FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
__X__ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended April 3, 1999
or
_____ Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File No. 1-9973
THE MIDDLEBY CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 36-3352497
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
2850 W. Golf Road, Suite 405, Rolling Meadows, Illinois 60008
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone No., including Area Code (847) 758-3880
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 _____
As of April 3, 1999, there were 10,157,721 shares of the Registrant's common
stock outstanding.
<PAGE>
THE MIDDLEBY CORPORATION AND SUBSIDIARIES
QUARTER ENDED APRIL 3, 1999
INDEX
DESCRIPTION PAGE
- ----------- ----
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
BALANCE SHEETS 1
April 3, 1999 and January 2, 1999
STATEMENTS OF EARNINGS 2
April 3, 1999 and April 4, 1998
STATEMENTS OF CASH FLOWS 3
April 3, 1999 and April 4, 1998
NOTES TO FINANCIAL STATEMENTS 4
Item 2. Management's Discussion and Analysis 7
of Financial Condition and Results of
Operations
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 12
PART II. OTHER INFORMATION 13
<PAGE>
PART I. FINANCIAL INFORMATION
THE MIDDLEBY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(Unaudited)
April 3, 1999 January 2, 1999
------------- ---------------
ASSETS
Cash and cash equivalents ................... $ 3,324 $ 6,768
Accounts receivable, net .................... 24,714 24,330
Inventories, net ............................ 20,718 20,456
Prepaid expenses and other .................. 726 941
Current deferred taxes ...................... 2,895 2,895
-------- --------
Total current assets ................... 52,377 55,390
Property, plant and equipment, net of
accumulated depreciation of
$16,537 and $15,910 ....................... 22,319 22,596
Excess purchase price over net assets
acquired, net of accumulated
amortization of $5,321 and $5,186 ......... 13,481 13,617
Deferred taxes .............................. 5,160 5,347
Other assets ................................ 3,754 2,729
-------- --------
Total assets .................... $ 97,091 $ 99,679
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt ........ $ 1,821 $ 1,893
Accounts payable ............................ 9,241 10,945
Accrued expenses ............................ 11,255 11,943
-------- --------
Total current liabilities .............. 22,317 24,781
Long-term debt .............................. 25,762 25,932
Retirement benefits and other
non-current liabilities ................... 4,574 4,232
Shareholders' equity:
Preferred stock, $.01 par value;
nonvoting; 2,000,000 shares
authorized; none issued ................. -- --
Common stock, $.01 par value;
20,000,000 shares authorized;
10,996,000 issued in 1999 and
1998 .................................... 110 110
Paid-in capital ........................... 54,602 54,602
Treasury stock at cost; 838,000
shares in 1999 and 1998 ................. (3,309) (3,309)
Accumulated deficit ....................... (4,653) (4,303)
Accumulated other comprehensive
income .................................. (2,312) (2,366)
Total shareholders' equity ............. 44,438 44,734
-------- --------
Total liabilities and
shareholders' equity .......... $ 97,091 $ 99,679
======== ========
See accompanying notes
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<PAGE>
THE MIDDLEBY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended
------------------------------
April 3, 1999 April 4, 1998
------------- -------------
Net sales ..................................... $ 32,441 $ 31,101
Cost of sales ................................. 22,815 21,663
-------- --------
Gross profit ......................... 9,626 9,438
Selling and distribution expenses ............. 4,670 5,101
General and administrative expenses ........... 3,220 2,716
Non-recurring expense ......................... 750 --
-------- --------
Income from operations ............... 986 1,621
Interest expense and deferred
financing amortization ...................... 690 737
Other expense(income), net .................... 259 112
-------- --------
Earnings before income taxes ......... 37 772
Provision for income taxes .................... 387 252
-------- --------
Net (loss) earnings .................. $ (350) $ 520
======== ========
Net (loss) earnings per share:
Basic ................................ $ (0.03) $ 0.05
Diluted .............................. $ (0.03) $ 0.05
Weighted average number of shares
Basic ................................ 10,158 10,946
Diluted .............................. 10,158 11,139
See accompanying notes
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<PAGE>
THE MIDDLEBY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended
------------------------------
April 3, 1999 April 4, 1998
------------- -------------
Cash flows from operating activities-
Net (loss) earnings .......................... $ (350) $ 520
Adjustments to reconcile net earnings
to cash provided by continuing
operating activities-
Depreciation and amortization .............. 936 685
Utilization of NOL's ....................... 330 250
Non-cash portion of non-recurring
expenses ................................. 530 --
Changes in assets and liabilities-
Accounts receivable ...................... (451) (1,133)
Inventories .............................. (332) (2,671)
Prepaid expenses and other assets ........ (830) 216
Accounts payable ......................... (1,704) (2,640)
Accrued expenses and other
liabilities ........................... (1,019) (1,949)
-------- --------
Net cash used in operating activities ...... (2,890) (6,722)
-------- --------
Cash flows from investing activities-
Purchase of subsidiary minority interest ..... -- (1,134)
Additions to property and equipment .......... (298) (1,179)
-------- --------
Net cash used in investing activities ........ (298) (2,313)
-------- --------
Cash flows from financing activities-
Proceeds (repayments) under
intellectual property lease ................ 95 (451)
Reduction in foreign bank debt ............... -- (680)
Other financing activities, net .............. (48) 41
-------- --------
Net cash provided by (used in)
financing activities ....................... 47 (1,090)
-------- --------
Effect of exchange rates on cash ......... (303) (69)
-------- --------
Changes in cash and cash equivalents-
Net decrease in cash and cash
equivalents ................................ (3,444) (10,194)
Cash and cash equivalents at
beginning of year .......................... 6,768 12,321
-------- --------
Cash and cash equivalents at end
of quarter ................................. $ 3,324 $ 2,127
======== ========
Interest paid .................................. $ 641 $ 720
======== ========
Income taxes paid .............................. $ -- $ 513
======== ========
See accompanying notes
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<PAGE>
THE MIDDLEBY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 3, 1999
(Unaudited)
1) Summary of Significant Accounting Policies
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.
In the opinion of management, the financial statements contain all
adjustments necessary to present fairly the financial position of the
Company as of April 3, 1999 and January 2, 1999, and the results of
operations for the three months ended April 3, 1999 and April 4, 1998 and
cash flows for the three months ended April 3, 1999 and April 4, 1998.
Certain prior year amounts have been reclassified to be consistent with the
current year presentation.
2) Comprehensive Income
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.
Components of comprehensive income were as follows:
April 3, 1999 April 4, 1998
------------- -------------
(In thousands)
Net (loss) earnings ....................... $(350) $ 520
Cumulative translation
adjustment .............................. 54 279
----- -----
Comprehensive (loss) income ........ $(296) $ 799
===== =====
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<PAGE>
3) Inventories
Inventories are valued using the first-in, first-out method.
Inventories consist of the following:
April 3, 1999 January 2, 1999
------------- ---------------
(In thousands)
Raw materials and parts ............ $ 5,907 $ 5,281
Work-in-process .................... 3,816 3,743
Finished goods ..................... 10,995 11,432
------- -------
$20,718 $20,456
======= =======
4) Accrued Expenses
Accrued expenses consist of the following:
April 3, 1999 January 2, 1999
------------- ---------------
(In thousands)
Accrued payroll and
related expenses ................. $ 2,423 $ 2,629
Accrued customer rebates ........... 1,315 3,088
Accrued commissions ................ 1,496 1,497
Accrued warranty ................... 1,755 1,372
Other accrued expenses ............. 4,266 3,357
------- -------
$11,255 $11,943
======= =======
5) Non-recurring Expenses
During the first quarter of 1999, the Company recorded non- recurring
expenses in the amount of $750,000 principally related to severance
benefits for terminated employees at the Cooking Systems Group and the
International Distribution Division.
During the fourth quarter of 1998, the Cooking Systems Group recorded
reserves associated with the discontinuance of certain product lines.
Activity associated with these reserves during the fiscal first quarter of
1999 was as follows:
Balance January 2, 1999 ................. $ 1,842
Loss on sale and disposal
of inventories ........................ (179)
-------
Balance April 3, 1999 ................... $ 1,663
=======
The Company anticipates all actions associated with the exit to be
completed during the second quarter of 1999.
- 5 -
<PAGE>
6) Segment Information
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.
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.
The following table summarizes the results of operations for the Company's
business segments:
<TABLE>
<CAPTION>
Cooking International
Systems Specialty International Corporate
Group Equipment Distribution and Other(1) Eliminations(2) Total
------- ------------ ------------- ------------ --------------- -----
<S> <C> <C> <C> <C> <C> <C>
First Quarter 1999
Net sales ........ $ 25,441 $ 1,191 $ 9,215 $ 243 $ (3,649) $ 32,441
Operating
income (loss) .. 2,587 (242) (590) (769) -- 986
Non-recurring
expense ........ 496 -- 254 -- -- 750
Depreciation
expense ........ 551 106 73 50 -- 780
Capital
expenditures ... 233 30 25 10 -- 298
Total assets ..... 46,394 10,352 22,202 27,425 (9,282) 97,091
Long-lived assets 17,227 3,885 1,336 22,266 -- 44,714
First Quarter 1998
Net sales ........ $ 22,667 $ 1,365 $ 9,281 $ 878 $ (3,090) $ 31,101
Operating
income (loss) ...... 2,285 140 (359) (445) -- 1,621
Depreciation
expense ............ 376 75 67 38 -- 556
Capital
expenditures ... 939 72 129 39 -- 1,179
Total assets ..... 47,785 9,185 22,672 19,532 (5,149) 99,174
Long-lived assets 16,168 4,017 1,254 21,037 -- 42,476
</TABLE>
Net sales by major geographic region were as follows:
April 3, 1999 April 4, 1998
------------- -------------
United States ...................... $23,059 $21,499
------- -------
Asia ............................. 2,896 3,820
Europe and Middle East ........... 3,053 3,130
Latin America .................... 2,184 1,690
Canada ........................... 1,249 962
------- -------
Total International ................ 9,382 9,602
------- -------
Net Sales ........................ $32,441 $31,101
======= =======
(1) Includes sales of discontinued product lines in addition to corporate
and other general Company assets and operations.
(2) Includes elimination of intercompany sales and receivables.
Intercompany sale transactions are predominantly from the Cooking
Systems Group to the International Distribution Division.
- 6 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (Unaudited).
Informational Note
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.
Three Months Ended
-------------------------------------------
April 3, 1999 April 4, 1998
----------------- -----------------
Sales Percent Sales Percent
----- ------- ----- -------
Business Divisions
Conveyor oven
equipment ................... $ 11,435 35.2% $ 9,541 30.7%
Counterline cooking
equipment ................... 3,532 10.9% 3,606 11.6%
Core cooking
equipment ................... 10,474 32.3% 9,520 30.6%
-------- ----- -------- -----
Total Cooking Systems
Group .................... 25,441 78.4% 22,667 72.9%
International specialty
equipment ................... 1,191 3.7% 1,365 4.4%
International distribution(1) 9,215 28.4% 9,281 29.8%
-------- ----- -------- -----
Total international
divisions ............ 10,406 32.1% 10,646 34.2%
Intercompany
sales(2) .................... (3,649) (11.2%) (3,090) (9.9%)
Other ....................... 243 .7% 878 2.8%
-------- ----- -------- -----
Total ...................... $ 32,441 100.0% $ 31,101 100.0%
======== ===== ======== =====
(1) Consists of sales of products manufactured by Middleby and products
manufactured by third parties.
(2) Consists of sales to the Company's international distribution division from
the Company's other business divisions.
- 7 -
<PAGE>
Results of Operations
The following table sets forth certain consolidated statements of earnings items
as a percentage of net sales for the periods.
Three Months Ended
-----------------------------
April 3, 1999 April 4, 1998
------------- -------------
Net sales ...................................... 100.0% 100.0%
Cost of sales .................................. 70.3% 69.7%
----- -----
Gross profit ................................. 29.7% 30.3%
Selling, general and administrative
expenses ....................................... 24.4% 25.1%
Non-recurring expense .......................... 2.3% --
----- -----
Income from operations ....................... 3.0% 5.2%
Interest expense and deferred financing
amortization,net ......................... 2.1% 2.4%
Other (income) expense,net ..................... 0.8% 0.4%
----- -----
Earnings before income taxes ................. 0.1% 2.5%
Provision for income taxes ..................... 1.2% 0.8%
----- -----
Net (loss) earnings .......................... (1.1%) 1.7%
===== =====
Three Months Ended April 3, 1999 Compared to Three Months Ended April 4, 1998
NET SALES. Net sales in the three-month period ended April 3, 1999 increased 4%
to $32.4 million as compared to $31.1 million in the three-month period ended
April 4, 1998.
Sales of the Cooking Systems Group for the three-month period ended April 3,
1999 increased 12% to $25.4 million from $22.7 million in the prior year. Sales
of conveyor oven equipment increased 20% due to improved sales to major
restaurant chains. Core cooking equipment sales increased 10% with continued
success of new product introductions and market penetration, while sales of
counterline equipment decreased slightly.
Sales of the international divisions decreased 2% to $10.4 million from $10.6
million in the previous year period. Decreased restaurant, hotel and resort
development led to a 13% decline in net sales of the International Specialty
Equipment Division. Net sales of the International Distribution Division
declined by 1% as lower sales in Asia and Europe were partly offset be increased
sales into Latin America and Canada.
GROSS PROFIT. Gross profit increased 2% to $9.6 million from $9.4 million in the
prior year period on increased sales volume. As a percentage of sales, gross
margins decreased from 30.3% to 29.7%, primarily as a result of lower volume and
unfavorable sales mix at the International Specialty Equipment division. Also,
margins for the International Distribution Division were slightly lower due to
lesser project business, which carries a higher margin.
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<PAGE>
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 1% to $7.9 million as compared to $7.8 million
in the prior year period. As a percentage of net sales, selling, general and
administrative expenses decreased to 24.3% as compared to 25.1%. The net change
from the prior year reflects increased expenses at the domestic operations due
in part to the increased sales volumes, offset by decreased expenses at the
international operations resulting from the effect of cost reduction
initiatives.
NON-RECURRING EXPENSES. Non-recurring expenses of approximately $0.8 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. Employee headcount has been reduced to 883 at the end of
the quarter. This compares to 994 employees at the fiscal year end of 1998 and
1,099 at the end of the fiscal 1998 third quarter.
INCOME FROM OPERATIONS. Income from operations decreased to $1.0 million from
$1.6 million in the prior year, primarily as a result of the non-recurring
expenses incurred during the quarter.
NON-OPERATING EXPENSES. Non-operating expenses increased to $0.9 million from
$0.8 million in the prior year. Interest expense of $0.7 million remained
consistent with the prior year period, while other expense increased to $0.2
million as compared to $0.1 million in the prior year period.
INCOME TAXES. A tax provision of $0.4 million 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.
Financial Condition and Liquidity
Total cash and cash equivalents decreased by $3.4 million to $3.3 million at
April 3, 1999 from $6.8 million at January 2, 1999. Net borrowings declined
slightly from $27.8 million at January 2, 1999 to $27.6 million at April 3,
1999. The overall use of liquidity was primarily to fund operating activities of
$2.9 million.
OPERATING ACTIVITIES. Net cash provided by operating activities before changes
in assets and liabilities was $0.9 million in the three months ended April 3,
1999 as compared to $1.5 million in the prior year period. This decline is due
to the lower net earnings. Net cash used by operating activities after changes
in assets and liabilities was $2.9 million as compared to $6.8 million in the
prior year period. Accounts receivables increased $0.5 million due to the timing
of sales and collections at the end of the respective periods. Inventories
increased by $0.3 million as a result of increased order levels at the Cooking
Systems Group as compared to
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<PAGE>
year-end, offset in part by lower inventories at the International Distribution
Division as a result of focused reduction efforts. Changes in prepaid assets and
other assets resulted in net cash utilization of $1.1 million principally due to
the funding of retirement benefit liabilities. Accounts payable decreased $1.7
million as a result of payments to vendors which had been extended at year end,
in addition to normal fluctuations in payables due to the timing of purchases
and disbursements. Accrued expenses and other liabilities decreased $1.0 million
primarily due to payments under annual customer rebate programs and the funding
of other payroll related obligations
INVESTING ACTIVITIES. During the first quarter of 1999, the Company had capital
expenditures of $0.3 million primarily to enhance manufacturing capabilities and
upgrade computer systems at the Cooking Systems Group.
FINANCING ACTIVITIES. Net borrowings under financing arrangements decreased from
$27.8 million to $27.6 million during the quarter. This net change is primarily
a result of a decrease in the relative value of borrowings in foreign currencies
due to fluctuation in exchange rates.
During the quarter, 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. At the end of the quarter, 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.
Year 2000 Compliance
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.
The Company has undertaken a review of its information technology ("IT")
systems. The Company is completing a strategy to implement new IT systems at its
International Distribution Division to enhance its current transaction
processing and information reporting capabilities. These systems are Year 2000
compliant.
- 10 -
<PAGE>
In addition, the Company has completed, or is in the process of completing,
upgrades to existing IT systems at all other business units to make these
systems Year 2000 compliant. These systems projects are currently on schedule
for completion prior to July 30, 1999. If these systems projects are not
successful, the Company will develop contingency plans. Nevertheless, failure to
complete these systems projects prior to year-end could result in a significant
disruption of the Company's ability to transact business with its major
customers and suppliers.
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.
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.
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 $0.2 million. The Company does not anticipate that future costs to
address the Year 2000 issue will have a material effect on its financial
condition.
The foregoing is a Year 2000 readiness disclosure entitled to protection as
provided in the Year 2000 Information and Readiness Disclosure Act.
- 11 -
<PAGE>
International Exposure
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 has 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 sales and earnings. 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.
Item 3. Quantitative And Qualitative Disclosures About Market Risk
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:
Fixed Variable
Rate Rate
Debt Debt
------- -------
(dollars in thousands)
1999 $ 1,821 $ --
2000 10,096 --
2001 4,981 3,185
2002 5,000 --
2003 2,500 --
------- -------
$24,398 $ 3,185
======= =======
Fixed rate debt is comprised of a $15.0 million senior note and $9.4 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 borrowings under the Company's $10.0
million revolving credit line, which includes a $2.2 million yen denominated
loan and a $1.0 million Spanish-peseta denominated loan. Interest under the
revolving credit facility is assessed based upon the bank's reference rate in
each respective country. The average interest rate assessed to the yen and
peseta denominated loans during the first quarter of 1999 were 1.2% and 4.6%,
respectively.
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<PAGE>
PART II. OTHER INFORMATION
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 April 3, 1999,
except as follows:
Item 4. Submission of Matters to a Vote of Security Holders
On May 13, 1999, the Company held its 1999 Annual Meeting of Stockholders. The
following persons were elected as directors to hold office until the 2000 Annual
Meeting of Stockholders: Robert R. Henry, A. Don Lummus, John R. Miller III,
Philip G. Putnam, David P. Riley, Sabin C. Streeter, Joseph G. Tompkins, William
F. Whitman, Jr., Laura B. Whitman and Robert R. Yohe. The number of shares cast
for, withheld and abstained with respect to each of the nominees were as
follows:
Nominee For Withheld Abstained
------- --- -------- ---------
Henry 9,318,867 21,000 0
Lummus 9,318,767 21,100 0
Miller 9,318,867 21,000 0
Putnam 9,318,867 21,000 0
Riley 9,307,056 32,811 0
Streeter 9,318,867 21,000 0
Tompkins 9,318,567 21,300 0
Whitman, W. 9,316,967 22,900 0
Whitman, L. 9,312,512 27,355 0
Yohe 9,318,367 21,500 0
The stockholders also voted to approve the ratification of the selection of
Arthur Andersen LLP as independent auditors for the Company for the fiscal year
ending January 1, 2000. 9,303,342 shares were cast for such election, 35,225
shares were cast against such election, and 1,300 shares abstained. There were
no broker non-votes with respect to these three proposals.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits - The following Exhibits are filed herewith:
Exhibit (27) - Financial Data Schedule (EDGAR only)
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<PAGE>
SIGNATURES
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.
THE MIDDLEBY CORPORATION
(Registrant)
Date: May 14, 1999 By: /s/ John J. Hastings
------------------------ -------------------------------
John J. Hastings, Executive
Vice President, Chief
Financial Officer and
Secretary
(Principal Financial and
Accounting Officer)
- 14 -
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