1
The Middleby Corporation
June 3, 2008
Sidoti Fifth Annual Boston Emerging Growth Institutional Investor Forum
2
Forward Looking Statements
Statements made in this presentation or otherwise attributable to the company regarding the company's business which are not historical fact are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company cautions investors that such statements are estimates of future performance and are highly dependent upon a variety of important factors that could cause actual results to differ materially from such statements. Such factors include, but are not limited to variability in financing costs; quarterly variations in operating results; dependence on key customers; international exposure; foreign exchange and political risks affecting international sales; changing market conditions; the impact of competitive products and pricing; the timely development and market acceptance of the company's products; the availability and cost of raw materials; and other risks detailed herein and from time-to-time in the company's SEC filings.
3
Investment Highlights
Leading value-added manufacturer of hot commercial food service and
processing equipment (#1 or #2 market share in each product)
Products are critical to customers, represent small portion of their budgets,
and provide high ROIs
Unique global operating platform
U.S. restaurant sales have never declined
Diversified revenue base with exposure to high growth end markets
Focus on continued operational improvements and margin expansion
Successful track record of creating significant value through acquisitions
Proven senior management team
4
The Middleby Corporation is the worldwide leader in the manufacturing and distribution of a broad line of cooking, warming and preparation equipment for the commercial restaurant and food processing industries
Headquartered in United States (Chicago, Illinois)
Publicly traded on U.S. stock exchange (NASDAQ symbol: MIDD)
$500 million in annual revenue, 2007
1,200 employees worldwide
15 worldwide manufacturing facilities– 12 U.S. Facilities– 3 European Facilities– 2 Asian Facilities
Company Snapshot
5
Financial Performance
Sales
($ in millions)
Gross Profit
EBITDA EPS
$101.6
$229.1 $242.2$271.1
$316.7
$403.1
$500.5
2001 2002 2003 2004 2005 2006 2007
$32.4
$78.5 $85.9$102.6
$121.7
$156.9
$192.4
2001 2002 2003 2004 2005 2006 2007
$10.6
$28.7$39.0
$46.1
$63.1
$81.8
$99.3
2001 2002 2003 2004 2005 2006 2007
$0.09$0.33
$1.00$1.19
$1.99
$2.56
$3.11
2001 2002 2003 2004 2005 2006 2007
30% CAGR
35% CAGR
45% CAGR
80% CAGR
($ in millions)
($ in millions)
Financial Performance
6
$81.8
$99.3
$10.2
$27.6
$38.0
$44.9
$61.7
2001 2002 2003 2004 2005 2006 2007
46% 6-Yr CAGR
Free Cash Flow
1Free Cash Flow = EBITDA - Capital Expenditures
Free Cash Flow1
($ in millions)
Significant free cash flow generation
Free Cash Flow
8
Diverse and Stable Revenue Base
End Market
Pizza 10%
QSR 10%
Fast Casual 20%
Casual 10%
Independent 10%
Institutional 10%
Food Processing 10%
International Food Service 20%
DomesticFood
Service
Product Use
New Store Openings
33%
Menu Changes
33%
Replacement & Maintenance
34%
Growing international markets
Allows restaurants to differentiate themselves in a competitive market
Installed base of aged equipment in 850,000 establishments
Stable, diversified revenue base with exposure to high growth end markets and limited exposure to new U.S. restaurant openings
9
Industry Leading Brands - Foodservice
#1 in Pizza Chains
#1 in Convenience Stores
#1 in Fast Casual
#1 in Deli and Sandwich Shops
#1 in Steakhouses and Seafood
#1 in Chicken Outlets
#1 in Pan-Asian Cuisine
#2 in QSR
#2 in Casual Dining
10
Industry Leading Brands – Food Processing
#1 in Sausages, Hot Dogs and Ham
#1 in Chicken Preparation
#2 in Bacon
#2 in Burger Patties
#2 in Meat Packaging
11
Disruptive Technologies
Wow Oven Hydrovection Oven Visual Cooking Solstice Fryer
500 Series Range Ventless Hoods Enduraheat Rhapsody Oven
Automated oven with energy management system
Combination steam and convection in one cavity
Most energy efficient oven Self cleaning burner
Non-clog burner and water proof controls
Used by the best steakhouses in the world
Utilizing induction to hold food for extended periods
V-air technology cooks bread in less than 15 minutes
We focus on the development of innovative foodservice equipment
KI AWARD KI AWARD
KI AWARD
KI AWARD
12
Value Added Offering
Source: National Restaurant Association; Deloitte & Touch; Management Estimates 1 Assumes straight-line depreciation over 7-years. Yearly annual depreciation is less than 0.1% of cost structure.2 Minimal maintenance spend in first 2-3 years, $500 per year thereafter3 Pre-tax and financing
Limited Service Restaurant Unit Economics Illustrative Middleby Product Economics
Product represents a small investment and provides an attractive ROI/payback
$1,428
% Sales
Sales $2,200,000 100.0%
Cost of Food & Beverage 638,000 29.0% Pitco Fryer: $10,000
Gross Profit 1,562,000 71.0%
Salaries, Wages, Benefits 667,000 30.3% Life: 7 Years
Direct Operating Expenses 106,000 4.8%
Marketing 46,000 2.1% Deprecation Per Year: $1,428
Utilities 68,000 3.1%
Occupancy 163,000 7.4% Deprecation/Sales: 0.06%
Repairs and maintenance 37,000 1.7%
Depreciation 42,000 1.9%
G&A 55,000 2.5%
Other/Corporate Overhead 130,000 5.9%
Operating Profit 249,000 11.0%
Investment $10,000 Yearly Depreciation1,2 $1,428
Yearly Savings – Labor $1,200– Energy $4,200
$5,400 Other Savings
– Safety– Speed– Less Downtime
IRR3 50%
Payback period < 2 years
13
Premier Customers
Blue-chip customer base
Long standing relationships
Limited customer concentration
Large installed base
Serve all food segments
14
Global Reach
Test kitchens throughout the world allow Middleby to educate customers on the benefits of its equipment through hands-on experience and training
Worldwide service is critical and highly valued by U.S. chains expanding into international markets Worldwide sales infrastructure allows direct contact with key decision makers, especially in high-growth
markets Philippines and China manufacturing capabilities provides regional presence in high-growth Asian markets
Manufacturing facility, sales office and test kitchen Sales office with test kitchen Sales office only
Mississauga, Ontario, Canada
# of Employees: 2
Bilbao, Spain# of Employees: 11
Manchester, UK# of Employees: 20
Delhi, India# of Employees: 5
Seoul, South Korea# of Employees: 11
Shanghai, China# of Employees: 14
Taipei, Taiwan# of Employees: 7
Manila, Philippines# of Employees:
- Manufacturing: 95 - Sales & Dist.: 16
Mexico City, Mexico# of Employees: 26
Key Advantages
15
Competitive Advantage
Focus on leading brands Proven ability to transform acquired companies Preferred purchaser
Acquisition Capability
Strong relationships with dealers Key partnerships w/leading chains Only viable choice for many product
categories Emphasis on cross-selling
Sales & Marketing
Industry leading customer service “No-quibble” warranty Test kitchens throughout world
Service
Efficient operations & use of capital allows for 80%+ ROTIC 15 manufacturing facilities throughout the world Focus on working capital management
Manufacturing
Experienced and proven to deliver results Strong performance culture Equity ownership of >10%
Management Team
Industry leading innovation process (“customer driving”) Emphasis on quality 6-8 new products each year Ability to measure customer savings
Research & Development
A differentiated business model
16
New Product Pipeline - Foodservice
Mini WOW! Oven
Rethermalizer
Solstice Supreme Fryer
Plancha and Satay Ovens
500 Series Range
Tanduri Oven
Endura Heat
2007 Introductions 2008 Introductions
High H Oven
Hydrovection Oven
Rocket Fryer
Ventless Hood
Rhapsody Oven
Visual Cooking Combi-Ovens
Wall Oven Residential line
New Products Represent more than 20% of Net Sales
17
New Product Pipeline – Food Processing
Cyclone Belt Oven
Flash Pasteurization
Mid-Size J-Con Oven
Wireless Controls
2007 Introductions 2008 Introductions
Conveyor Fryer
Co-Extrusion
Forming Equipment
Intellijet Water Cutter
New products typically carry profit margins >5% higher than existing products
18
Financial Performance
Sales
($ in millions)
Gross Profit
EBITDA EPS
$101.6
$229.1 $242.2$271.1
$316.7
$403.1
$500.5
2001 2002 2003 2004 2005 2006 2007
$32.4
$78.5 $85.9$102.6
$121.7
$156.9
$192.4
2001 2002 2003 2004 2005 2006 2007
$10.6
$28.7$39.0
$46.1
$63.1
$81.8
$99.3
2001 2002 2003 2004 2005 2006 2007
$0.09$0.33
$1.00$1.19
$1.99
$2.56
$3.11
2001 2002 2003 2004 2005 2006 2007
30% CAGR
35% CAGR
45% CAGR
80% CAGR
($ in millions)
($ in millions)
Financial Performance
19
Favorable Industry Dynamics
Dual income families continue to eat out, even in challenging economic times
Percentage of household income spent on food prepared outside the home is increasing
Baby boomer generation approaching retirement
Growth in fast casual dining and breakfast
Emergence of co-branding process is gaining steam
Expansion of new menu items driving purchases of new foodservice equipment
On-premise baking more prevalent
Growing awareness of nutrition implemented through low carb diets and increased presence of salads with grilled meat and fish
Average lifespan of foodservice equipment is ~8 years
Large installed base (over 850,000 establishments in U.S.)
Replacement represents approximately one-third of the market
Trend in eating out gaining momentum
Rapid growth in developing nations such as China and India
U.S. chain concepts expanding internationally
Foodservice operators demanding greater productivity through automation
Need for equipment with greater energy cost savings
Increased cost of trans-fat free oil
New Restaurant / Store Openings
Menu Changes
Favorable Demographics
Replacement of Existing Equipment
Expansion of International Markets
Rising Foodservice Operator Costs
Many factors support growing demand for foodservice equipment