The Middleby Corporation (MIDD) Q4 2016 earnings summary

Executive summary

• FY 2016 net sales rose 24.2% to $2.268B, driven largely by acquisitions; organic sales growth was 3.9% excluding foreign-exchange effects. Net earnings increased to $284.2M from $191.6M.

• Operating income reached $446.2M, up from $302.6M; reported operating margin increased to 19.6% from 16.5%.

Financial highlights

• Gross profit rose to $901.2M from $706.5M; gross margin expanded to 39.7% from 38.7%.

• Diluted EPS was $4.98 versus $3.36; cash from operations increased to $294.1M from $249.6M.

• Cash and cash equivalents were $68.5M at year-end; total debt was $732.1M, down from $766.1M.

Outlook and guidance

• Year-end backlog: Commercial Foodservice $77.7M, Food Processing $115.9M and Residential Kitchen $44.2M; all was expected to be filled during 2017.

• Management expected operating cash flow and available borrowings to meet working capital, capital expenditure and debt-amortization needs for the foreseeable future.

• Food Processing demand was supported by strong incoming orders and customers upgrading facilities and expanding capacity; international foodservice growth reflected favorable conditions and local chain expansion.