FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

|X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the period ended June 28, 2003

|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File No. 1-9973

THE MIDDLEBY CORPORATION
(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization)

36-3352497
(I.R.S. Employer Identification No.)

1400 Toastmaster Drive, Elgin, Illinois
(Address of Principal Executive Offices)

60120
(Zip Code)

Registrant’s Telephone No., including Area Code

(847) 741-3300

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve (12) months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES |X| NO|_|

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Exchange Act). Yes |_| No |X|

As of August 8, 2003, there were 9,033,722 shares of the registrant’s common stock outstanding.

THE MIDDLEBY CORPORATION AND SUBSIDIARIES

QUARTER ENDED JUNE 28, 2003

INDEX

DESCRIPTION			PAGE


PART I.	FINANCIAL INFORMATION


	Item 1.	Condensed Consolidated Financial Statements (unaudited)


		CONDENSED CONSOLIDATED BALANCE SHEETS	1
		June 28, 2003 and December 28, 2002


		CONDENSED CONSOLIDATED STATEMENTS
		OF EARNINGS June 28, 2003 and June 29, 2002	2


		CONDENSED CONSOLIDATED STATEMENTS
		OF CASH FLOWS June 28, 2003 and June 29, 2002	3


		NOTES TO CONDENSED CONSOLIDATED
		FINANCIAL STATEMENTS	4


	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13


	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23


	Item 4.	Controls and Procedures	27


PART II.	OTHER INFORMATION		28

PART I. FINANCIAL INFORMATION

THE MIDDLEBY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Amounts)
(Unaudited)

	Jun. 28, 2003			Dec. 28, 2002
ASSETS
Cash and cash equivalents	$	3,912		$	8,378
Accounts receivable, net of reserve
for doubtful accounts of
$3,565 and $3,494		31,837			27,797
Inventories, net		27,815			27,206
Prepaid expenses and other		1,365			1,069
Current deferred taxes		10,004			13,341

Total current assets		74,933			77,791
Property, plant and equipment, net of
accumulated depreciation of
$27,655 and $25,788		26,304			27,500
Goodwill		74,761			74,761
Other intangibles		26,300			26,300
Other assets		1,654			1,610

Total assets	$	203,952		$	207,962

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current maturities of long-term debt	$	13,500		$	14,400
Accounts payable		8,328			13,488
Accrued expenses		36,934			36,013

Total current liabilities		58,762			63,901
Long-term debt		67,540			73,562
Long-term deferred tax liability		7,878			7,878
Other non-current liabilities		18,048			17,989
Stockholders’ equity:
Preferred stock, $.01 par value;
nonvoting; 2,000,000 shares
authorized; none issued		—			—
Common stock, $.01 par value;
20,000,000 shares authorized;
11,036,196 and 11,028,396 issued
in 2003 and 2002, respectively		110			110
Shareholder receivables		(200	)		(200	)
Paid-in capital		53,927			53,907
Treasury stock at cost; 2,002,474
shares in 2003 and 2002		(11,705	)		(11,705	)
Retained earnings		12,279			5,073
Accumulated other comprehensive loss		(2,687	)		(2,553	)

Total stockholders’ equity		51,724			44,632

Total liabilities and stockholders’ equity	$	203,952		$	207,962

See accompanying notes

- 1 -

THE MIDDLEBY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands, Except Per Share Amounts)
(Unaudited)

	Three Months Ended						Six Months Ended
	Jun. 28, 2003			Jun. 29, 2002			Jun. 28, 2003			Jun. 29, 2002
Net sales	$	63,595		$	62,478		$	118,362		$	116,969
Cost of sales		40,945			40,957			76,660			77,555

Gross profit		22,650			21,521			41,702			39,414

Selling and distribution expenses		7,780			7,312			14,942			14,533
General and administrative expenses		5,226			6,013			10,709			11,964

Income from operations		9,644			8,196			16,051			12,917


Interest expense and deferred financing amortization		1,623			3,024			3,337			6,122
(Gain) loss on acquisition financing
derivatives		(42	)		579			(111	)		(14	)
Other (income) expense, net		148			(311	)		283			(89	)

Earnings before income taxes		7,915			4,904			12,542			6,898
Provision for income taxes		3,318			2,090			5,336			3,044



Net earnings	$	4,597		$	2,814		$	7,206		$	3,854



Net earnings per share:
Basic	$	0.51		$	0.31		$	0.80		$	0.43
Diluted	$	0.49		$	0.31		$	0.77		$	0.43


Weighted average number of shares:
Basic		9,033			8,974			9,031			8,973
Dilutive stock options		320			108			294			58

Diluted		9,353			9,082			9,325			9,031

See accompanying notes

- 2 -

THE MIDDLEBY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)

	Six Months Ended
	Jun. 28, 2003			Jun. 29, 2002

Cash flows from operating activities-
Net earnings	$	7,206		$	3,854


Adjustments to reconcile net earnings
to cash provided by operating
activities:

Depreciation and amortization		2,076			3,711
Non-cash portion of tax provision		3,337			(432	)
Unrealized gain on derivative financial instruments		(111	)		(14	)
Unpaid interest on seller notes(1)		478			1,277
Unpaid interest on subordinated senior notes(1)		—			254
Changes in assets and liabilities- Accounts receivable, net		(4,019	)		(4,061	)
Inventories, net		(589	)		1,832
Prepaid expenses and other assets		(547	)		(36	)
Accounts payable		(5,160	)		5,163
Accrued expenses and other liabilities		893			1,188

Net cash provided by operating activities		3,564			12,736


Cash flows from investing activities- Net additions to property and equipment		(674	)		(824	)

Net cash (used in) investing activities		(674	)		(824	)


Cash flows from financing activities- Proceeds (repayments) under revolving credit facilities, net		—			(12,885	)
Repayments of senior secured bank notes		(7,400	)		(1,500	)
Other financing activities, net		20			(42	)

Net cash (used in) financing activities		(7,380	)		(14,427	)

Effect of exchange rates on cash and cash equivalents		24			16


Changes in cash and cash equivalents- Net (decrease) increase in cash and cash equivalents		(4,466	)		(2,499	)
Cash and cash equivalents at
beginning of year		8,378			5,997

Cash and cash equivalents at end of quarter	$	3,912		$	3,498


Supplemental disclosure of cash flow information:
Interest paid	$	2,527		$	2,992

Income taxes paid	$	1,753		$	2,878

(1) Represents an increase in principal balance
of debt associated with interest paid in kind.

See accompanying notes

- 3 -

THE MIDDLEBY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 28, 2003
(Unaudited)

1)	Summary of Significant Accounting Policies

	The consolidated financial statements have been prepared by The Middleby Corporation (the “company”), pursuant to the rules and regulations of the Securities and Exchange Commission, the financial statements are unaudited and certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the company believes that the disclosures are adequate to make the information not misleading. These financial statements should be read in conjunction with the financial statements and related notes contained in the company’s 2002 Form 10-K.

	In the opinion of management, the financial statements contain all adjustments necessary to present fairly the financial position of the company as of June 28, 2003 and December 28, 2002, and the results of operations for the six months ended June 28, 2003 and June 29, 2002 and cash flows for the six months ended June 28, 2003 and June 29, 2002.

2)	New Accounting Pronouncements

	In June 2001, the FASB issued SFAS No. 143 “Accounting for Asset Retirement Obligations”. This statement addresses financial accounting and reporting obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs, and requires that such costs be recognized as a liability in the period in which incurred. This statement is effective for financial statements issued for fiscal years beginning after June 15, 2002. The adoption of this statement did not have a material impact to the financial statements.

	In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements SFAS No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections.” SFAS No. 145 eliminates the current requirement that gains and losses on debt extinguishment must be classified as extraordinary items in the income statement. Instead, such gains and losses will be classified as extraordinary items only if they are deemed to be unusual and infrequent. The changes related to debt extinguishment are effective for fiscal years beginning after May 15, 2002.

- 4 -

	In June 2002, the FASB issued Statement No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” This statement requires recording costs associated with exit or disposal activities at their fair values when a liability has been incurred. Under previous guidance, certain exit costs were accrued upon management’s commitment to an exit plan, which is generally before an actual liability has been incurred. This statement is effective for financial statements issued for fiscal years beginning after December 31, 2002. The adoption of this statement did not have a material impact to the financial statements.

	In April 2003, the FASB issued Statement No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” This statement requires that contracts with comparable characteristics be accounted for similarly. This statement is effective for contracts entered into or modified after June 30, 2003. The company will apply this guidance prospectively.

	In May 2003, the FASB issued Statement No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” This statement establishes standards for classifying and measuring certain financial instruments with characteristics of both liabilities and equity. This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The company does not expect the adoption of this statement to have a material impact to the financial statements.


3)	Other Comprehensive Income

	The company reports changes in equity during a period, except those resulting from investment by owners and distribution to owners, in accordance with SFAS No. 130, “Reporting Comprehensive Income.”

	Components of other comprehensive income were as follows (in thousands):



	Three Months Ended						Six Months Ended
	Jun. 28, 2003			Jun. 29, 2002			Jun. 28, 2003			Jun. 29, 2002
Net earnings	$	4,597		$	2,814		$	7,206		$	3,854
Cumulative translation adjustment		115			(55	)		148			15

Unrealized loss on interest rate swap		(184	)		—			(282	)		—



Comprehensive income	$	4,528		$	2,759		$	7,072		$	3,869


	Accumulated other comprehensive income is comprised of minimum pension liability of $1.5 million as of June 28, 2003 and December 28, 2002, foreign currency translation adjustments of $0.4 million as of June 28, 2003 and $0.5 million at December 28, 2002 and an unrealized loss on a interest rate swap of $0.8 million at June 28, 2003 and $0.5 million at December 28, 2002.

- 5 -

4)	Inventories

	Inventories are composed of material, labor and overhead and are stated at the lower of cost or market. Costs for Blodgett inventory have been determined using the last-in, first-out (“LIFO”) method. Had the inventories been valued using the first-in, first-out (“FIFO”) method, the amount would not have differed materially from the amounts as determined using the LIFO method. Costs for Middleby inventory have been determined using the FIFO method. The company estimates reserves for inventory obsolescence and shrinkage based on its judgment of future realization. Inventories at June 28, 2003 and December 28, 2002 are as follows:

	Jun. 28, 2003		Dec. 28, 2002
	(In thousands)
Raw materials and parts	$	7,134	$	6,178
Work-in-process		4,093		5,849
Finished goods		16,588		15,179



	$	27,815	$	27,206

5)	Accrued Expenses

	Accrued expenses consist of the following:

	Jun. 28, 2003		Dec. 28, 2002
	(In thousands)
Accrued warranty	$	11,632	$	10,447
Accrued payroll and related expenses		9,155		8,544
Accrued customer rebates		4,609		6,043
Accrued commissions		1,847		1,535
Accrued severance and plant closures		1,305		1,426
Other accrued expenses		8,386		8,018



	$	36,934	$	36,013


6)	Warranty Costs

	In the normal course of business the company issues product warranties for specific product lines and provides for the estimated future warranty cost in the period in which the sale is recorded. The estimate of warranty cost is based on contract terms and historical warranty loss experience that is periodically adjusted for recent actual experience. Because warranty estimates are forecasts that are based on the best available information, claims costs may differ from amounts provided. Adjustments to initial obligations for warranties are made as changes in the obligations become reasonably estimable.

- 6 -

A rollforward of the warranty reserve is as follows:

	Jun. 28, 2003			Jun. 29, 2002
	(dollars in thousands)
Beginning balance	$	10,447		$	9,179
Warranty expense		5,706			4,841
Warranty claims		(4,521	)		(3,951	)

Ending balance	$	11,632		$	10,069

7)	Acquisition Integration

On December 21, 2001 the company established reserves through purchase accounting associated with severance related obligations and facility exit costs related to the acquired Blodgett business operations.

Reserves for estimated severance obligations were established in conjunction with reorganization initiatives established during 2001 and completed during the first half of 2002. During the first quarter of 2002, the company reduced headcount at the acquired Blodgett operations by 123 employees. This headcount reduction included most functional areas of the company and included a reorganization of the executive management structure. During the second quarter of 2002, the company further reduced headcount at the Blodgett operations by 30 employees in conjunction with the consolidation and exit of two manufacturing facilities. Production for the Blodgett combi-oven, conveyor oven, and deck oven lines were moved from two facilities located in Williston and Shelburne, Vermont into existing manufacturing facilities in Burlington, Vermont and Elgin, Illinois. The second quarter headcount reductions predominately related to the manufacturing function. The remaining reserve balance at June 28, 2003 is primarily associated with continuing medical benefits associated with employees terminated in 2002.

Reserves for facility closure costs predominately relate to lease obligations for three manufacturing facilities that were exited in 2001 and 2002. During the second quarter of 2001, prior to the acquisition, reserves were established for lease obligations associated with a manufacturing facility in Quakertown, Pennsylvania that was exited when production at this facility was relocated to an existing facility in Bow, New Hampshire. The lease associated with the exited facility extends through December 11, 2014. The facility is currently subleased for a portion of the lease term through July 2006. During the second quarter of 2002, the company exited leased facilities in Williston and Shelburne, Vermont in conjunction with the company’s manufacturing consolidation initiatives. The Williston lease extends through June 30, 2005 and the Shelburne lease extends through December 11, 2014. Neither of these facilities has been subleased although the company is performing an active search for subtenants. Future lease obligations under these three facilities are anticipated to amount to approximately $13.5 million. The remaining reserve balance is reflected net of anticipated sublease income.

- 7 -

The forecast of sublease income could differ from actual amounts, which are subject to the occupancy by a subtenant and a negotiated sublease rental rate. If the company’s estimates or underlying assumptions change in the future, the company would be required to adjust the reserve amount accordingly.

A summary of the reserve balance activity is as follows (in thousands):

	Balance Dec. 28, 2002		Cash Payments			Balance Jun. 28, 2003

Severance obligations	$	271	$	(113	)	$	158
Facility closure and lease obligations		9,493		(557	)		8,936

Total	$	9,764	$	(670	)	$	9,094

All actions pertaining to the company’s integration initiatives have been completed. At this time, management believes the remaining reserve balance is adequate to cover the remaining costs identified at June 28, 2003.

8)	Financial Instruments

In June 1998, the FASB issued SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. SFAS No. 133, as amended, establishes accounting and reporting standards for derivative instruments. The statement requires an entity to recognize all derivatives as either assets or liabilities and measure those instruments at fair value. Derivatives that do not qualify as a hedge must be adjusted to fair value in earnings. If the derivative does qualify as a hedge under SFAS No. 133, changes in the fair value will either be offset against the change in fair value of the hedged assets, liabilities or firm commitments or recognized in other accumulated comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a hedge’s change in fair value will be immediately recognized in earnings.

Foreign Exchange: The company has entered into derivative instruments, principally forward contracts to reduce exposures pertaining to fluctuations in foreign exchange rates. As of June 28, 2003 the company had forward contracts to purchase $6.5 million U.S. Dollars with various foreign currencies, all of which mature in the next fiscal quarter. The fair value of these forward contracts was ($0.1) million at the end of the quarter.

- 8 -

Interest rate swap: On January 11, 2002, in accordance with the senior bank agreement, the company entered into an interest rate swap agreement with a notional amount of $20.0 million to fix the interest rate applicable to certain of its variable-rate debt. The agreement swaps one-month LIBOR for a fixed rate of 4.03% and is in effect through December 31, 2004. A loss of $0.3 million was recorded in earnings for the six-month period ended June 29, 2002 as the interest rate swap was marked-to-market (not specifically designated as a hedge). At June 30, 2002 the company designated the swap as a cash flow hedge. Accordingly, changes in the fair value of the swap subsequent to June 30, 2002 are recognized in accumulated other comprehensive income and any hedge ineffectiveness is recorded in current-period earnings as a component of gains and losses on acquisition financing derivatives. The change in fair value of this swap agreement in the first six months of 2003 was $0.1 million. The ineffective portion of the interest rate hedge recorded in earnings during the first six months amounted to $0.1 million.

On February 9, 2003 in accordance with the senior bank agreement, the company entered into another interest rate swap agreement with a notional amount of $10.0 million to fix the interest rate applicable to certain of its variable-rate debt. The agreement swaps one-month LIBOR for a fixed rate of 2.36% and is in effect through December 30, 2005. The company designated the swap as a cash flow hedge at its inception and all changes in the fair value of the swap are recognized in accumulated other comprehensive income. The change in fair value of this swap agreement in the first six months of 2003 was ($0.2) million.

Stock warrant rights: In conjunction with subordinated senior notes issued in connection with the financing for the Blodgett acquisition, the company issued 358,346 stock warrant rights and 445,100 conditional stock warrant rights to the subordinated senior noteholder. These stock warrant rights were repurchased and retired in December 2002 in conjunction with the company’s debt refinancing. Prior to the retirement of the warrant rights, the company had recorded a liability pertaining to an obligation that required the company to repurchase these warrant rights at the fair market value in circumstances defined by the subordinated senior note agreement. The obligation pertaining to the repurchase of the warrant rights was recorded in Other Non-Current Liabilities at fair market value utilizing a Black-Scholes valuation model. The change in the fair value of the stock warrant rights during the first six months of 2002 amounted to $0.3 million and was recorded as a gain in the income statement for the six month period ended June 29, 2002. No such amount was incurred in 2003.

- 9 -

9)	Stock-Based Compensation

As permitted under SFAS No. 123: “Accounting for Stock-Based Compensation” , the company has elected to follow APB Opinion No. 25: “Accounting for Stock Issued to Employees” in accounting for stock-based awards to employees and directors. Under APB No. 25, because the exercise price of the company’s stock options is equal to or greater than the market price of the underlying stock on the date of grant, no compensation expense is recognized in the company’s financial statements for all periods presented.

Pro forma information regarding net earnings and earnings per share is required by SFAS No. 123. This information is required to be determined as if the company had accounted for its employee and director stock options granted subsequent to December 31, 1994 under the fair value method of that statement.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because the company’s options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in the opinion of management, the existing models do not necessarily provide a reliable single measure of the fair value of its options.

For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options’ vesting period. The company’s pro forma net earnings and per share data utilizing a fair value based method is as follows:

	Three Months Ended						Six Months Ended
	Jun. 28, 2003			Jun. 29, 2002			Jun. 28, 2003			Jun. 29, 2002
	(in thousands, except per share data)
Net income – as reported	$	4,597		$	2,814		$	7,206		$	3,854
Less: Stock-based employee
compensation expense,
net of taxes		(93	)		(63	)		(167	)		(90	)


Net income – pro forma	$	4,504		$	2,751		$	7,039		$	3,764

Earnings per share – as
reported:
Basic	$	0.51		$	0.31		$	0.80		$	0.43
Diluted		0.49			0.31			0.77			0.43

Earnings per share – pro forma:
Basic	$	0.50		$	0.31		$	0.78		$	0.42
Diluted		0.48			0.30			0.75			0.42

- 10 -

10)

Segment Information

The company operates in two reportable operating segments defined by management reporting structure and operating activities.

The worldwide manufacturing divisions operate through the Cooking Systems Group. This business segment has manufacturing facilities in Illinois, New Hampshire, North Carolina, Vermont and the Philippines. This business segment supports four major product groups, including conveyor oven equipment, core cooking equipment, counterline cooking equipment, and international specialty equipment. Principal product lines of the conveyor oven product group include Middleby Marshall ovens, Blodgett ovens and CTX ovens. Principal product lines of the core cooking equipment product group include the Southbend product line of ranges, steamers, convection ovens, broilers and steam cooking equipment, the Blodgett product line of convection and combi ovens, MagiKitch’n charbroilers and catering equipment and the Pitco Frialator product line of fryers. The counterline cooking and warming equipment product group includes toasters, hot food servers, foodwarmers and griddles distributed under the Toastmaster brand name. The international specialty equipment product group is primarily comprised of food preparation tables, undercounter refrigeration systems, ventilation systems and component parts for the U.S. manufacturing operations.

The International Distribution Division provides integrated sales, export management, distribution and installation services through its operations in China, India, Korea, Mexico, Spain, Taiwan and the United Kingdom. The division sells the company’s product lines and certain non-competing complementary product lines throughout the world. For a local country distributor or dealer, the company is able to provide a centralized source of foodservice equipment with complete export management and product support services.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The company evaluates individual segment performance based on operating income. Management believes that intersegment sales are made at established arms-length transfer prices.

- 11 -

The following table summarizes the results of operations for the company’s business segments(1)(in thousands):

	Cooking Systems Group		International Distribution			Corporate and Other (2)			Eliminations (3)			Total
Three months ended June 28, 2003
Net sales	$	60,348	$	11,018		$	—		$	(7,771	)	$	63,595
Operating income (loss)		11,599		617			(2,472	)		(100	)		9,644
Depreciation expense		984		35			(59	)		—			960
Capital expenditures		479		11			2			—			492


Six months ended June 28, 2003
Net sales	$	113,962	$	19,875		$	—		$	(15,475	)	$	118,362
Operating income (loss)		19,854		902			(4,155	)		(550	)		16,051
Depreciation expense		1,934		74			(138	)		—			1,870
Capital expenditures		704		(32	)		2			—			674


Total assets		185,774		22,728			6,432			(10,982	)		203,952
Long-lived assets(4)		125,497		355			3,167			—			129,019

Three months ended June 29, 2002
Net sales	$	59,946	$	9,446		$	(9	)	$	(6,905	)	$	62,478
Operating income (loss)		10,435		485			(2,458	)		(266	)		8,196
Depreciation expense		1,171		42			69			—			1,282
Capital expenditures		518		66			7			—			591


Six months ended June 29, 2002
Net sales	$	112,266	$	16,292		$	70		$	(11,659	)	$	116,969
Operating income (loss)		17,418		488			(4,573	)		(416	)		12,917
Depreciation expense		2,332		82			67			—			2,481
Capital expenditures		740		75			9			—			824


Total assets		187,273		17,529			15,133			(10,982	)		208,953
Long-lived assets(4)		129,817		420			5,817			—			136,054

	(1)	Non-operating expenses are not allocated to the operating segments. Non-operating expenses consist of interest expense and deferred financing amortization, gains and losses on acquisition financing derivatives, and other income and expenses items outside of income from operations.

	(2)	Includes corporate and other general company assets and operations.

	(3)	Includes elimination of intercompany sales, profit in inventory and intercompany receivables. Intercompany sale transactions are predominantly from the Cooking Systems Group to the International Distribution Division.

	(4)	Long-lived assets of the Cooking Systems Group includes assets located in the Philippines which amounted to $2,500 and $2,853 in 2003 and 2002, respectively.

Net sales by major geographic region, including those sales from the Cooking Systems Group direct to international customers, were as follows (in thousands):

	Three Months Ended				Six Months Ended
	Jun. 28, 2003		Jun. 29, 2002		Jun. 28, 2003		Jun. 29, 2002
United States and Canada	$	51,443	$	51,574	$	96,019	$	95,931

Asia		5,485		4,333		9,291		7,620

Europe and Middle East		5,224		5,112		10,321		10,276

Latin America		1,443		1,459		2,731		3,142



Net Sales	$	63,595	$	62,478	$	118,362	$	116,969

- 12 -

11)

Subsequent Event

In August 2003, subsequent to the end of the second quarter, the company repaid $11.0 million in notes due to Maytag. The note reduction included the repayment of $7.3 million in notes that had carried a 13.5% interest rate and $3.7 million in notes that had carried a 12.0% interest rate. The note repayment was funded from $5.6 million of borrowings under the company’s revolving credit facility and $5.4 million of existing cash balances. Borrowings under the revolving credit facility are assessed interest at a floating rate of 3.0% above LIBOR, which is currently 1.1%. After reflecting the repayment, the notes due to Maytag have been reduced to $10.0 million, all which carry a 12.0% interest rate.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Unaudited).

Informational Note

This report contains forward-looking statements subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. The company cautions readers that these projections are based upon future results or events and are highly dependent upon a variety of important factors which could cause such results or events to differ materially from any forward-looking statements which may be deemed to have been made in this report, or which are otherwise made by or on behalf of the company. Such factors include, but are not limited to, volatility in earnings resulting from goodwill impairment losses which may occur irregularly and in varying amounts; 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, including the 2002 report on Form 10-K.

- 13 -

Net Sales Summary
(dollars in thousands)

	Three Months Ended										Six Months Ended
	Jun. 28, 2003					Jun. 29, 2002					Jun. 28, 2003					Jun. 29, 2002
	Sales			Percent		Sales			Percent		Sales			Percent		Sales			Percent

Business Divisions

Cooking Systems Group:
Core cooking equipment	$	43,336		68.1		$	43,605		69.8		$	81,390		68.8		$	80,237		68.6
Conveyor oven
equipment		12,557		19.7			12,114		19.4			23,753		20.1			24,200		20.7
Counterline cooking equipment		2,430		3.8			2,711		4.3			4,798		4.0			5,222		4.5
International specialty equipment		2,025		3.2			1,516		2.5			4,021		3.4			2,607		2.2


Total Cooking Systems Group		60,348		94.8			59,946		96.0			113,962		96.3			112,266		96.0


International Distribution (1)		11,018		17.3			9,446		15.1			19,875		16.8			16,292		13.9


Intercompany sales (2)		(7,771	)	(12.1	)		(6,914	)	(11.1	)		(15,475	)	(13.1	)		(11,589	)	(9.9	)


Total	$	63,595		100.0		$	62,478		100.0		$	118,362		100.0		$	116,969		100.0

(1)

Consists of sales of products manufactured by Middleby and products manufactured by third parties.

(2)

Consists primarily of the elimination of sales to the company’s International Distribution Division from Cooking Systems Group.

Results of Operations

The following table sets forth certain consolidated statements of earnings items as a percentage of net sales for the periods.

	Three months ended				Six months ended
	Jun. 28, 2003		Jun. 29, 2002		Jun. 28, 2003		Jun. 29, 2002
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales	64.4		65.6		64.8		66.3

Gross profit	35.6		34.4		35.2		33.7

Selling, general and administrative
expenses	20.4		21.3		21.7		22.7

Income from operations	15.2		13.1		13.5		11.0
Interest expense and deferred
financing amortization, net	2.6		4.8		2.8		5.2

Loss (gain) on acquisition financings derivatives	—		0.9		(0.1	)	—

Other expense, net	0.2		(0.4	)	0.2		(0.1	)

Earnings before income taxes	12.4		7.8		10.6		5.9
Provision for income taxes	5.2		3.3		4.5		2.6

Net Earnings	7.2	%	4.5	%	6.1	%	3.3	%

- 14 -

Three Months Ended June 28, 2003 Compared to Three Months Ended June 29, 2002

NET SALES. Net sales for the second quarter of fiscal 2003 were $63.6 million as compared to $62.5 million in the second quarter of 2002.

Net sales at the Cooking Systems Group amounted to $60.3 million in the second quarter of 2003 as compared to $59.9 million in the prior year quarter. Core cooking equipment sales amounted to $43.3 million as compared to $43.6 million. Increased sales of fryers associated with market share gains and expansion of international chain business were more than offset by reduced convection oven sales. Convection oven sales were impacted by reduced demand in institutional markets, such as hotels, schools, hospitals, government agencies and other public and private facilities, and the impact of increased pricing competition.

Conveyor oven equipment sales amounted to $12.5 million as compared to $12.1 million in the prior year quarter. The increase in conveyor oven sales resulted from increased sales associated with new products, including a new mid-sized conveyor oven and increased sales of service parts. An increase in business with major pizza chains in certain international markets was offset by reduced sales in the U.S. market due to a lower rate of store openings. Counterline cooking equipment sales decreased slightly to $2.4 million from $2.7 million in the prior year. International specialty equipment sales increased to $2.0 million compared to $1.5 million in the prior year quarter due to increased component manufacturing for the company’s U.S. based operations.

Net sales at the International Distribution Division increased by $1.6 million to $11.0 million, due to expansion in Asia related to store openings of U.S. based chains.

GROSS PROFIT. Gross profit increased to $22.7 million from $21.5 million in the prior year period. The gross margin rate was 35.6% in the quarter as compared to 34.4% in the prior year quarter. The increase in the overall gross margin rate is largely attributable to the impact of cost reduction initiatives completed in 2002, including the consolidation of manufacturing operations. Gross profit also benefited from higher margins on new product introductions and the impact of cost efficiencies on higher volumes.

- 15 -

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Combined selling, general, and administrative expenses decreased from $13.3 million in the second quarter of 2002 to $13.0 million in the second quarter of 2003. As a percentage of net sales operating expenses amounted to 21.3% in the second quarter of 2002 versus 20.4% in the second quarter of 2003. Selling and distribution expenses increased from $7.3 million in the second quarter of 2002 to $7.8 million in 2003 due to higher advertising costs associated with introduction of new products and promotion of the brand image. Commission expense was also higher due to the increase in sales volume. General and administrative expenses decreased from $6.0 million to $5.2 million reflecting the benefit of cost reduction actions completed in 2002 associated with the Blodgett acquisition.

NON-OPERATING EXPENSES. Interest and deferred financing amortization costs decreased to $1.6 million from $3.0 million in the prior year as a result of lower debt balances and lower average interest rates resulting from the debt refinancing completed in the fourth quarter of 2002. The gain on acquisition related financing derivatives was less than $0.1 million in the current year quarter compared to a loss of $0.6 million in the prior year quarter. The $0.6 million loss on financing derivatives in the second quarter of 2002 included a $0.1 million loss related to stock warrant rights, which have since been retired at the end of 2002 and $0.5 million associated with the change in market value of the company’s interest rate swap. Other expense was $0.1 million in the current year compared to other income of $0.3 million in the prior year and primarily consists of foreign exchange losses.

INCOME TAXES. A tax provision of $3.3 million, at an effective rate of 42%, was recorded during the quarter as compared to a $2.1 million provision at a 43% effective rate in the prior year quarter. The prior year quarter included higher provisions for state tax assessments

Six Months Ended June 28, 2003 Compared to Six Months Ended June 29, 2002

NET SALES. Net sales in the six-month period ended June 28, 2003 were $118.4 million as compared to $117.0 million in the six-month period ended June 29, 2002.

Net sales at the Cooking Systems Group for the six-month period ended June 28, 2003 amounted to $114.0 million as compared to $112.3 million in the prior year six-month period. Core cooking equipment sales amounted to $81.4 million as compared to $80.2 million, primarily due to increased sales of fryers associated with market share gains and expansion of international chain business. This increase was offset in part due to reduced convection oven sales resulting from lower demand in institutional markets and the impact of increased pricing competition. Conveyor oven equipment sales amounted to $23.8 million as compared to $24.2 million in the prior year six-month period. The decrease in conveyor oven sales resulted from lower store openings of major chain customers in the U.S. market as compared to the prior year. Reduced sales to the major chain customers was offset in part by higher service parts sales and increased sales to smaller chains and general market customers. Counterline cooking equipment sales decreased to $4.8 million from $5.2 million in the prior year. International specialty equipment sales increased to $4.0 million from $2.6 million as a result of increased component manufacturing for the company’s U.S. based operations.

- 16 -

Net sales at the International Distribution Division increased by $3.6 million to $19.9 million due to the distribution of the Blodgett and Pitco product lines which began to be distributed through this division in the second quarter of 2002 and increased sales into Asian markets resulting from global expansion of U.S. based chains.

GROSS PROFIT. Gross profit increased to $41.7 million from $39.4 million in the prior year period. The gross margin rate was 35.2% for the six-month period as compared to 33.7% in the prior year period. The increase in the overall gross margin rate is largely attributable to cost reduction actions associated with the Blodgett acquisition and integration. As part of the cost structure improvements, the company consolidated manufacturing for several Blodgett product lines into existing manufacturing operations during the second quarter of 2002.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Combined selling, general, and administrative expenses decreased from $26.5 million for the six-month period ended June 29, 2002 to $25.7 million for the six-month period ended June 28, 2003. As a percentage of net sales operating expenses amounted to 21.7% in the six-month period ended June 28, 2003 versus 22.7% in the prior year. Selling and distribution expenses increased from $14.5 million in the first half of 2002 to $14.9 million in 2003 due to higher advertising costs associated with introduction of new products and promotion of the brand image. Commission expense was also higher due to the increase in sales volume. General and administrative expenses decreased from $12.0 million to $10.7 million reflecting the benefit of cost reduction actions completed in 2002 associated with the Blodgett acquisition and integration.

- 17 -

NON-OPERATING EXPENSES. Interest and deferred financing amortization costs decreased to $3.3 million from $6.1 million in the prior year as a result of lower debt balances and lower average interest rates resulting from the debt refinancing completed in the fourth quarter of 2002. The gain on acquisition related financing derivatives was $0.1 million in the current year six-month period compared to a gain of less than $0.1 million in the prior year six-month period. Other expense was $0.3 million in the current year compared to other income of $0.1 million in the prior year due to the unfavorable impact of foreign exchange fluctuations.

INCOME TAXES. A tax provision of $5.3 million, at an effective rate of 43%, was recorded for the six-month period, as compared to a provision of $3.0 million at 44% rate in the prior year period. The reduction in the effective rate reflects improved earnings at foreign operations, for which the prior year reflected tax losses with no recorded benefit. The prior year also included higher provisions for state income tax assessments.

Financial Condition and Liquidity

During the six months ended June 28, 2003, cash and cash equivalents decreased by $4.4 million to $3.9 million at June 28, 2003 from $8.4 million at December 28, 2002. Net borrowings decreased from $88.0 million at December 28, 2002 to $81.0 million at June 28, 2003.

OPERATING ACTIVITIES. Net cash provided by operating activities after changes in assets and liabilities was $3.6 million as compared to $12.7 million in the prior year period. Cash provided by operating activities included $0.5 million of borrowings on subordinated notes representing unpaid interest, which is added to the principal balance of the notes consistent with financing agreements.

During the six months ended June 28, 2003, accounts receivable increased $4.0 million due to increased sales at the end of the quarter. Inventories increased $0.6 million due to increased stocking of product in international markets for customer orders and inventory associated with new product introductions. Accounts payable decreased $5.2 million due to timing of vendor payments. Accrued expenses and other liabilities increased $0.9 million primarily as a result of higher warranty reserves and compensation related liabilities offset in part by lower customer rebate reserves.

INVESTING ACTIVITIES. During the six months ending June 28, 2003, the company had capital expenditures of $0.7 million associated with the purchase of production equipment.

- 18 -

FINANCING ACTIVITIES. Net cash flows used in the financing activities was $7.4 million during the six months ending June 28, 2003. This included $6.0 million of scheduled repayments under the senior term loan and $1.4 million of scheduled repayments under the foreign bank loan.

At June 28, 2003, the company was in compliance with all covenants pursuant to its borrowing agreements. Management believes that future cash flows from operating activities and borrowing availability under the revolving credit facility will provide the company with sufficient financial resources to meet its anticipated requirements for working capital, capital expenditures and debt amortization for the foreseeable future.

New Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 143 “Accounting for Asset Retirement Obligations”. This statement addresses financial accounting and reporting obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs, and requires that such costs be recognized as a liability in the period in which incurred. This statement is effective for financial statements issued for fiscal years beginning after June 15, 2002. The adoption of this statement did not have a material impact to the financial statements.

In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements SFAS No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections”. SFAS No. 145 eliminates the current requirement that gains and losses on debt extinguishment must be classified as extraordinary items in the income statement. Instead, such gains and losses will be classified as extraordinary items only if they are deemed to be unusual and infrequent. The changes related to debt extinguishment will be effective for fiscal years beginning after May 15, 2002, and the changes related to lease accounting will be effective for transactions occurring after May 15, 2002. The company will apply this guidance beginning in fiscal 2003.

In June 2002, the FASB issued Statement No. 146, “Accounting for Costs Associated with Exit or Disposal Activities”. This Statement requires recording costs associated with exit or disposal activities at their fair values when a liability has been incurred. Under previous guidance, certain exit costs were accrued upon management’s commitment to an exit plan, which is generally before an actual liability has been incurred. This statement is effective for financial statements issued for fiscal years beginning after December 31, 2002. The adoption of this statement did not have a material impact to the financial statements.

- 19 -

In April 2003, the FASB issued Statement No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” This statement requires that contracts with comparable characteristics be accounted for similarly. This statement is effective for contracts entered into or modified after June 30, 2003. The company will apply this guidance prospectively.

In May 2003, the FASB issued Statement No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” This statement establishes standards for classifying and measuring certain financial instruments with characteristics of both liabilities and equity. This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The company does not expect the adoption of this statement to have a material impact to the financial statements.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations are based upon the company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses as well as related disclosures. On an ongoing basis, the company evaluates its estimates and judgments based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Property and equipment: Property and equipment are depreciated or amortized on a straight-line basis over their useful lives based on management’s estimates of the period over which the assets will utilized to benefit the operations of the company. The useful lives are estimated based on historical experience with similar assets, taking into account anticipated technological or other changes. The company periodically reviews these lives relative to physical factors, economic factors and industry trends. If there are changes in the planned use of property and equipment or if technological changes were to occur more rapidly than anticipated, the useful lives assigned to these assets may need to be shortened, resulting in the recognition of increased depreciation and amortization expense in future periods.

- 20 -

Long-lived assets: Long-lived assets (including goodwill and other intangibles) are reviewed for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In assessing the recoverability of the company’s long-lived assets, the company considers changes in economic conditions and makes assumptions regarding estimated future cash flows and other factors. Estimates of future cash flows are judgments based on the company’s experience and knowledge of operations. These estimates can be significantly impacted by many factors including changes in global and local business and economic conditions, operating costs, inflation, competition, and consumer and demographic trends. If the company’s estimates or the underlying assumptions change in the future, the company may be required to record impairment charges.

Warranty: In the normal course of business the company issues product warranties for specific product lines and provides for the estimated future warranty cost in the period in which the sale is recorded. The estimate of warranty cost is based on contract terms and historical warranty loss experience that is periodically adjusted for recent actual experience. Because warranty estimates are forecasts that are based on the best available information, claims costs may differ from amounts provided. Adjustments to initial obligations for warranties are made as changes in the obligations become reasonably estimable.

Lease Obligations: In 2002 and 2001, the company established reserves associated with lease obligations for three manufacturing facilities that were exited in conjunction with manufacturing consolidation efforts related to the acquisition of Blodgett. The term of the lease associated with one of the three facilities in Williston, Vermont extends through June 2005. The terms of the leases associated with the other two facilities in Shelburne, Vermont and Quakertown, Pennsylvania extend through December 2014. The company currently has a subtenant for the Quakertown, Pennsylvania facility for a portion of the lease term. The company is actively searching for subtenants for the other two facilities. The recorded reserves are established for the future lease obligations net of an estimate for anticipated sublease income. The forecast of sublease income could differ from actual amounts, which are subject to the occupancy by a subtenant and a negotiated sublease rental rate. If the company’s estimates or underlying assumptions change in the future, the company would be required to adjust the reserve amount accordingly.

- 21 -

Litigation: From time to time, the company is subject to proceedings, lawsuits and other claims related to products, suppliers, employees, customers and competitors. The company maintains insurance to cover product liability, workers compensation, property and casualty, and general liability matters. The company is required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of accrual required, if any, for these contingencies is made after assessment of each matter and the related insurance coverage. The required accrual may change in the future due to new developments or changes in approach such as a change in settlement strategy in dealing with these matters. The company does not believe that any such matter will have a material adverse effect on its financial condition or results of operations.

Income taxes: The company operates in numerous taxing jurisdictions where it is subject to various types of tax, including sales tax and income tax. The company’s tax filings are subject to audits and adjustments. Because of the nature of the company’s operations, the nature of the audit items can be complex, and the objectives of the government auditors can result in a tax on the same transaction or income in more than one state or country. As part of the company’s calculation of the provision for taxes, the company establishes reserves for the amount that it expects to incur as a result of audits. The reserves may change in the future due to new developments related to the various tax matters.

Contractual Obligations

The company’s contractual cash payment obligations are set forth below (dollars in thousands):

	Long-term Debt		Operating Leases		Idle Facility Leases		Total Contractual Cash Obligations

Less than 1 year	$	13,500	$	622	$	1,343	$	15,465
1-3 years		26,450		885		2,560		29,895
4-5 years		41,090		542		2,225		43,857
After 5 years		—		208		7,391		7,599

	$	81,040	$	2,257	$	13,519	$	96,816

Idle facility leases consist of obligations for three manufacturing locations that were exited in conjunction with the company’s manufacturing consolidation efforts. The lease obligations continue through December 2014. The obligations presented above do not reflect any anticipated sublease income from the facilities.

- 22 -

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

The company is exposed to market risk related to changes in interest rates. The following table summarizes the maturity of the company’s debt obligations.

Twelve Month Period Ending	Fixed Rate Debt		Varible Rate Debt

	(In thousands)
June 30, 2004	$	—	$	13,500
June 30, 2005		—		13,150
June 30, 2006		—		13,300
June 30, 2007		21,040		13,350
June 30, 2008		—		6,700

	$	21,040	$	60,000

As of June 28, 2003, the company had aggregate borrowings under its senior bank facility of $59.0 million. Borrowings at June 28, 2003 under the senior bank facility included $54.2 million term loan assessed interest at floating rates of 3.0% above LIBOR and a $4.8 million term loan assessed interest at a rate of 3.75% above LIBOR. At June 28, 2003, the interest rate on the term loans were 4.24% and 4.93%, respectively. The interest rate on the $54.2 million term loan may be adjusted quarterly based on the company’s defined indebtedness ratio on a rolling four-quarter basis. The senior bank agreement also includes a $15.0 million revolving credit facility for working capital needs and a conditional $15.0 million revolving credit facility with restricted use for the repayment of notes to Maytag. Availability under the aggregate $30.0 million revolving credit facility is limited to the amount of collateral as defined by the senior bank agreement, which amounted to $21.3 million as of June 28, 2003. In addition, after giving effect to payment of notes to Maytag, if such a payment were to occur, the revolving availability is required to be greater than the revolving borrowings by at least $7.5 million. Borrowings under the revolving credit facility are assessed interest at a rate of 3.0% above LIBOR, which was 4.13% at June 28, 2003. A variable commitment fee, based upon the indebtedness ratio, of 0.5% is charged on the unused portion of the line of credit.

As of June 28, 2003 the company’s subsidiary in Spain had $1.0 million in U.S. dollar borrowings under a senior bank loan. This loan is amortized in equal monthly payments maturing on December 2003 and is assessed interest at a rate of 0.45% above LIBOR, which amounted to 1.58% at June 28, 2003.

- 23 -

As of June 28, 2003 the company had $21.0 million in notes due to Maytag. The notes due to Maytag mature in December 2006 and consist of $13.7 million in notes that bear an interest rate of 12.0% payable in cash and $7.3 million in notes that bear an interest rate of 13.5% through December 31, 2004 and 12.0% thereafter. Interest prior to December 31, 2004 on the $7.3 million in notes is paid by the issuance of additional subordinated notes in principal amounts equal to such interest payable. After December 31, 2004 interest on these notes is payable in cash, unless such payment would result in the violation of the provisions within the Senior Bank Agreement. Interest on the Maytag notes is assessed semi-annually. The notes become immediately due upon the occurrence of certain material events without the written permission of Maytag, including a change in control, a business acquisition, the acceleration of the senior bank debt, or the issuance of additional debt. The company has the ability to prepay the notes to Maytag without penalty.

The senior bank facility entered into in December 2002 requires the company to have in effect one or more interest rate protection agreements effectively fixing the interest rates on not less than $20.0 million in principal amount for a period of not less than two years and $10.0 million in principal amount for a period of not less than three years. In January 2002, the company had established an interest rate swap agreement with a notional amount of $20.0 million. This agreement swaps one-month LIBOR for a fixed rate of 4.03% and is in effect through December 31, 2004. In February 2003, the company entered into another swap agreement with a notional amount of $10.0 million that swaps one-month LIBOR for a fixed rate of 2.36% and is in effect through December 30, 2005.

The terms of the senior secured credit facility and subordinated note to Maytag limit the paying of dividends, capital expenditures and leases, and require, among other things, a minimum amount, as defined, of stockholders’ equity, and certain ratios of indebtedness and fixed charge coverage. The credit agreement also provides that if a material adverse change in the company’s business operations or conditions occurs, the lender could declare an event of default. Under terms of the agreement a material adverse effect is defined as (a) a material adverse change in, or a material adverse effect upon, the operations, business properties, condition (financial and otherwise) or prospects of the company and its subsidiaries taken as a whole; (b) a material impairment of the ability of the company to perform under the loan agreements and to avoid any event of default; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the company of any loan document. At June 28, 2003, the company was in compliance with all covenants pursuant to its borrowing agreements.

- 24 -

Financing Derivative Instruments

On January 11, 2002, in accordance with the senior bank agreement, the company entered into an interest rate swap agreement, with a notional amount of $20.0 million to fix the interest rate applicable to certain of its variable-rate debt. The agreement swaps one-month LIBOR for a fixed rate of 4.03% and is in effect through December 31, 2004. As of June 28, 2003, the fair value of this derivative financial instrument was ($0.9) million. A gain of $0.1 million was recorded in earnings for the six-month period. Since inception of the swap the company has recorded a $0.2 million loss on the swap through earnings and $0.6 million as a reduction in other comprehensive income.

On February 9, 2003 in accordance with the senior bank agreement, the company entered into another interest rate swap agreement with a notional amount of $10.0 million to fix the interest rate applicable to certain of its variable-rate debt. The agreement swaps one-month LIBOR for a fixed rate of 2.36% and is in effect through December 30, 2005. As of June 28, 2003, the fair value of this derivative financial instrument decreased by $0.2 million and has been recorded as a reduction in other comprehensive income.

- 25-

Foreign Exchange Derivative Financial Instruments

The company uses foreign currency forward purchase and sale contracts with terms of less than one year, to hedge its exposure to changes in foreign currency exchange rates. The company’s primary hedging activities are to mitigate its exposure to changes in exchange rates on intercompany and third party trade receivables and payables. The company does not currently enter into derivative financial instruments for speculative purposes. In managing its foreign currency exposures, the company identifies and aggregates naturally occurring offsetting positions and then hedges residual balance sheet exposures. The following table summarizes the forward and option purchase contracts outstanding at June 28, 2003, the fair value of which was ($0.1) million at the end of the quarter:

Sell	Purchase	Maturity

750,000 Euro	$857,500 U.S. Dollars		July 28, 2003
1,000,000 British Pounds	$1,629,400 U.S. Dollars		July 9, 2003
600,000 British Pounds	$993,600 U.S. Dollars		July 25, 2003
400,000 British Pounds	$663,500 U.S. Dollars		July 25, 2003
5,170,000 Mexican Pesos	$485,900 U.S. Dollars		July 9, 2003
6,161,400 Mexican Pesos	$580,100 U.S. Dollars		July 9, 2003
17,250,000 Taiwan Dollars	$494,700 U.S. Dollars		July 9, 2003
1,000,000,000 Korean Won	$824,900 U.S. Dollars		July 9, 2003

- 26 -

Item 4. Controls and Procedures

The company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Within 90 days prior to the date of this report, the company carried out an evaluation, under the supervision and with the participation of the company’s management, including the company’s Chief Executive Officer and the company’s Chief Financial Officer, of the effectiveness of the design and operation of the company’s disclosure controls and procedures. Based on the foregoing, the company’s Chief Executive Officer and Chief Financial Officer concluded that the company’s disclosure controls and procedures were effective.

There have been no significant changes in the company’s internal controls or in other factors that could significantly affect the internal controls subsequent to the date the company completed its evaluation.

- 27 -

PART II. OTHER INFORMATION

The company was not required to report the information pursuant to Items 1 through 6 of Part II of Form 10-Q for the three months ended June 28, 2003, except as follows:

Item 2. Changes in Securities

During the second quarter of fiscal 2003, the company issued 5,750 shares of the company’s common stock to division executives pursuant to the exercise of stock options, for $23,600.00 and $7,875.00, respectively. Such options were granted for 4,000 shares at exercise prices of $5.90 and 1,750 shares at $4.50 per share, respectively. As certificates for the shares were legended and stop transfer instructions were given to the transfer agent, the issuance of such shares was exempt under the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof and the rules and regulations thereunder, as transactions by an issuer not involving a public offering.

Item 4. Submission of Matters to a Vote of Security Holders

On May 15, 2003, the company held its 2003 Annual Meeting of Stockholders. The following persons were elected as directors to hold office until the 2004 Annual Meeting of Stockholders: Selim A. Bassoul, Robert R. Henry, A. Don Lummus, John R. Miller III, Philip G. Putnam, David P. Riley, Sabin C. Streeter, Laura B. Whitman, William F. Whitman, Jr., W. Fifield Whitman III and Robert L. Yohe. The number of shares cast for, withheld and abstained with respect to each of the nominees were as follows:

Nominee	For	Withheld	Abstained
Bassoul	6,942,717	384,494	0
Henry	6,942,717	384,494	0
Lummus	6,942,654	384,557	0
Miller	6,942,717	384,494	0
Putnam	6,942,717	384,494	0
Riley	6,942,717	384,494	0
Streeter	6,942,717	384,494	0
Whitman, L.	6,429,525	897,686	0
Whitman, W.,Jr	6,841,213	485,998	0
Whitman, W.,III	6,614,900	712,311	0
Yohe	6,942,717	384,494	0

The stockholders voted to approve the ratification of the selection of Deloitte and Touche LLP as independent auditors for the company for the fiscal year ending January 3, 2004. 7,327,161 shares were cast for such election, 50 shares were cast against such election, and 0 shares abstained.

The stockholders also voted to amend The Middleby Corporation Management 1998 Stock Incentive Plan to increase by 250,000 the number of shares available for grants. 6,417,255 shares were cast for ratification, 907,906 shares were cast against ratification and 2,050 shares abstained. There were no broker non-votes with respect to this proposals.

- 28 -

Item 6. Exhibits and Reports on Form 8-K

Exhibits – The following Exhibits are filed herewith

Exhibit 10(A) - Amendment No. 4 to Amended and Restated Employment Agreement of William F. Whitman, dated January 2, 2003

Exhibit 10(B) – Amendment No. 1 to Employment Agreement of Selim A. Bassoul, dated July 3, 2003.

Exhibit 31.1 – Rule 13a-14(a) Certification of CEO.

Exhibit 31.2 – Rule 13a-14(a) Certification of CFO.

Exhibit 31.3 – Rule 13a-14(a) Certification of CAO.

Exhibit 32.1 - Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2 - Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.3 - Certification of Principal Administrative Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Reports on Form 8-K

On May 16, 2003 (date of earliest event reported was May 16, 2003), the company filed a report on Form 8-K, in response to Item 5, Other Events, announcing the company’s management changes.

On May 28, 2003 (date of earliest event reported was May 28, 2003), the company filed a report on Form 8-K, in response to Item 5, Other Events, announcing the company’s management changes.

On July 28, 2003 (date of earliest event reported was July 28, 2003), the company filed a report on Form 8-K, in response to Item 9, Regulation FD Disclosure, announcing the company’s fiscal second quarter 2003 results.

On August 4, 2003 (date of earliest event reported was August 4, 2003), the company filed a report on Form 8-K, in response to Item 5, Other Events, announcing the company’s prepayment of notes due to Maytag Corporation.

- 29 -

SIGNATURE

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 thereunto duly authorized.

	THE MIDDLEBY CORPORATION
	(Registrant)

Date August 8, 2003	By: /s/ Timothy J. FitzGerald
	Timothy J. FitzGerald
	Vice President,
	Chief Financial Officer

- 30 -

Middleby - 10-Q quarterly report FY

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

THE MIDDLEBY CORPORATION AND SUBSIDIARIES

QUARTER ENDED JUNE 28, 2003

What is the market capitalization of a company?

DISCLAIMER

Contact

Links