The Middleby Corporation (MIDD) Q4 2018 earnings summary

Executive summary

• FY2018 net sales rose 16.6% to $2.723B, driven primarily by acquisitions; excluding acquisitions, FX and ASC 606, sales declined 0.8%.

• Net earnings were $317.2M and diluted EPS was $5.70; reported operating income increased to $446.0M, while adjusted operating margin declined to 17.1% from 19.0%.

Financial highlights

• Net sales were $2,722.9M vs. $2,335.5M; gross profit was $1,004.1M vs. $912.7M; operating income was $446.0M vs. $378.6M.

• Net earnings were $317.2M vs. $298.1M; diluted EPS was $5.70 vs. $5.26.

• Operating cash flow was $368.9M vs. $304.5M; cash and cash equivalents ended the year at $71.7M.

Outlook and guidance

• Commercial Foodservice backlog was $134.5M, with nearly all expected to ship in 2019; Food Processing backlog was $103.5M and Residential Kitchen backlog was $47.8M, all expected to ship in 2019.

• Management expected operating cash flows and borrowing availability from current lenders to fund working capital, capital expenditures and debt amortization for the foreseeable future.

• Restructuring actions were expected to yield annual savings of $10.0M in Commercial Foodservice and $4.0M in Food Processing; Residential Kitchen initiatives were expected to generate $20.0M annual savings.