Middleby’s Commercial Foodservice Equipment Group saw second quarter net sales rise by 24% compared with the same period last year, the manufacturer has announced.
The division saw sales increase by 2.3% when acquisition and foreign exchange are excluded– with recent acquisitions including EVO, Cooking Solutions Group, Powerhouse Dynamics, and Ss Brewtech.
Overall, the company reported an increase in gross profit from $250.8 million to $286.5 million, with operating income rising to $139.6 million from $111.3 million in the prior year period.
Timothy FitzGerald, Middleby’s CEO, said, “At the Commercial Foodservice Equipment Group, we reported modest growth both domestically and internationally.
“Our focus on innovative solutions addressing demands for ventless cooking, automation, speed of service, and flexible equipment, position us well as our restaurant customers continue to evolve their kitchen operations.
“Given the strategic importance of equipment solutions to address customer issues around labor, operating footprint and menu, the timing and length of decision approval processes is often extended, affecting the timing of customer rollouts and replacement cycles.”
Fitzgerald added that at an international level the company was continuing to face tough conditions in Europe and the UK due to the uncertainty of the UK’s withdrawal from the EU, as well as headwinds with China.
However he claimed that despite these short-term disruptions and challenges, the firm would continue to invest in the international markets and expand its footprint.
FitzGerald added, “Expanding margins remains a priority. During the quarter we realized anticipated margin pressure from increasing materials costs related to tariffs. We have announced mid-year price increases to offset these increasing costs.
“Furthermore, integration of commercial foodservice acquisitions completed over the past several years is ongoing and will contribute to margin expansion. Taylor EBITDA margins have expanded to 25% and added to our earnings by approximately $0.07 this quarter. This was offset by the second quarter acquisition of the highly-respected brands Ultrafryer, BKI, APW and Bakers Pride.
“Efforts are underway to improve the profit contributions from these brands, and we are confident identified actions to be implemented in the second half of 2019 should generate significant benefits in 2020.”
He also pointed out that the company was making significant technology investments related to automation, controls, and IoT cloud-based offerings, which he claimed was critical to support its customer needs as they evolve their kitchen operations.
He said: “We have increased our operating spend related to these developments and are quickly developing unique solutions that enhance our broad portfolio of restaurant equipment.
“In conjunction with these initiatives we were pleased to recently acquire Powerhouse Dynamics, complementing our Middleby Connect IoT platform.
“Today we can enable customers to remotely operate and monitor a broad set of operations for restaurants, allowing our customers to achieve gains in labor efficiency, energy conservation, food cost and enhanced food safety.
“We are confident these ongoing investments will generate long-term growth and margin enhancement opportunities.”