Middleby Corp. (MIDD, Financial) filed Quarterly Report for the period ended 2010-10-02.
Middleby Corp. has a market cap of $1.4 billion; its shares were traded at around $75.62 with a P/E ratio of 20.8 and P/S ratio of 2.1. Middleby Corp. had an annual average earning growth of 35.3% over the past 10 years. GuruFocus rated Middleby Corp. the business predictability rank of 4.5-star.MIDD is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, NWQ Managers of NWQ Investment Management Co, RS Investment Management, Robert Olstein of Olstein Financial Alert Fund, Mario Gabelli of GAMCO Investors.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Combined selling, general, and administrative expenses increased from $109.0 million in the nine-month period ended October 3, 2009 to $115.4 million in the nine-month period ended October 2, 2010. As a percentage of net sales, operating expenses increased from 22.1% in the nine-month period ended October 3, 2009 to 22.6% in the nine-month period ended October 2, 2010. Selling expenses increased from $49.3 million in the nine-month period ended October 3, 2009 to $54.4 million in the nine-month period ended October 2, 2010. Selling expenses reflect increased costs of $1.9 million associated with recent acquisitions, $1.2 million associated with marketing related expenses and $1.2 million related to compensation expenses. General and administrative expenses increased from $59.7 million in the nine-month period ended October 3, 2009 to $61.0 million in the nine-month period ended October 2, 2010. General and administrative expenses reflect an increase of $1.4 million of costs associated with the acquired operations of CookTek, Anets, Doyon, PerfectFry and Cozzini, and increased incentive compensation of $8.2 million. The prior year nine month period included $4.9 million of non-recurring charges associated with manufacturing facility consolidation initiatives.
During the nine months ended October 2, 2010, cash and cash equivalents decreased by $2.4 million to $6.0 million at October 2, 2010 from $8.4 million at January 2, 2010. Net borrowings decreased from $275.6 million at January 2, 2010 to $243.6 million at October 2, 2010.
During the nine months ended October 2, 2010, working capital levels changed due to normal business fluctuations, including the impact of increased seasonal working capital needs. These changes in working capital levels included a $19.3 million increase in accounts receivable, a $5.6 million increase in inventory and a $9.3 million decrease in accounts payable. Prepaid and other assets increased $2.0 million. Accrued expenses and other non-current liabilities increased by $6.9 million.
INVESTING ACTIVITIES. During the nine months ended October 2, 2010, net cash used in investing activities amounted to $28.8 million. Investing activities include the third quarter funding of $4.6 million for the acquisition of PerfectFry and $17.4 million for the acquisition of Cozzini. Additionally, the company had deferred payments of $3.1 related to the Giga, CookTek, and Anets acquisitions completed in prior years. During the third quarter of 2010, the company finalized the working capital provision relating to the Doyon acquisition, which resulted in an additional payment of $0.6 million to the sellers. The company also had capital expenditures of $3.0 million primarily associated with additions and upgrades of production equipment.
FINANCING ACTIVITIES. Net cash flows used in financing activities amounted to $39.8 million during the nine months ended October 2, 2010. The company s borrowing activities included $30.1 million of repayments under its $497.8 million revolving credit faciltiy and $1.5 million of repayments of foreign borrowings. The net borrowings, along with cash generated from operating activities, were utilized to fund acquisition activities and capital expenditures. The company also used $8.8 million to repurchase 161,066 shares of its common stock under a stock repurchase program.
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Middleby Corp. has a market cap of $1.4 billion; its shares were traded at around $75.62 with a P/E ratio of 20.8 and P/S ratio of 2.1. Middleby Corp. had an annual average earning growth of 35.3% over the past 10 years. GuruFocus rated Middleby Corp. the business predictability rank of 4.5-star.MIDD is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, NWQ Managers of NWQ Investment Management Co, RS Investment Management, Robert Olstein of Olstein Financial Alert Fund, Mario Gabelli of GAMCO Investors.
Highlight of Business Operations:
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Combined selling, general, and administrative expenses increased from $34.0 million in the third quarter of 2009 to $38.7 million in the third quarter of 2010. As a percentage of net sales, operating expenses decreased from 22.1% in the third quarter of 2009 to 21.8% in the third quarter of 2010. Selling expenses increased from $16.4 million in the third quarter of 2009 to $17.8 million in the third quarter of 2010. Selling expenses reflect increased costs of $0.7 million associated with acquisitions of Doyon, PerfectFry and Cozzini and $0.3 million associated with commission expense due to higher sales volumes. General and administrative expenses increased from $17.6 million in the third quarter of 2009 to $20.9 million in the third quarter of 2010. General and administrative expenses reflect $0.6 million of costs associated with the recent acquisitions. The current year period also reflects increased incentive compensation of $4.1 million and $0.8 million associated with severance costs recorded during the third quarter associated with headcount reduction initiatives. The prior year period includes $2.5 million of non-recurring charges associated with manufacturing consolidation initiatives.SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Combined selling, general, and administrative expenses increased from $109.0 million in the nine-month period ended October 3, 2009 to $115.4 million in the nine-month period ended October 2, 2010. As a percentage of net sales, operating expenses increased from 22.1% in the nine-month period ended October 3, 2009 to 22.6% in the nine-month period ended October 2, 2010. Selling expenses increased from $49.3 million in the nine-month period ended October 3, 2009 to $54.4 million in the nine-month period ended October 2, 2010. Selling expenses reflect increased costs of $1.9 million associated with recent acquisitions, $1.2 million associated with marketing related expenses and $1.2 million related to compensation expenses. General and administrative expenses increased from $59.7 million in the nine-month period ended October 3, 2009 to $61.0 million in the nine-month period ended October 2, 2010. General and administrative expenses reflect an increase of $1.4 million of costs associated with the acquired operations of CookTek, Anets, Doyon, PerfectFry and Cozzini, and increased incentive compensation of $8.2 million. The prior year nine month period included $4.9 million of non-recurring charges associated with manufacturing facility consolidation initiatives.
During the nine months ended October 2, 2010, cash and cash equivalents decreased by $2.4 million to $6.0 million at October 2, 2010 from $8.4 million at January 2, 2010. Net borrowings decreased from $275.6 million at January 2, 2010 to $243.6 million at October 2, 2010.
During the nine months ended October 2, 2010, working capital levels changed due to normal business fluctuations, including the impact of increased seasonal working capital needs. These changes in working capital levels included a $19.3 million increase in accounts receivable, a $5.6 million increase in inventory and a $9.3 million decrease in accounts payable. Prepaid and other assets increased $2.0 million. Accrued expenses and other non-current liabilities increased by $6.9 million.
INVESTING ACTIVITIES. During the nine months ended October 2, 2010, net cash used in investing activities amounted to $28.8 million. Investing activities include the third quarter funding of $4.6 million for the acquisition of PerfectFry and $17.4 million for the acquisition of Cozzini. Additionally, the company had deferred payments of $3.1 related to the Giga, CookTek, and Anets acquisitions completed in prior years. During the third quarter of 2010, the company finalized the working capital provision relating to the Doyon acquisition, which resulted in an additional payment of $0.6 million to the sellers. The company also had capital expenditures of $3.0 million primarily associated with additions and upgrades of production equipment.
FINANCING ACTIVITIES. Net cash flows used in financing activities amounted to $39.8 million during the nine months ended October 2, 2010. The company s borrowing activities included $30.1 million of repayments under its $497.8 million revolving credit faciltiy and $1.5 million of repayments of foreign borrowings. The net borrowings, along with cash generated from operating activities, were utilized to fund acquisition activities and capital expenditures. The company also used $8.8 million to repurchase 161,066 shares of its common stock under a stock repurchase program.
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