The Middleby Corporation (MIDD) Q4 2014 earnings summary

Executive summary

• FY2014 net sales rose 14.5% to $1.637B; excluding acquisitions, sales increased 8.4%. Net earnings reached $193.3M and diluted EPS was $3.40.

• Operating income rose to $300.4M, with operating margin at 18.4% versus 17.1% in FY2013; operating cash flow increased to $233.9M.

Financial highlights

• Net sales were $1,636.5M, up $207.8M YoY; acquisitions contributed $87.3M, while organic growth was $120.5M, or 8.4%.

• Gross profit increased to $640.6M from $550.0M; gross margin improved to 39.1% from 38.5%.

• Net earnings rose to $193.3M from $153.9M; diluted EPS increased to $3.40 from $2.74.

• Operating cash flow was $233.9M versus $146.2M; cash and equivalents ended the year at $43.9M.

Outlook and guidance

• Backlog at Jan. 3, 2015: Commercial Foodservice $60.6M, Food Processing $67.7M and Residential Kitchen $29.7M; all expected to be filled during 2015.

• Management expected operating cash flow and borrowing capacity to fund working capital, capital expenditures and debt amortization for the foreseeable future.

• Demand drivers cited included restaurant-chain expansion, equipment upgrades, food-processing efficiency and automation, and continuing demand for convenience foods.