONT></TD>
<TD WIDTH="2%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"><BR>Conveyor oven</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> equipment</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 13,374</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">36.6</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 12,601</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">37.5</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 24,809</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">36.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 22,142</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">34.2</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Counterline cooking</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> equipment</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3,667</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4,391</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">13.1</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">7,199</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10.4</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">7,997</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">12.4</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Core cooking</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> equipment</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">11,071</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">30.3</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,129</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">30.1</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">21,546</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">31.3</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">19,649</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">30.3</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="18"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"><BR>Total Cooking Systems</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Group</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">28,112</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">76.9</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">27,121</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">80.6</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">53,554</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">77.7</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">49,788</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">76.9</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">International Specialty</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Equipment</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,179</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3.2</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,248</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3.7</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,370</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3.4</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,613</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"><BR>International</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Distribution (1)</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,476</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">28.7</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">9,710</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">28.9</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">19,688</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">28.6</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">18,991</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">29.3</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="18"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"><BR>Total international</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> divisions</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">11,655</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">31.9</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,958</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">32.6</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">22,058</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">32.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">21,604</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">33.4</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"><BR>Intercompany</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> sales (2)</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(3,305</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(9.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(4,687</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(13.9</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(6,954</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(10.1</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(7,777</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(12.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">)</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Other</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">65</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">0.2</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">249</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">0.7</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">307</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">0.4</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,127</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1.7</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="18"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"><BR> Total</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 36,527</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">100.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 33,641</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">100.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 68,965</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">100.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ 64,742</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">100.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="18"><HR NOSHADE SIZE="2"></TD></TR>
</TABLE>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(1)
</TD>
<TD WIDTH=95%><P>Consists of sales of products
manufactured by Middleby and products manufactured by third parties. </P></TD></TR></TABLE>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>(2)
</TD>
<TD WIDTH=95%><P>Consists of sales to the Company’s
international distribution division from the Company’s other business divisions. </P></TD></TR></TABLE>
<BR>
<HR SIZE=5 NOSHADE>
<TABLE WIDTH=600>
<TR>
<TD>
<H2 ALIGN=LEFT><FONT SIZE=3>Results of Operations</FONT></H2>
<P>The following table sets forth certain consolidated statements
of earnings items as a percentage of net sales for the periods. </P>
</TD>
</TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="4"><FONT SIZE="-2">Three Months Ended</FONT><HR WIDTH=85% SIZE=1 NOSHADE></TH>
<TH COLSPAN="4"><FONT SIZE="-2">Six Months Ended </FONT><HR WIDTH=85% SIZE=1 NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 3, 1999</FONT><HR WIDTH=85% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 4, 1998</FONT><HR WIDTH=85% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 3, 1999</FONT><HR WIDTH=85% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">July 4, 1998</FONT><HR WIDTH=85% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="48%" ALIGN="LEFT"><FONT SIZE="-1">Net sales</FONT></TD>
<TD WIDTH="4%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1">100.0</FONT></TD>
<TD WIDTH="5%" ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1">100.0</FONT></TD>
<TD WIDTH="5%" ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1">100.0</FONT></TD>
<TD WIDTH="5%" ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE="-1">100.0</FONT></TD>
<TD WIDTH="5%" ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Cost of sales</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">70.6</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">68.3</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">70.5</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">68.9</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Gross profit</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">29.4</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">31.7</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">29.5</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">31.1</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Selling, general and administrative</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> expenses</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">22.7</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">25.6</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">23.4</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">25.4</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Non-recurring expense</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">0.6</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1.4</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Income from operations</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">6.1</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">6.1</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4.7</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">5.7</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Interest expense and deferred</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> financing amortization, net</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1.9</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2.2</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2.3</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Other (income) expense, net</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">0.2</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">0.4</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">0.5</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">0.4</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Earnings before income taxes</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3.5</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2.2</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">3.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">Provision for income taxes</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2.9</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1.1</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2.1</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> Net earnings</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1.1</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2.4</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">0.1</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2.0</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1">%</FONT></TD></TR>
<TR>
<TD COLSPAN="10"><HR NOSHADE SIZE="2"></TD></TR>
</TABLE>
<!-- *************************************************************************** -->
<!-- MARKER LABEL="sheet: 11, page: 11" -->
<HR SIZE=5 NOSHADE>
<TABLE WIDTH=600>
<TR>
<TD>
<H2 ALIGN=LEFT><FONT SIZE=3>Three Months Ended July 3, 1999 Compared to Three Months Ended July 4, 1998</FONT></H2>
<P><B>NET SALES.</B> Net sales in the three-month period ended July 3,
1999 increased 9% to $36.5 million as compared to $33.6 million in the
three-month period ended July 4, 1998. </P>
<P>Sales of the Cooking Systems Group for the three-month period
ended July 3, 1999 increased 4% to $28.1 million from $27.1 million in the
prior year. Sales of conveyor oven equipment increased 6% due to continued
strength in sales to major restaurant chains. Core cooking equipment sales
increased 9% with continued success of new product introductions and market
penetration. Sales of counterline equipment decreased 16% due to the
replacement of certain product offerings, as the Company continues to
strengthen the Toastmaster brand. </P>
<P>Sales of the international divisions increased 6% to $11.7
million from $11.0 million in the previous year period. Net sales of the
International Distribution Division increased by 8%. Improved sales in most international markets were
offset in part by reduced sales into
Japan, and the Philippines. Sales of the International Specialty Equipment
Division decreased by $69,000, or 5%, reflecting continued sluggishness of
restaurant, hotel and resort development within the region. </P>
<P><B>GROSS PROFIT.</B> Gross profit remained consistent with the prior year period
at $10.7 million.
As a percentage of sales, gross margins decreased from 31.7% in the prior year
to 29.4%, principally due to lower margins at the Philippines manufacturing
operation resulting from lower volume and unfavorable sales mix. Also, margins
for the International Distribution business were slightly lower due to costs
associated with inventory reduction programs, which have resulted in a 25%
decrease in inventory levels within Asia and Europe since year-end. Further,
provisions for inventory increased for potential exposures resulting from
product replacement decisions at the Cooking Systems Group. </P>
<P><B>SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.</B> Selling, general
and administrative expenses decreased to $8.3 million as compared to $8.6
million in the prior year period. As a percentage of net sales, expenses
decreased to 22.7% as compared to 25.6%. The net decrease reflects the partial
impact of cost reductions made during the first half of the year and lower
commissions expense. </P>
<P><B>NON-RECURRING EXPENSES.</B> Non-recurring expenses of
approximately $0.2 million were recorded during the quarter for severance and
benefit costs associated with employee reduction efforts at the Cooking Systems
Group and the International Distribution division. </P>
</TD>
</TR>
</TABLE>
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<TR>
<TD>
<P><B>INCOME FROM OPERATIONS.</B> Income from operations increased to $2.2 million
from $2.1 million in the prior year. The net change in earnings reflects
increased sales offset by lower gross margins and the effect of non-recurring
expenses. </P>
<P><B>NON-OPERATING EXPENSES.</B> Non-operating expenses decreased to $0.8 million
from $0.9 million in the prior year due in part to slightly reduced interest
expense on lower borrowings. </P>
<P><B>INCOME TAXES.</B> A tax provision of $1.0 million at an effective rate of 72%
was recorded during the quarter primarily associated with taxable income
reported at the domestic operations, while no benefit was recognized for losses
at international subsidiaries. </P>
<BR>
<HR SIZE=5 NOSHADE>
<BR>
<H2 ALIGN=LEFT><FONT SIZE=3>Six Months Ended July 3, 1999 Compared to Six Months Ended July 4, 1998</FONT></H2>
<P><B>NET SALES.</B> Net sales in the six-month period ended July 3, 1999 increased 7%
to $69.0 million as compared to $64.7 million in the six-month period ended
July 3, 1998. </P>
<P>Sales of the Cooking Systems Group for the six-month period ended July 3,
1999 increased 8% to $53.6 million from $49.8 million in the prior year. Sales
of conveyor oven equipment increased 12% due to improved sales to major
restaurant chains. Core cooking equipment sales increased 10% largely due to
market penetration and success with new product introductions. Counterline
equipment sales decreased 10% due to product replacement as the Company
continues with efforts to strengthen the Toastmaster product offering. </P>
<P>Sales of the international divisions increased 2% to $22.1 million from
$21.6 million in the previous year period. Net sales of the International
Distribution division increased by 4% with greater sales in Latin America and
Canada, offset by decreased sales in Europe and Asia. Within Asia, improving
sales within Taiwan and Korea have been more than offset by reduced sales into
Japan, the Philippines and certain other Asian markets. Sales of the
International Specialty Equipment division decreased 9% from the prior year
period, as a result of continued sluggishness of restaurant, hotel and resort
development within the region. Prior year revenue included sales to a certain
major U.S. restaurant chain, which has temporarily slowed the rate of store
openings within Asia. </P>
<P><B>GROSS PROFIT.</B> Gross profit increased to $20.3 million from $20.1 million.
However, as a percentage of sales, gross margins decreased from 31.1% to 29.5%.
Margin percentage has been affected by lower margins at the Philippines
manufacturing operation resulting from lower volume and unfavorable sales mix.
Margins for the Cooking Systems Group have been impacted by provisions for
inventory associated with product replacement decisions and by higher warranty
costs associated with new product offerings. Also, margins for the
International Distribution business were slightly lower due to costs associated
with inventory reduction programs. </P>
</TD>
</TR>
</TABLE>
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<TR>
<TD>
<P><B>SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.</B> Selling, general and
administrative expenses decreased from $16.4 million to $16.2 million. As a
percentage of net sales, selling, general and administrative expenses decreased
to 23.4% as compared to 25.4%. Expenses for the first half of the year reflect
higher commissions and marketing costs offset by the partial benefit of cost
reduction measures implemented during the first and second quarters of 1999. </P>
<P><B>NON-RECURRING EXPENSES.</B> Non-recurring expenses of approximately $1.0 million
were recorded during the six months ended July 3, 1999 for severance and
benefit costs associated with employee reduction efforts and office relocations
at the International Distribution division and the Cooking Systems Group.
Employee headcount has been reduced as a result of the cost reduction measures
to 872 at the end of the quarter as compared to 994 at the fiscal year-end of
1998. </P>
<P><B>INCOME FROM OPERATIONS.</B> Income from operations decreased to $3.2 million
from $3.7 million in the prior year, principally due to non-recurring expenses
incurred during 1999. Excluding non-recurring expenses, income from operations
increased by $0.5 million to $4.1 million, as a result of increased sales and
the benefit of continuing cost reduction efforts. </P>
<P><B>NON-OPERATING EXPENSES.</B> Non-operating expenses of $1.7 million remained
consistent with the prior year period. Interest expense decreased by $0.1
million from the prior year on lower borrowings, while other expense increased
by $0.1 million due in part to foreign exchange losses. </P>
<P><B>INCOME TAXES.</B> A tax provision of $1.4 million was recorded during the six
months ended July 3, 1999 at an effective rate of 96%. A provision has been
recorded for income associated with U.S. operations, while no benefit has been
recorded for losses associated with the foreign operations. </P>
<BR><HR SIZE=5 NOSHADE>
<BR>
<H2 ALIGN=LEFT><FONT SIZE=3>Financial Condition and Liquidity</FONT></H2>
<P>Total cash and cash equivalents decreased by $2.4 million to $4.4 million at
July 3, 1999 from $6.8 million at January 2, 1999. Net borrowings declined from
$27.8 million at January 2, 1999 to $26.8 million at July 3, 1999. The net use
of liquidity was primarily to fund capital expenditures of $0.9 million and
operating activities of $0.6 million. </P>
<P><B>OPERATING ACTIVITIES.</B> Net cash provided by operating activities before
changes in assets and liabilities was $3.7 million in the six months ended July
3, 1999 as compared to $3.3 million in the prior year period. Net cash used by
operating activities after changes in assets and liabilities was $0.6 million
as compared to $6.6 million in the prior year period. The improvement in
operating cash flow from the prior year period is largely due to inventory
reduction efforts which took place during the first six months of 1999,
representing a $5.0 million improvement in cash flow from the prior year period. </P>
</TD>
</TR>
</TABLE>
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<TABLE WIDTH=600>
<TR>
<TD>
<P>During the first six months of 1999, accounts receivables increased $3.0
million due to increased domestic sales and slower collections of receivables in the
Philippines from a certain major restaurant chain due to a delay in store
openings. Inventories decreased by $2.3 million as a result of the Company’s
inventory reduction efforts, particularly within the international markets. The
net increase in prepaid expenses and other assets of $2.2 million was
principally due to the establishment of a trust to fund retirement benefits
under executive employment agreements. Accounts payable decreased $2.1 million
due to the timing of payments, including the effect of repayments of payables
which were extended at the prior year-end. Accrued expenses and other
liabilities increased $0.9 million due to increased reserve levels associated
with severance requirements and an increase in liabilities under certain sales
related programs. </P>
<P><B>INVESTING ACTIVITIES.</B> During the first half of 1999, the Company had capital
expenditures of $0.9 million primarily to enhance manufacturing capabilities
and upgrade computer systems at the Cooking Systems Group. </P>
<P><B>FINANCING ACTIVITIES.</B> Net borrowings under financing arrangements decreased
from $27.8 million to $26.8 million during the first half of 1999. The net
decrease is primarily due to the repayment of $0.9 million in borrowings in a
peseta-denominated loan under the Company’s multi-currency revolving line of
credit during the second quarter of 1999. </P>
<P>During the first quarter of 1999, the Company’s financing agreements were
amended to reduce the credit limit under the revolving credit facility from
$20.0 million to $10.0 million and to adjust the minimum requirements for
certain covenants which the Company had violated at year-end. As of July 3,
1999, the Company was in compliance with the amended covenants. Management
believes that the Company will have sufficient financial resources available to
meet its anticipated requirements for working capital, growth strategies,
capital expenditures and debt amortization for the foreseeable future. </P>
<BR>
<HR SIZE=5 NOSHADE>
<BR>
<H2 ALIGN=LEFT><FONT SIZE=3>Year 2000 Compliance</FONT></H2>
<P>The Company has assessed and continues to assess the impact of the Year 2000
issue on its reporting systems and operations. The Year 2000 issue exists
because many computer systems and applications currently use two-digit date
fields to designate a year. As the century date occurs, date sensitive systems
may recognize the Year 2000 as 1900 or not at all. This inability to recognize
or properly treat the year 2000 may cause the Company’s systems to process
critical financial and operational information incorrectly. </P>
<P>The Company has undertaken a review of its information technology (“IT”)
systems. The Company has implemented new IT systems at its International
Distribution Division to enhance its current transaction processing and
information reporting capabilities. These systems are Year 2000 compliant. </P>
</TD>
</TR>
</TABLE>
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<TR>
<TD>
<P>In addition, the Company has substantially completed upgrades to existing IT
systems at all other business units to make these systems Year 2000 compliant. </P>
<P>The Company has also undertaken a review of its critical non-IT systems,
such as production machinery and phone systems. The Company is in the process
of contacting equipment vendors and service providers to assess the potential
risk associated with these systems. Non-compliant systems will be replaced or
modified. Based upon internal evaluations and assurances provided by equipment
and service vendors, the Company does not believe significant modification to
or replacement of existing non-IT systems will be required. However, the
Company cannot verify the assurances it has been provided from third parties. </P>
<P>Additionally, a review of key suppliers and customers is in process to
ensure that the flow of products and services will not be disrupted as a result
of failure of the supplier or customer to become Year 2000 compliant. While the
Company is receiving assurances that no such interruption will occur, the
Company cannot ensure that third parties will become compliant. Any significant
or prolonged interruption in the supply of essential services or products would
adversely affect the Company’s operations and ability to conduct business. In
the event that the Company identifies problems with a service provider or other
vendor, it will attempt to obtain services and products from other available
sources. Similarly, problems with a significant portion of the Company’s
customers in processing and paying invoices could materially impact the
Company’s cash flows or liquidity. The Company is unable to anticipate whether
a significant portion of its customers will have difficulty in processing and
paying invoices. </P>
<P>Expenses associated with the Year 2000 issue relate primarily to the
modification of existing IT systems, and to date have not been material. The
Company anticipates that remaining costs to fully address these matters will
not exceed $0.1 million. The Company does not anticipate that future costs to
address the Year 2000 issue will have a material effect on its financial
condition. </P>
<P>The foregoing is a Year 2000 readiness disclosure entitled to protection as
provided in the Year 2000 Information and Readiness Disclosure Act. </P>
<BR>
<HR SIZE=5 NOSHADE>
<BR>
<H2 ALIGN=LEFT><FONT SIZE=3>International Exposure</FONT></H2>
<P>The Company has manufacturing operations located in Asia and distribution
operations in Asia, Canada, Europe and Latin America. The Company anticipates
that international sales will continue to account for a significant portion of
consolidated net sales in the foreseeable future. Countries within Asia and
certain other regions continue to be impacted by adverse economic conditions
which have affected the Company’s sales volumes into these markets. Some sales
by the foreign operations are in local currency and an increase in the relative
value of the U.S. dollar against such currencies would lead to the reduction in
consolidated U.S. dollar sales and earnings. </P>
</TD>
</TR>
</TABLE>
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<TR>
<TD>
<P>Additionally, foreign currency exposures are currently not specifically
hedged and there can be no assurances that the Company’s future results of
operations will not be adversely affected by currency fluctuations. </P>
<BR>
<HR SIZE=5 NOSHADE>
<BR>
<H2 ALIGN=LEFT><FONT SIZE=3>Item 3. Quantitative and Qualitative Disclosures About Market Risk</FONT></H2>
<P>The Company is exposed to market risk related to changes in interest rates.
The following table summarizes the maturity of the Company’s debt obligations: </P>
</TD>
</TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Fixed<BR>Rate<BR>Debt</FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH>
<TH COLSPAN="2"><FONT SIZE="-2">Variable<BR>Rate<BR>Debt</FONT><HR WIDTH=45% SIZE=1 NOSHADE></TH></TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN="2"><FONT SIZE="-2"></FONT></TH>
<TH COLSPAN="4"><FONT SIZE="-2">(dollars in thousands)</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="16%" ALIGN="LEFT"><FONT SIZE="-1">1999</FONT></TD>
<TD WIDTH="18%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="21%" ALIGN="RIGHT"><FONT SIZE="-1">$ 1,999</FONT></TD>
<TD WIDTH="12%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD WIDTH="21%" ALIGN="RIGHT"><FONT SIZE="-1">$ —</FONT></TD>
<TD WIDTH="12%" ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">2000</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">10,096</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">2001</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">4,981</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,234</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">2002</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">5,000</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1">2003</FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,500</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">—</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="1"></TD></TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD><TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$24,576</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$2,234</FONT></TD>
<TD ALIGN="LEFT"><FONT SIZE="-1"> </FONT></TD></TR>
<TR>
<TD COLSPAN="6"><HR NOSHADE SIZE="2"></TD></TR>
</TABLE>
<TABLE WIDTH=600>
<TR>
<TD>
<P>Fixed rate debt is comprised of a $15.0 million senior note and $9.6 million
due under lease arrangements. The senior note bears interest at a rate of
10.99% and the lease arrangements bear interest at an average implicit interest
rate of 10.2%. Variable rate debt is comprised of a $2.2 million yen
denominated loan under the Company’s $10.0 million revolving credit line.
Interest under the revolving credit facility is assessed based upon the bank’s
reference rate. The average interest rate assessed to the yen denominated loan
during the first half of 1999 was 0.9%. </P>
<H1 ALIGN=CENTER><FONT SIZE=3>PART II. OTHER INFORMATION</FONT></H1>
<P>The Company was not required to report the information pursuant to Items 1
through 6 of Part II of Form 10-Q for the three months ended July 3, 1999,
except as follows: </P>
<H1 ALIGN=left><FONT SIZE=3>Item 6. Exhibits and Reports on Form 8-K</FONT></H1>
</TD>
</TR>
</TABLE>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>a)
</TD>
<TD WIDTH=95%><P>Exhibits - The following Exhibits are
filed herewith: </P></TD></TR></TABLE>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>
</TD>
<TD WIDTH=95%><P> Exhibit (27) - Financial Data Schedules
(EDGAR only) </P></TD></TR></TABLE>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>b)
</TD>
<TD WIDTH=95%><P>Reports on Form 8-K: </P></TD></TR></TABLE>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%></TD>
<TD WIDTH=95%><P> None. </P></TD></TR></TABLE>
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<TABLE WIDTH=600>
<TR>
<TD>
<H1 ALIGN=CENTER><FONT SIZE=3>SIGNATURES</FONT></H1>
<P>Pursuant to the requirements 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. </P>
</TD>
</TR>
</TABLE>
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=45%></TD>
<TD WIDTH=5%></TD>
<TD WIDTH=50%><BR><U>THE MIDDLEBY CORPORATION</U><BR>
(Registrant)</TD></TR>
<TR VALIGN=TOP>
<TD> </TD>
<TD> </TD>
<TD> </TD></TR>
<TR VALIGN=TOP>
<TD>Date: <U> August 16, 1999 </U></TD>
<TD>By:</TD>
<TD><U>/s/ John J. Hastings </U>
<BR><BR>John J. Hastings, Executive<BR>Vice President, Chief<BR>Financial Officer and<BR>
Secretary<BR>(Principal Financial and<BR>Accounting Officer)</TD></TR>
</TABLE>
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</BODY>
</HTML>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-01-2000
<PERIOD-START> APR-03-1999
<PERIOD-END> JUL-03-1999
<CASH> 4,411
<SECURITIES> 0
<RECEIVABLES> 27,156
<ALLOWANCES> 0
<INVENTORY> 18,153
<CURRENT-ASSETS> 53,397
<PP&E> 38,606
<DEPRECIATION> 16,696
<TOTAL-ASSETS> 98,105
<CURRENT-LIABILITIES> 23,970
<BONDS> 0
0
0
<COMMON> 110
<OTHER-SE> 44,528
<TOTAL-LIABILITY-AND-EQUITY> 98,105
<SALES> 36,527
<TOTAL-REVENUES> 36,527
<CGS> 25,801
<TOTAL-COSTS> 25,801
<OTHER-EXPENSES> 8,490
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 696
<INCOME-PRETAX> 1,447
<INCOME-TAX> 1,046
<INCOME-CONTINUING> 401
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 401
<EPS-BASIC> 0.04
<EPS-DILUTED> 0.04
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