SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 SEPTEMBER 1, 1995 -------------------------- Date of Report (Date of Earliest Event Reported) Commission File No. 1-9973 THE MIDDLEBY CORPORATION ----------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Delaware 36-3352497 -------------------------- ------------------------------------- (State of Incorporation) (IRS Employer Identification Number) 1400 Toastmaster Drive Elgin, Illinois 60120-9274 -------------------------- (Address of Principal Executive Offices) Registrant's Telephone Number, Including Area Code: (708) 741-3300 Item 5. OTHER EVENTS As a result of the Hussmann Corporation Foodservice Equipment Group acquisition in 1989, the subsequent disposition of related assets, and the successful conclusion in 1993 of the lawsuit against Whitman Corporation, the seller of the Hussmann Corporation Foodservice Equipment Group, management of the Company has received and answered numerous questions related to the accounting for the above-mentioned transactions that occurred from 1989 to 1993. These questions have come from shareholders, investment analysts, potential investors and others. To assist current and future shareholders of the Company to better understand the history of the Company and to better analyze the comparative financial statements and current results of operations, management has prepared the following unaudited pro forma financial information which basically assumes that an adjusted price was originally paid for the Hussmann Corporation Foodservice Equipment Group in 1989 and assumes that the disposition of related assets and integration of facilities occurred in 1989. The unaudited pro forma financial information attached hereto as Exhibit (99) should be read in conjunction with the historical audited financial statements of the Company and Annual Reports on Form 10-K filed with the Securities and Exchange Commission. Item 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibit (99) Unaudited Pro Forma Financial Information SIGNATURE PAGE 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 hereunto duly authorized. THE MIDDLEBY CORPORATION By: /s/ John J. Hastings ----------------------------------- John J. Hastings Executive Vice President, Chief Financial Officer, Secretary and Treasurer Dated: September 1, 1995
EXHIBIT (99) UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE MIDDLEBY CORPORATION INDEX
PAGE Background Information............................................. 1 Report of Independent Pubic Accountants............................ 2 Historical As Reported Condensed Consolidated Statements of Earnings for Fiscal Years 1990 through 1994 ................... 3 Pro Forma condensed Consolidated Statements of Earnings for Fiscal Years 1990 through 1993 (Unaudited) ................... 3 Pro Forma Condensed Consolidated Statement of Earnings for the Fiscal Year 1990 (Unaudited)...................................... 4 Pro Forma Condensed Consolidated Statement of Earnings for the Fiscal Year 1991 (Unaudited)...................................... 5 Pro Forma Condensed Consolidated Statement of Earnings for the Fiscal Year 1992 (Unaudited)...................................... 6 Pro Forma Condensed Consolidated Statement of Earnings for the Fiscal Year 1993 (Unaudited)...................................... 7 Notes to Pro Forma Financial Information........................... 8-9 EXHIBIT (99). BACKGROUND INFORMATION The following unaudited pro forma financial information consists of Pro Forma Condensed Consolidated Statements of Earnings for fiscal years 1990 through 1993. The audited Reported Condensed Statements of Earnings for fiscal years 1990 through 1994 are also included for comparative purposes. Such statements have been prepared to illustrate the estimated effects of (i) the elimination of certain nonrecurring transactions, principally related to the Hussmann asset dispositions and facility closures, and (ii) reduction of interest expense resulting from reflecting the proceeds from the September 1993 Hussmann Corporation litigation settlement as if some of the proceeds had been received during fiscal year 1989 and had been used to reduce outstanding debt. The unaudited pro forma financial information does not purport to represent what the Company's results of operations would actually have been if such transactions had occurred on such date. In addition, the unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of future operations of the Company, and should be read in conjunction with the historical audited financial statements of the Company and notes thereto. 1 EXHIBIT (99). REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders and Board of Directors of The Middleby Corporation: We have reviewed the pro forma adjustments reflecting transactions described in Notes A to G and the application of those adjsutments to the historical amounts in the accompanying Middleby Corporation Pro Forma Condensed Consolidated Statements of Earnings for the fiscal years ended January 1, 1994, January 2, 1993, December 28, 1991 and December 29, 1990. The historical condensed financial statements are derived from the historical consolidated financial statements of The Middleby Corporation which were audited by us. Such pro forma adjustments are based on management's assumptions as described in Notes A to G to the pro forma statements. Our review was conducted in accordance with standards established by the American Institute of Certified Public Accountants. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's assumptions, the pro forma adjustments and the application of those adjustments to historical information. Accordingly, we do not express such an opinion. The objective of this pro forma information is to show what the significant effects on the historical information might have been had the transactions occurred at an earlier date. However, the pro forma condensed consolidated financial statements are not necessarily indicative of the results of operations or related effects on financial position that would have been attained had the above-mentioned transactions actually occurred earlier. Based on our review, nothing came to our attention that caused us to believe that management's assumptions do not provide a reasonable basis for presenting the significant effects directly attributable to the above-mentioned transactions described in Notes A to G to the pro forma statements, that the related pro forma adjustments do not give appropriate effect to those assumptions, or that the pro forma columns do not reflect the proper application of those adjustments to the historical financial statement amounts in the Pro Forma Condensed Consolidated Statements of Earnings for the fiscal years ended January 1, 1994, January 2, 1993, December 28, 1991, and December 29, 1990. Arthur Andersen LLP Chicago, Illinois July 26, 1995 2 EXHIBIT (99). THE MIDDLEBY CORPORATION HISTORICAL AS REPORTED AND PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In Thousands Except for Per Share Data)
Historical As Reported For the Fiscal Years --------------------------------------------------------------------------- 1990 1991 1992 1993 1994 --------------------------------------------------------------------------- Net Sales $113,016 $102,518 $109,219 $119,355 $129,967 Cost of Sales 79,089 72,297 76,982 89,627 93,713 --------------------------------------------------------------------------- Gross Margin 33,927 30,221 32,237 29,728 36,254 Selling and Distribution Expenses 15,867 16,699 15,886 18,659 17,894 General and Administrative Expenses 9,524 9,878 11,049 8,985 9,581 Restructuring Charge - 2,550 - 600 - --------------------------------------------------------------------------- Income from Operations 8,536 1,094 5,302 1,484 8,779 Unusual Income Item - - - (7,716) - Interest Expense 8,253 7,356 6,114 4,926 4,080 Other Expense, net 1,176 1,212 1,053 643 786 --------------------------------------------------------------------------- Earnings (Loss) Before Income Taxes (893) (7,474) (1,865) 3,631 3,913 Provision for Income Taxes 85 36 29 199 863 --------------------------------------------------------------------------- Net (Loss) Earnings ($978) ($7,510) ($1,894) $3,432 $3,050 --------------------------------------------------------------------------- --------------------------------------------------------------------------- (Loss) Earnings Per Common and Common Equivalent Share- Primary ($0.12) ($0.90) ($0.23) $0.41 $0.36 Fully Diluted ($0.12) ($0.90) ($0.23) $0.41 $0.36 --------------------------------------------------------------------------- --------------------------------------------------------------------------- See Notes to Pro Forma Financial Information 3
Pro Forma Historical As For the Fiscal Years Reported ------------------------------------------------------------ --------------- 1990 1991 1992 1993 1994 ------------------------------------------------------------ --------------- Net Sales $87,940 $83,178 $97,924 $119,355 $129,967 Cost of Sales 60,660 58,222 69,543 89,627 93,713 ------------------------------------------------------------ --------------- Gross Margin 27,280 24,956 28,381 29,728 36,254 Selling and Distribution Expenses 11,964 13,334 14,182 18,659 17,894 General and Administrative Expenses 7,764 7,980 10,178 8,985 9,581 Restructuring Charge - - - 600 - ------------------------------------------------------------ --------------- Income from Operations 7,552 3,642 4,021 1,484 8,779 Interest Expense 4,388 3,405 2,764 2,981 4,080 Other Expense, net 313 311 240 93 786 ------------------------------------------------------------ --------------- Earnings (Loss) Before Income Taxes 2,851 (74) 1,017 (1,590) 3,913 Provision for Income Taxes 974 86 263 28 863 ------------------------------------------------------------ --------------- Net (Loss) Earnings $1,877 ($160) $754 ($1,618) $3,050 ------------------------------------------------------------ --------------- ------------------------------------------------------------ --------------- (Loss) Earnings Per Common and Common Equivalent Share- Primary $0.23 ($0.02) $0.09 ($0.19) $0.36 Fully Diluted $0.23 ($0.02) $0.09 ($0.19) $0.36 ------------------------------------------------------------ --------------- ------------------------------------------------------------ --------------- EXHIBIT (99). THE MIDDLEBY CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS For the Fiscal Year 1990 (Unaudited) (In Thousands Except for Per Share Data) See Notes to Pro Forma Financial Information 4
Historical As Pro Forma Reported Adjustments Pro Forma ------------- ----------- --------- Net Sales $113,016 ($25,076) (B,C,D) $87,940 Cost of Sales 79,089 (18,429) (B,C,D,E) 60,660 ------------- ----------- --------- Gross Margin 33,927 (6,647) 27,280 Selling and Distribution Expenses 15,867 (3,903) (B,C,D) 11,964 General and Administrative Expenses 9,524 (1,760) (B,C,D) 7,764 ------------- ----------- --------- Income from Operations 8,536 (984) 7,552 Interest Expense 8,253 (3,865) (A,B,C,D) 4,388 Other Expense, net 1,176 (863) (A,B,D) 313 ------------- ----------- --------- Earnings/(Loss) Before Income Taxes (893) 3,744 2,851 Provision for Income Taxes 85 889 (G) 974 ------------- ----------- --------- Net (Loss) Earnings ($978) $2,855 $1,877 ------------- ----------- --------- ------------- ----------- --------- (Loss) Earnings Per Common and Common Equivalent Share- Primary ($0.12) $0.34 $0.23 Fully Diluted ($0.12) $0.34 $0.23 ------------- ----------- --------- ------------- ----------- --------- EXHIBIT (99). THE MIDDLEBY CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS For the Fiscal Year 1991 (Unaudited) (In Thousands Except for Per Share Data) See Notes to Pro Forma Financial Information 5
Historical As Pro Forma Reported Adjustments Pro Forma ------------- ----------- --------- Net Sales $102,518 ($19,340) (B,C,D) $83,178 Cost of Sales 72,297 (14,075) (B,C,D,E) 58,222 ------------- ----------- --------- Gross Margin 30,221 (5,265) 24,956 Selling and Distribution Expenses 16,699 (3,365) (B,C,D) 13,334 General and Administrative Expenses 9,878 (1,898) (B,C,D) 7,980 Restructuring Charge 2,550 (2,550) (F) - ------------- ----------- --------- Income from Operations 1,094 2,548 3,642 Interest Expense 7,356 (3,951) (A,C,D) 3,405 Other Expense, net 1,212 (901) (A,D) 311 ------------- ----------- --------- (Loss) Earnings Before Income Taxes (7,474) 7,400 (74) Provision for Income Taxes 36 50 (G) 86 ------------- ----------- --------- Net (Loss) Earnings ($7,510) $7,350 ($160) ------------- ----------- --------- ------------- ----------- --------- (Loss) Earnings Per Common and Common Equivalent Share- Primary ($0.90) $0.88 ($0.02) Fully Diluted ($0.90) $0.88 ($0.02) ------------- ----------- --------- ------------- ----------- --------- EXHIBIT (99). THE MIDDLEBY CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS For the Fiscal Year 1992 (Unaudited) (In Thousands Except for Per Share Data) See Notes to Pro Forma Financial Information 6
Historical As Pro Forma Reported Adjustments Pro Forma ------------- ----------- --------- Net Sales $109,219 ($11,295) (C,D) $97,924 Cost of Sales 76,982 (7,439) (C,D,E) 69,543 ------------- ----------- --------- Gross Margin 32,237 (3,856) 28,381 Selling and Distribution Expenses 15,886 (1,704) (C,D) 14,182 General and Administrative Expenses 11,049 (871) (C,D) 10,178 ------------- ----------- --------- Income from Operations 5,302 (1,281) 4,021 Interest Expense 6,114 (3,350) (A,D) 2,764 Other Expense, net 1,053 (813) (A,C,D) 240 ------------- ----------- --------- (Loss) Earnings Before Income Taxes (1,865) 2,882 1,017 Provision for Income Taxes 29 234 (G) 263 ------------- ----------- --------- Net (Loss) Earnings ($1,894) $2,648 $754 ------------- ----------- --------- ------------- ----------- --------- (Loss) Earnings Per Common and Common Equivalent Share- Primary ($0.23) $0.32 $0.09 Fully Diluted ($0.23) $0.32 $0.09 ------------- ----------- --------- ------------- ----------- --------- EXHIBIT (99). THE MIDDLEBY CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS For the Fiscal Year 1993 (Unaudited) (In Thousands Except for Per Share Data) See Notes to Pro Forma Financial Information 7
Historical As Pro Forma Reported Adjustments Pro Forma ------------- ----------- --------- Net Sales $119,355 $- $119,355 Cost of Sales 89,627 - 89,627 ------------- ----------- --------- Gross Margin 29,728 - 29,728 Selling and Distribution Expenses 18,659 - 18,659 General and Administrative Expenses 8,985 - 8,985 Restructuring Charge 600 - 600 ------------- ----------- --------- Income from Operations 1,484 - 1,484 Unusual Income Item (7,716) 7,716 (A) - Interest Expense 4,926 (1,945) (A) 2,981 Other Expense, net 643 (550) (A) 93 ------------- ----------- --------- Earnings/(Loss) Before Income Taxes 3,631 (5,221) (1,590) Provision for Income Taxes 199 (171) (G) 28 ------------- ----------- --------- Net (Loss) Earnings $3,432 ($5,050) ($1,618) ------------- ----------- --------- ------------- ----------- --------- (Loss) Earnings Per Common and Common Equivalent Share- Primary $0.41 ($0.60) ($0.19) Fully Diluted $0.41 ($0.60) ($0.19) ------------- ----------- --------- ------------- ----------- --------- EXHIBIT (99). THE MIDDLEBY CORPORATION NOTES TO PRO FORMA FINANCIAL INFORMATION (Unaudited) (In Thousands) The following is a summary of adjustments reflected in the Pro Forma Condensed Consolidated Statements of Earnings: (A) The September 1993 litigation settlement of $19,500, related to the acquisition of the Hussmann Corporation Foodservice Equipment Group, is assumed to have occurred in 1989 and is effectively treated as a reduction to the original purchase price. As a result, on a pro forma basis, the gain of $7,716 recorded in 1993 has been eliminated. In addition, it is assumed that the proceeds from the settlement were used to reduce outstanding debt, thus reducing interest expense. This includes the use of a lower interest rate as the Company would not have incurred the higher cost "Tranche B" debt. The following table sets forth the Statement of Earnings adjustments by year related to this event: (B) The May 1991 closure of the Montreal manufacturing facility is reflected as if it occurred at the time of its acquisition from the Hussmann Corporation Foodservice Equipment Group in 1989. The following table sets forth the Statement of Earnings adjustments related to this event:
For the Fiscal Years --------------------------------------------------- 1990 1991 1992 1993 --------------------------------------------------- Interest Expense Reduction ($2,333) ($2,372) ($2,319) ($1,945) Litigation Settlement Gain Reversal - - - 7,716 Goodwill Amortization Reduction (817) (833) (819) (550) --------------------------------------------------- Increase/(Decrease) in Earnings Before Income Taxes $3,150 $3,205 $3,138 ($5,221) --------------------------------------------------- --------------------------------------------------- (C) The February 1992 closure of the United Kingdom distribution company is reflected as if it occurred at the time of its acquisition from the Hussmann Corporation Foodservice Equipment Group in 1989. The following table sets forth the Statement of Earnings adjustments related to this event:
For the Fiscal Years --------------------------------- 1990 1991 --------------------------------- Net Sales Reduction ($4,086) ($1,004) Cost of Sales Reduction (3,523) (917) --------------------------------- Decrease in Gross Margin (563) (87) Selling and Distribution Expenses Reduction (575) (350) General and Administrative Expenses Reduction (315) (237) --------------------------------- Increase in Income from Operations 327 500 Other Expense Reduction (6) - --------------------------------- Increase in Earnings Before Income Taxes $333 $500 --------------------------------- --------------------------------- 8
For the Fiscal Years ----------------------------------------------- 1990 1991 1992 ----------------------------------------------- Net Sales Reduction ($2,383) ($1,490) ($163) Cost of Sales Reduction (1,741) (1,184) (266) ----------------------------------------------- Increase/(Decrease) in Gross Margin (642) (306) 103 Selling and Distribution Expenses Reduction (737) (536) (32) General and Administrative Expenses Reduction (241) (461) (48) ----------------------------------------------- Increase in Income from Operations 336 691 183 Interest Expense Increase 23 2 - Other Expense Increase - - 5 ----------------------------------------------- Increase in Earnings Before Income Taxes $313 $689 $178 ----------------------------------------------- ----------------------------------------------- EXHIBIT (99). THE MIDDLEBY CORPORATION NOTES TO PRO FORMA FINANCIAL INFORMATION (Unaudited) (In Thousands) (D) The August 1992 sale of the Seco division is reflected as if it occurred at the time of its acquisition from the Hussmann Corporation Foodservice Equipment Group in 1989. In addition, it is assumed that the proceeds of $11,500 from the sale of the Seco division were used to reduce outstanding debt, which has the effect of reducing interest expense in fiscal years 1990, 1991 and 1992. The following table sets forth the Statement of Earnings adjustments by year related to this event: (E) The 1990 and 1991 effects on earnings due to using the last-in, first-out LIFO inventory cost method have been eliminated. These effects were a $117 decrease in earnings in 1990 and a $41 increase in earnings in 1991. The 1992 nonrecurring gain of $689 recorded to reflect the change in inventory valuation methods from LIFO to first-in, first-out (FIFO) has been eliminated. (F) The 1991 nonrecurring restructuring charge of $2,550 related to the consolidation of the Middleby Marshall operations into the Toastmaster facility, and the closure of the Montreal manufacturing facility has been reversed. (G) The provision for income taxes has been recalculated to reflect the effects of the pro forma adjustments. (H) The Company's 1990, 1991, 1992, 1993 and 1994 fiscal years ended on December 29, 1990, December 28, 1991, January 2, 1993, January 1, 1994 and December 31, 1994, respectively. 9
For the Fiscal Years ------------------------------------------------- 1990 1991 1992 ------------------------------------------------- Net Sales Reduction ($18,607) ($16,846) ($11,132) Cost of Sales Reduction (13,048) (12,015) (7,862) ------------------------------------------------- Decrease in Gross Margin (5,559) (4,831) (3,270) Selling and Distribution Expenses Reduction (2,591) (2,479) (1,672) General and Administrative Expenses Reduction (1,204) (1,200) (823) ------------------------------------------------- Decrease in Income from Operations (1,764) (1,152) (775) Interest Expense Reduction (1,555) (1,581) (1,031) Other Expense (Reduction)/Increase (40) (68) 1 ------------------------------------------------- (Decrease)/Increase in Earnings Before Income Taxes ($169) $497 $255 ------------------------------------------------- -------------------------------------------------