**UNITED
      STATES**





**SECURITIES
      AND EXCHANGE COMMISSION**





**Washington,
      D.C. 20549**





**FORM
      10-Q**





(Mark
      One)


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





**For
      the quarterly period ended March 29, 2008**





or


o 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**
            **36-3352497**(State
                or Other Jurisdiction of
            (I.R.S.
                Employer Identification No.)Incorporation
                or Organization)





**1400
                Toastmaster Drive, Elgin, Illinois**
            **60120**(Address
                of Principal Executive Offices)
            (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 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 o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer or a smaller reporting company.
      See definition of  “accelerated filer, large accelerated filer and
      smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large
      accelerated filer x Accelerated
      filer o Non-accelerated
      filer o Smaller
      reporting company o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes o No x





As
      of May
      2, 2008, there were 16,960,896 shares of the registrant's common stock
      outstanding.










**THE
      MIDDLEBY CORPORATION AND SUBSIDIARIES**





**QUARTER
      ENDED MARCH 29, 2008**




INDEX





DESCRIPTION
            
            
            PAGEPART
                I. FINANCIAL INFORMATIONItem
                1.
            Condensed
                Consolidated Financial Statements (unaudited)CONDENSED
                CONSOLIDATED BALANCE SHEETSMarch
                29, 2008 and December 29, 2007
            
            1CONDENSED
                CONSOLIDATED STATEMENTS OF
                EARNINGSMarch
                29, 2008 and March 31, 2007
            
            2CONDENSED
                CONSOLIDATED STATEMENTS OF
                CASH FLOWSMarch
                29, 2008 and March 31, 2007
            
            3NOTES
                TO CONDENSED CONSOLIDATEDFINANCIAL
                STATEMENTS
            
            4Item
                2.
            Management's
                Discussion and Analysis of Financial Conditionand
                Results of Operations
            
            21Item
                3.
            Quantitative
                and Qualitative Disclosures About Market Risk
            
            29Item
                4.
            Controls
                and Procedures
            
            32PART
                II. OTHER INFORMATIONItem
                1A.
            Risk
                Factors
            
            33Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            33Item
                6.
            Exhibits
            
            33







**PART
      I. FINANCIAL INFORMATION**


**Item
      1. Condensed Consolidated Financial Statements**





**THE
      MIDDLEBY CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**(Amounts
      In Thousands, Except Share Data)**


**(Unaudited)**





Mar. 29, 2008
            
            Dec. 29, 2007**ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            5,518
            
            $
            7,463Accounts
                receivable, net of reserve for doubtful accounts of $6,443 and
                $5,818
            
            
            83,928
            
            
            73,090Inventories,
                net
            
            
            81,513
            
            
            66,438Prepaid
                expenses and other
            
            
            12,571
            
            
            10,341Prepaid
                taxes
            
            
            16,159
            
            
            17,986Current
                deferred taxes
            
            
            15,630
            
            
            16,643Total
                current assets
            
            
            215,319
            
            
            191,961Property,
                plant and equipment, net of accumulated depreciation of $42,339 and
                $41,114
            
            
            45,883
            
            
            36,774Goodwill
            
            
            211,612
            
            
            109,814Other
                intangibles
            
            
            125,686
            
            
            52,522Deferred
                tax assets
            
            
            5,800
            
            
            16,929Other
                assets
            
            
            2,526
            
            
            3,079Total
                assets
            
            $
            606,826
            
            $
            411,079**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                liabilities:Current
                maturities of long-term debt
            
            $
            2,661
            
            $
            2,683Accounts
                payable
            
            
            36,904
            
            
            26,576Accrued
                expenses
            
            
            84,607
            
            
            95,581Total
                current liabilities
            
            
            124,172
            
            
            124,840Long-term
                debt
            
            
            269,996
            
            
            93,514Other
                non-current liabilities
            
            
            15,472
            
            
            9,813Stockholders'
                equity:Preferred
                stock, $0.01 par value; nonvoting; 2,000,000 shares authorized; none
                issued
            
            
            —
            
            
            —Common
                stock, $0.005 par value; 47,500,000 shares authorized; 20,817,536
                and
                20,732,836 shares issued in 2008 and 2007, respectively
            
            
            120
            
            
            120Paid-in
                capital
            
            
            105,947
            
            
            104,782Treasury
                stock at cost; 3,859,913 and 3,855,044 shares in 2008 and 2007,
                respectively
            
            
            (90,014
            )
            
            (89,641
            )Retained
                earnings
            
            
            180,077
            
            
            166,896Accumulated
                other comprehensive income
            
            
            1,056
            
            
            755Total
                stockholders' equity
            
            
            197,186
            
            
            182,912Total
                liabilities and stockholders' equity
            
            $
            606,826
            
            $
            411,079





See
      accompanying notes




1




**THE
      MIDDLEBY CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF EARNINGS**


**(In
      Thousands, Except Per Share Data)**


**(** **Unaudited** **)**





**Three Months Ended****Mar. 29, 2008**
            
            **Mar. 31, 2007****Net
                sales**
            
            **$**
            **160,883**
            
            **$**
            **105,695****Cost
                of sales**
            
            
            **101,981**
            
            
            **64,590****Gross
                profit**
            
            
            **58,902**
            
            
            **41,105****Selling
                and distribution expenses**
            
            
            **16,245**
            
            
            **11,116****General
                and administrative expenses**
            
            
            **16,641**
            
            
            **11,183****Income
                from operations**
            
            
            **26,016**
            
            
            **18,806****Interest
                expense and deferred financing amortization, net**
            
            
            **3,703**
            
            
            **1,244****Other
                expense (income), net**
            
            
            **387**
            
            
            **(107**
            **)****Earnings
                before income taxes**
            
            
            **21,926**
            
            
            **17,669****Provision
                for income taxes**
            
            
            **8,745**
            
            
            **6,949****Net
                earnings**
            
            **$**
            **13,181**
            
            **$**
            **10,720****Net
                earnings per share:****Basic**
            
            **$**
            **0.82**
            
            **$**
            **0.69****Diluted**
            
            **$**
            **0.77**
            
            **$**
            **0.64****Weighted
                average number of shares****Basic**
            
            
            **16,055**
            
            
            **15,510****Dilutive
                stock options****1**
            
            
            **1,115**
            
            
            **1,230****Diluted**
            
            
            **17,170**
            
            
            **16,740**




1 There
      were no anti-dilutive stock options excluded from common stock equivalents
      for
      any period presented.





See
      accompanying notes




2


**THE
      MIDDLEBY CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(In
      Thousands)**


**(** **Unaudited** **)**





**Three Months Ended****Mar. 29, 2008**
            
            **Mar. 31, 2007****Cash
                flows from operating activities-****Net
                earnings**
            
            **$**
            **13,181**
            
            **$**
            **10,720****Adjustments
                to reconcile net earnings to cash provided by operating
                activities:****Depreciation
                and amortization**
            
            
            **3,533**
            
            
            **1,318****Deferred
                taxes**
            
            
            **2,512**
            
            
            **25****Non-cash
                share-based compensation**
            
            
            **2,350**
            
            
            **1,322****Unrealized
                loss on derivative financial instruments**
            
            
            **204**
            
            
            **—****Cash
                effects of changes in -****Accounts
                receivable, net**
            
            
            **815**
            
            
            **(2,121**
            **)****Inventories,
                net**
            
            
            **(1,558**
            **)**
            
            **(4,823**
            **)****Prepaid
                expenses and other assets**
            
            
            **3,767**
            
            
            **(697**
            **)****Accounts
                payable**
            
            
            **5,461**
            
            
            **907****Accrued
                expenses and other liabilities**
            
            
            **(17,702**
            **)**
            
            **(11,086**
            **)****Net
                cash provided by (used in) operating activities**
            
            
            **12,563**
            
            
            **(4,435**
            **)****Cash
                flows from investing activities-****Net
                additions to property and equipment**
            
            
            **(2,124**
            **)**
            
            **(598**
            **)****Acquisition
                of Star**
            
            
            **(188,068**
            **)**
            
            **—****Net
                cash (used in) investing activities**
            
            
            **(190,192**
            **)**
            
            **(598**
            **)****Cash
                flows from financing activities-****Net
                p****roceeds
                (repayments) under revolving credit facilities**
            
            
            **176,350**
            
            
            **9,450****Repayments
                under senior secured bank notes**
            
            
            **—**
            
            
            **(3,750**
            **)****Repayments
                under foreign bank loan**
            
            
            **(245**
            **)**
            
            **(1,077**
            **)****Debt
                issuance costs**
            
            
            **(162**
            **)**
            
            **—****Purchase
                of treasury stock**
            
            
            **(373**
            **)**
            
            **—****Net
                proceeds from stock issuances**
            
            
            **37**
            
            
            **925****Net
                cash provided by (used in) financing activities**
            
            
            **175,607**
            
            
            **5,548****Effect
                of exchange rates on cash and cash equivalents**
            
            
            **77**
            
            
            **4****Changes
                in cash and cash equivalents-****Net
                (decrease) increase in cash and cash equivalents**
            
            
            **(1,945**
            **)**
            
            **519****Cash
                and cash equivalents at beginning of year**
            
            
            **7,463**
            
            
            **3,534****Cash
                and cash equivalents at end of quarter**
            
            **$**
            **5,518**
            
            **$**
            **4,053****Supplemental
                disclosure of cash flow information:****Interest
                paid**
            
            **$**
            **2,359**
            
            **$**
            **1,038****Income
                tax payments**
            
            **$**
            **245**
            
            **$**
            **4,411**





See
      accompanying notes




3


**THE
      MIDDLEBY CORPORATION AND SUBSIDIARIES**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**




**March
      29, 2008**


**(** **Unaudited** **)**





**1)**
            **Summary
                of Significant Accounting
                Policies**





**A)**  **Basis
      of Presentation**





The
      condensed 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 2007 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 March
      29, 2008 and December 29, 2007, and the results of operations for the three
      months ended March 29, 2008 and March 31, 2007 and cash flows for the three
      months ended March 29, 2008 and March 31, 2007.





**B)**  **Share-Based
      Compensation**





Share-based
      compensation expense is calculated by estimating the fair value of market based
      stock awards and stock options at the time of grant and amortized over the
      stock
      options’ vesting period. Share-based compensation expense was $2.4 million and
      $1.3 million for the first quarter of 2008 and 2007, respectively.




4





**C)**  **Income
      Tax Contingencies**





In
      July
      2006, the Financial Accounting Standards Board, (“FASB”) issued Interpretation
      No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). This
      interpretation prescribes a comprehensive model for how a company should
      recognize, measure, present and disclose in its financial statements uncertain
      tax positions that the company has taken or expects to take on a tax return.
      FIN
      48 states that a tax benefit from an uncertain tax position may be recognized
      only if it is “more likely than not” that the position is sustainable, based on
      its technical merits. The tax benefit of a qualifying position is the largest
      amount of tax benefit that is greater than 50% likely of being realized upon
      settlement with a taxing authority having full knowledge of all relevant
      information. A tax benefit from an uncertain position was previously recognized
      if it was probable of being sustained. Under FIN 48, the liability for
      unrecognized tax benefits is classified as non-current unless the liability
      is
      expected to be settled in cash within 12 months of the reporting date. FIN
      48 is
      effective as of the beginning of the first fiscal year beginning after December
      15, 2006. The company adopted the provisions of FIN 48 on the first day of
      fiscal 2007 as required.





As
      of
      December 29, 2007, the total amount of liability for unrecognized tax benefits
      related to federal, state and foreign taxes was approximately $7.7 million
      plus
      approximately $1.0 million of accrued interest and $1.3 million of penalties.
      As
      of March 29, 2008, the corresponding balance of liability for unrecognized
      tax
      benefits was approximately $8.0 million plus approximately $1.0 million of
      accrued interest and $1.3 million of penalties. The company recognizes interest
      and penalties accrued related to unrecognized tax benefits in income tax
      expense, which is consistent with reporting in prior periods.





The
      company does not anticipate that total unrecognized tax benefits will
      significantly change due to any settlement of audits and the expiration of
      statute of limitations within the next twelve months.





The
      company operates in multiple taxing jurisdictions; both within the United States
      and outside of the United States, and faces audits from various tax authorities.
      The Company remains subject to examination until the statute of limitations
      expires for the respective tax jurisdiction. Within specific countries, the
      company and its operating subsidiaries may be subject to audit by various tax
      authorities and may be subject to different statute of limitations expiration
      dates. A summary of the tax years that remain subject to examination in the
      company’s major tax jurisdictions are:





United
                States – federal
            
            
            2005
                - 2007United
                States – states
            
            
            2001
                - 2007China
            
            
            2006
                - 2007Denmark
            
            
            2006
                - 2007Mexico
            
            
            2006
                - 2007Philippines
            
            
            2004
                - 2007South
                Korea
            
            
            2004
                - 2007Spain
            
            
            2005
                - 2007Taiwan
            
            
            2005
                - 2007United
                Kingdom
            
            
            2006
                - 2007




5




**D)**  **Fair
      Value Measures**





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      (“SFAS”) No. 157 “Fair Value Measurements”. This statement defines fair value,
      establishes a framework for measuring fair value in general accepted accounting
      principles and expands disclosure about fair value measurements. This statement
      is effective for interim reporting periods in fiscal years beginning after
      November 15, 2007. The company adopted SFAS No. 157 on December 30, 2007 (first
      day of fiscal year 2008). The adoption of SFAS No. 157 did not have a material
      impact on the financial statements.




FASB
      Staff Position No. FAS 157-2, “Effective Date
      of FASB
      Statement No. 157”
delays
      the effective
      date of the application of SFAS No. 157 to fiscal years beginning after November
      15, 2008 for all nonfinancial assets and nonfinancial liabilities that are
      recognized or disclosed at fair value in the financial statements on a
      non-recurring basis. The company adopted SFAS No. 157 with the exception of
      the
      application of the statement to non-recurring nonfinancial assets and
      liabilities. Non-recurring nonfinancial assets and nonfinancial liabilities
      for
      which the company has not applied the provisions of SFAS No. 157 primarily
      include those measured at fair value in goodwill and long-lived asset impairment
      testing, those initially measured at fair value in a business combination,
      and
      nonfinancial liabilities for exit or disposal activities.





SFAS
      No.
      157 defines fair value as the price that would be received for an asset or
      paid
      to transfer a liability (an exit price) in the principal most advantageous
      market for the asset or liability in an orderly transaction between market
      participants on the measurement date. SFAS No. 157 establishes a fair value
      hierarchy, which prioritizes the inputs used in measuring fair value into the
      following levels:





Level
      1 –
Quoted prices in active markets for identical assets or liabilities


Level
      2 –
Inputs, other than quoted prices in active markets, that are observable either
      directly or indirectly.


Level
      3 –
Unobservable inputs based on assumptions.





The
      company’s financial assets that are measured at fair value on a recurring basis
      are categorized using the fair value hierarchy and liabilities at March 29,
      2008
      are as follows (in thousands):





Fair
                Value
            
            Fair
                Value
            
            Fair
                ValueLevel
                1
            
            Level
                2
            
            Level
                3
            
            TotalFinancial
                Assets:None
            
            
            —
            
            
            —
            
            
            —
            
            
            —Financial
                Liabilities:Interest
                rate swaps
            
            
            —
            
            $
            1,353
            
            
            —
            
            $
            1,353





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities – Including an amendment of FASB
      Statement No. 115. This statement permits entities to choose to measure many
      financial instruments and certain other items at fair value. This statement
      is
      effective for fiscal years beginning after November 15, 2007. The adoption
      of
      SFAS No. 159 did not have a material impact on the financial statements. Upon
      adoption, the company has not elected to apply SFAS No. 159 to measure selected
      financial instruments and certain other items; therefore, there was no impact
      to
      the financial statements upon adoption. Subsequent to the initial adoption
      of
      SFAS No. 159, the company has not made any elections during the three months
      ended March 29, 2008.





6





**2)**
            **Acquisitions
                and Purchase Accounting**





*Jade*





On
      April
      1, 2007, the company completed its acquisition of the assets and operations
      of
      Jade Products Company (“Jade”), a leading manufacturer of commercial and
      residential cooking equipment from Maytag Corporation ("Maytag") for an
      aggregate purchase price of $7.4 million in cash plus transaction expenses.
      The
      purchase price is subject to adjustment based upon a working capital provision
      within the purchase agreement.





The
      company has accounted for this business combination using the purchase method
      to
      record a new cost basis for the assets acquired and liabilities assumed. The
      difference between the purchase price and the fair value of the assets acquired
      and liabilities assumed has been recorded as goodwill in the financial
      statements. The allocation of the purchase price to the assets, liabilities
      and intangible assets is under review and is subject to change based upon
      finalization of the valuation of the assets and liabilities
      acquired.





The
      preliminary allocation of cash paid for the Jade acquisition is summarized
      as follows (in thousands):





Apr. 1, 2007
            
            Adjustments
            
            Mar. 29, 2008Current
                assets
            
            $
            6,727
            
            $
            217
            
            $
            6,944Property,
                plant and equipment
            
            
            2,029
            
            
            (172
            )
            
            1,857Goodwill
            
            
            250
            
            
            (250
            )
            
            —Other
                intangibles
            
            
            1,590
            
            
            (135
            )
            
            1,455Deferred
                tax assets
            
            
            —
            
            
            841
            
            
            841Current
                liabilities
            
            
            (3,205
            )
            
            (113
            )
            
            (3,318
            )Total
                cash paid
            
            $
            7,391
            
            $
            388
            
            $
            7,779




Other
      intangibles of $1.3 million associated with the trade name, are subject to
      the
      non-amortization provisions of SFAS No. 142, “Goodwill and Other Intangible
      Assets”, from the date of acquisition. Other intangibles of $0.2 million
      allocated to customer relationships are to be amortized over a periods of 10
      years. Goodwill and other intangibles of Jade are allocated to the Commercial
      Foodservice Equipment Group for segment reporting purposes. These assets are
      expected to be deductible for tax purposes.





*Carter-Hoffmann*





On
      June
      29, 2007, the company completed its acquisition of the assets and operations
      of
      Carter-Hoffmann (“Carter-Hoffmann”), a leading manufacturer of commercial
      cooking and warming equipment, from Carrier Commercial Refrigeration
      Inc., a
      subsidiary of Carrier Corporation, which is a unit of United Technologies
      Corporation, for
      an
      aggregate purchase price of $15.9 million in cash plus transaction expenses.





The
      company has accounted for this business combination using the purchase method
      to
      record a new cost basis for the assets acquired and liabilities assumed. The
      difference between the purchase price and the fair value of the assets acquired
      and liabilities assumed has been recorded as goodwill in the financial
      statements. The allocation of the purchase price to the assets, liabilities
      and
      intangible assets is under review and is subject to change based upon
      finalization of the valuation of the assets and liabilities acquired.




7





The
      preliminary allocation of cash paid for the Carter-Hoffmann acquisition is
      summarized as follows (in thousands):





Jun.
                29, 2007
            
            Adjustments
            
            Mar.
                29, 2008Current
                assets
            
            $
            7,912
            
            $
            (795
            )
            $
            7,117Property,
                plant and equipment
            
            
            2,264
            
            
            —
            
            
            2,264Goodwill
            
            
            9,452
            
            
            (6,950
            )
            
            2,502Other
                intangibles
            
            
            —
            
            
            3,910
            
            
            3,910Deferred
                tax assets
            
            
            —
            
            
            4,199
            
            
            4,199Current
                liabilities
            
            
            (3,646
            )
            
            (50
            )
            
            (3,696
            )Other
                non-current liabilities
            
            
            (54
            )
            
            —
            
            
            (54
            )Total
                cash paid
            
            $
            15,928
            
            $
            314
            
            $
            16,242





The
      goodwill and $2.3 million of other intangibles associated with the trade name
      are subject to the non-amortization provisions of SFAS No. 142. Other
      intangibles also includes $1.6 million allocated to customer relationships
      are
      to be amortized over a period of 4 years. Goodwill and other intangibles of
      Carter-Hoffmann are allocated to the Commercial Foodservice Equipment Group
      for
      segment reporting purposes. These assets are expected to be deductible for
      tax
      purposes.





*MP
      Equipment*





On
      July
      2, 2007, the company completed its acquisition of the assets and operations
      of
      MP Equipment (“MP Equipment”), a leading manufacturer of food processing
      equipment for a purchase price of $15.0 million in cash plus transaction
      expenses. An additional deferred payment of $2.0 million is also due to the
      seller at the earlier of three years or upon the achievement of reaching certain
      profit targets. An additional contingent payment of $1.0 million is also payable
      if the business reaches certain target profits.





The
      company has accounted for this business combination using the purchase method
      to
      record a new cost basis for the assets acquired and liabilities assumed. The
      difference between the purchase price and the fair value of the assets acquired
      and liabilities assumed has been recorded as goodwill in the financial
      statements. The allocation of the purchase price to the assets, liabilities
      and
      intangible assets is under review and is subject to change based upon
      finalization of the valuation of the assets and liabilities acquired.





The
      preliminary allocation of cash paid for the MP Equipment acquisition is
      summarized as follows (in thousands):





Jul. 2, 2007
            
            Adjustments
            
            Mar. 29, 2008Current
                assets
            
            $
            5,315
            
            $
            114
            
            $
            5,429Property,
                plant and equipment
            
            
            297
            
            
            —
            
            
            297Goodwill
            
            
            9,290
            
            
            (4,682
            )
            
            4,608Other
                intangibles
            
            
            6,420
            
            
            (770
            )
            
            5,650Deferred
                tax assets
            
            
            —
            
            
            5,414
            
            
            5,414Other
                assets
            
            
            16
            
            
            —
            
            
            16Current
                liabilities
            
            
            (4,018
            )
            
            —
            
            
            (4,018
            )Other
                non-current liabilities
            
            
            (2,127
            )
            
            —
            
            
            (2,127
            )Total
                cash paid
            
            $
            15,193
            
            $
            76
            
            $
            15,269





8





The
      goodwill and $3.3 million of other intangibles associated with the trade name
      are subject to the non-amortization provisions of SFAS No. 142. Other
      intangibles also includes $0.3 million allocated to backlog, $0.3 million
      allocated to developed technology and $1.8 million allocated to customer
      relationships which are to be amortized over periods of 6 months, 5 years and
      5
      years, respectively. Goodwill and other intangibles of MP Equipment are
      allocated to the Food Processing Equipment Group for segment reporting purposes.
      These assets are expected to be deductible for tax purposes.





*Wells
      Bloomfield*





On
      August
      3, 2007, the company completed its acquisition of the assets and operations
      of
      Wells Bloomfield (“Wells Bloomfield”), a leading manufacturer of commercial
      cooking and beverage equipment from Carrier Commercial Refrigeration
      Inc., a
      subsidiary of Carrier Corporation, which is a unit of United Technologies
      Corporation, for
      an
      aggregate purchase price of $28.4 million in cash plus transaction expenses.





The
      company has accounted for this business combination using the purchase method
      to
      record a new cost basis for the assets acquired and liabilities assumed. The
      difference between the purchase price and the fair value of the assets acquired
      and liabilities assumed has been recorded as goodwill in the financial
      statements. The allocation of the purchase price to the assets, liabilities
      and
      intangible assets is under review and is subject to change based upon
      finalization of the valuation of the assets and liabilities acquired.




The
      preliminary allocation of cash paid for the Wells Bloomfield acquisition is
      summarized as follows (in thousands):





Aug. 3, 2007
            
            Adjustments
            
            Mar. 29, 2008Cash
            
            $
            2
            
            $
            —
            
            $
            2Current
                assets
            
            
            15,133
            
            
            1,226
            
            
            16,359Property,
                plant and equipment
            
            
            3,961
            
            
            (5
            )
            
            3,956Goodwill
            
            
            5,835
            
            
            (4,965
            )
            
            870Other
                intangibles
            
            
            8,130
            
            
            (200
            )
            
            7,930Deferred
                tax assets
            
            
            —
            
            
            5,579
            
            
            5,579Other
                assets
            
            
            21
            
            
            —
            
            
            21Current
                liabilities
            
            
            (4,277
            )
            
            (1,534
            )
            
            (5,811
            )Total
                cash paid
            
            $
            28,805
            
            $
            101
            
            $
            28,906





The
      goodwill and $5.5 million of other intangibles associated with the trade name
      are subject to the non-amortization provisions of SFAS No. 142. Other
      intangibles of $2.4 million allocated to customer relationships are to be
      amortized over a period of 4 years. Goodwill and other intangibles of Wells
      Bloomfield are allocated to the Commercial Foodservice Equipment Group for
      segment reporting purposes. These assets are expected to be deductible for
      tax
      purposes.




9





*Star*





On
      December 31, 2007, subsequent to the company’s fiscal 2007 year end, the company
      acquired the stock of New Star International Holdings, Inc. and subsidiaries
      (“Star”), a leading manufacturer of commercial cooking for an aggregate purchase
      price of $188.4 million in cash plus transaction expenses. The purchase price
      is
      subject to adjustment based upon a working capital provision within the purchase
      agreement.





The
      company has accounted for this business combination using the purchase method
      to
      record a new cost basis for the assets acquired and liabilities assumed. The
      difference between the purchase price and the fair value of the assets acquired
      and liabilities assumed has been recorded as goodwill in the financial
      statements. The allocation of the purchase price to the assets, liabilities
      and
      intangible assets is under review and is subject to change based upon
      finalization of the valuation of the assets and liabilities acquired.





The
      preliminary allocation of cash paid for the Star acquisition is summarized
      as
      follows (in thousands):





Mar. 29, 2008Cash
            
            $
            376Current
                assets
            
            
            27,783Property,
                plant and equipment
            
            
            8,225Goodwill
            
            
            101,365Other
                intangibles
            
            
            75,150Other
                assets
            
            
            71Current
                liabilities
            
            
            (11,394
            )Deferred
                tax liability
            
            
            (8,837
            )Other
                non-current liabilities
            
            
            (4.295
            )Total
                cash paid
            
            $
            188,444





The
      goodwill and $47.0 million of other intangibles associated with the trade name
      are subject to the non-amortization provisions of SFAS No. 142. Other
      intangibles also includes $0.4 million allocated to backlog, $3.8 million
      allocated to developed technology and $24.0 million allocated to customer
      relationships which are to be amortized over periods of 1 month, 7 years and
      7
      years, respectively. Goodwill and other intangibles of Star are allocated to
      the
      Commercial Foodservice Equipment Group for segment reporting purposes. These
      assets are not expected to be deductible for tax purposes.





**3)**
            **Stock
                Split**




On
      May 3,
      2007, the company’s Board of Directors authorized a two-for-one split of the
      company’s common stock in the form of a stock dividend. The stock dividend was
      paid on June 15, 2007 to company shareholders of record as of June 1, 2007.
      The
      company’s common stock began trading on a split-adjusted basis on June 18, 2007.
      All references in the accompanying condensed consolidated financial statements
      and notes thereto to net earnings per share and the number of shares have been
      adjusted to reflect this stock split.




10





**4)**
            **Litigation
                Matters**




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 partially 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 reserve requirement 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 pending
      litigation will have a material adverse effect on its financial condition,
      results of operations or cash flows of the company.





**5)**
            **Recently
                Issued Accounting
                Standards**




In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities – Including an amendment of FASB
      Statement No. 115. This statement permits entities to choose to measure many
      financial instruments and certain other items at fair value. This statement
      is
      effective for fiscal years beginning after November 15, 2007. The adoption
      of
      SFAS No. 159 did not have a material impact on the financial
      statements.




In
      December 2007, the FAS issued SFAS No. 141R, “Business Combinations”. This
      statement provides companies with principles and requirements on how an acquirer
      recognizes and measures in its financial statements the identifiable assets
      acquired, liabilities assumed, and any noncontrolling interest in the acquiree
      as well as the recognition and measurement of goodwill acquired in a business
      combination. This statement also requires certain disclosures to enable users
      of
      the financial statements to evaluate the nature and financial effects of the
      business combination. Acquisition costs associated with the business combination
      will generally be expensed as incurred. This statement is effective for business
      combinations occurring in fiscal years beginning after December 15, 2008.
      Early adoption of FASB Statement No. 141R is not permitted. The company is
      evaluating the impact the application of this guidance will have on the
      company’s financial position, results of operations and cash flows.




11


In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements – an amendment of ARB No. 51”. This statement
      amends ARB 51 to establish accounting and reporting standards for the
      noncontrolling interest (minority interest) in a subsidiary and for the
      deconsolidation of a subsidiary. Upon its adoption, effective as of the
      beginning of the company’s 2009 fiscal year, noncontrolling interests will be
      classified as equity in the company’s financial statements and income and
      comprehensive income attributed to the noncontrolling interest will be included
      in the company’s income and comprehensive income. The provisions of this
      standard must be applied retrospectively upon adoption. The company does not
      anticipate that the adoption of SFAS No. 160 will have a material impact on
      its
      financial statements. The Company will adopt this statement for acquisitions
      consummated after the statements effective date.





In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities—an amendment of FASB Statement No. 133.” This statement
      amends SFAS No. 133 to require enhanced disclosures about an entity’s derivative
      and hedging activities. This Statement is effective for financial statements
      issued for fiscal years and interim periods beginning after November 15, 2008,
      with early application encouraged. The company is evaluating the impact the
      application of this guidance will have on the company’s financial position,
      results of operations and cash flows.





**6)**
            **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 EndedMar. 29, 2008
            
            Mar. 31, 2007Net
                earnings
            
            $
            13,181
            
            $
            10,720Currency
                translation adjustment
            
            
            845
            
            
            32Unrealized
                loss oninterest
                rate swaps, net of tax
            
            
            (544
            )
            
            (136
            )Comprehensive
                income
            
            $
            13,482
            
            $
            10,616





Accumulated
      other comprehensive income is comprised of minimum pension liability of $(0.9)
      million, net of taxes of $(0.6) million, as of March 29, 2008 and December
      29,
      2007, foreign currency translation adjustments of $2.5 million as of March
      29,
      2008 and $1.7 million as of December 29, 2007, and an unrealized loss on
      interest rate swaps of $0.5 million, net of taxes of $0.4 million, as of March
      29, 2008.





12


**7)**
            **Inventories**





Inventories
      are composed of material, labor and overhead and are stated at the lower of
      cost
      or market. Costs for inventory at two of the company's manufacturing facilities
      have been determined using the last-in, first-out ("LIFO") method. These
      inventories under the LIFO method amounted to $16.6 million at March 29, 2008
      and $16.4 million at December 29, 2007 and represented approximately 20% and
      25%
      of the total inventory in each respective period. Costs for all other inventory
      have been determined using the first-in, first-out ("FIFO") method. The company
      estimates reserves for inventory obsolescence and shrinkage based on its
      judgment of future realization. Inventories at March 29, 2008 and December
      29,
      2007 are as follows:




Mar. 29, 2008
            
            Dec. 29, 2007(in thousands)Raw
                materials and parts
            
            $
            24,882
            
            $
            25,047Work-in-process
            
            
            20,426
            
            
            11,033Finished
                goods
            
            
            36,616
            
            
            30,66981,924
            
            
            66,749LIFO
                adjustment
            
            
            (411
            )
            
            (311
            )$
            81,513
            
            $
            66,438




**8)**
            **Accrued
                Expenses**





Accrued
      expenses consist of the following:





Mar. 29, 2008
            
            Dec, 29, 2007(in thousands)Accrued
                payroll and related expenses
            
            $
            13,707
            
            $
            21,448Accrued
                warranty
            
            
            13,326
            
            
            12,276Accrued
                customer rebates
            
            
            8,970
            
            
            16,326Advance
                customer deposits
            
            
            7,948
            
            
            7,971Accrued
                product liability and workers comp
            
            
            7,946
            
            
            6,978Other
                accrued expenses
            
            
            32,710
            
            
            30,582$
            84,607
            
            $
            95,581





13




**9)**
            **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.





A
      rollforward of the warranty reserve is as follows:





Three Months EndedMar. 29, 2008(in thousands)Beginning
                balance
            
            $
            12,276Warranty
                reserve related to acquisitions
            
            
            1,030Warranty
                expense
            
            
            3,625Warranty
                claims
            
            
            (3,605
            )Ending
                balance
            
            $
            13,326




**10)**
            **Financing
                Arrangements**





Mar. 29, 2008
            
            Dec. 29, 2007(in thousands)Senior
                secured revolving credit line
            
            $
            267,700
            
            $
            91,350Foreign
                loan
            
            
            4,957
            
            
            4,847Total
                debt
            
            $
            272,657
            
            $
            96,197Less:
                Current maturities of long-term debt
            
            
            2,661
            
            
            2,683Long-term
                debt
            
            $
            269,996
            
            $
            93,514




During
      the fourth quarter of 2007 the company entered into a new senior secured credit
      facility. Terms of the senior credit agreement provide for $450.0 million of
      availability under a revolving credit line. As of March 29, 2008, the company
      had $267.7 million of borrowings outstanding under this facility. The company
      also has $4.1 million in outstanding letters of credit, which reduces the
      borrowing availability under the revolving credit line.





Borrowings
      under the senior secured credit facility are assessed at an interest rate at
      1.25% above LIBOR for long-term borrowings or at the higher of the Prime rate
      and the Federal Funds Rate. At March 29, 2008 the average interest rate on
      the
      senior debt amounted to 4.21%. The interest rates on borrowings under the senior
      bank facility may be adjusted quarterly based on the company’s defined
      indebtedness ratio on a rolling four-quarter basis. Additionally, a commitment
      fee, based upon the indebtedness ratio is charged on the unused portion of
      the
      revolving credit line. This variable commitment fee amounted to 0.25% as of
      March 29, 2008.





14





In
      August
      2006, the company completed its acquisition of Houno A/S in Denmark. This
      acquisition was funded in part with locally established debt facilities with
      borrowings in Danish Krone.  On March 29, 2008 these facilities amounted to
      $5.0 million in US dollars, including $2.6 million outstanding under a revolving
      credit facility and $2.4 million of a term loan.  The interest rate on the
      revolving credit facility is assessed at 1.25% above Euro LIBOR, which amounted
      to 5.41% on March 29, 2008. The term loan matures in 2013 and the interest
      rate
      is assessed at 5.62%.





The
      company has historically entered into interest rate swap agreements to
      effectively fix the interest rate on its outstanding debt. The agreements swap
      one-month LIBOR for fixed rates. As of March 29, 2008 the company had the
      following interest rate swaps in effect:





**Fixed****Notional**
            
            **Interest**
            
            **Effective**
            
            **Maturity****Amount**
            
            **Rate**
            
            **Date**
            
            **Date**$ 
                10,000,000
            
            
            5.030
            %
            
            03/03/06
            
            
            12/21/09$  10,000,000
            
            
            2.520
            %
            
            2/13/2008
            
            
            2/19/2009$  20,000,000
            
            
            2.635
            %
            
            2/6/2008
            
            
            2/6/2009$  25,000,000
            
            
            3.350
            %
            
            1/14/2008
            
            
            1/14/2010$  10,000,000
            
            
            2.920
            %
            
            2/1/2008
            
            
            2/1/2010$  10,000,000
            
            
            2.785
            %
            
            2/6/2008
            
            
            2/6/2010$  10,000,000
            
            
            3.033
            %
            
            2/6/2008
            
            
            2/6/2011$  10,000,000
            
            
            2.820
            %
            
            2/1/2008
            
            
            2/1/2009




The
      terms
      of the senior secured credit facility limit the paying of dividends, capital
      expenditures and leases, and require, among other things, 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. A material adverse
      effect is determined on a subjective basis by the company's creditors. The
      credit facility is secured by the capital stock of the company’s domestic
      subsidiaries, 65% of the capital stock of the company’s foreign subsidiaries and
      substantially all other assets of the company. At March 29, 2008, the company
      was in compliance with all covenants pursuant to its borrowing
      agreements.





15




**11)**
            **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
      March 29, 2008 the company had no forward contracts outstanding.





The
      company has entered into interest rate swaps to fix the interest rate applicable
      to certain of its variable-rate debt. The agreements swap one-month LIBOR for
      a
      fixed rates. The company has designated these swaps as cash flow hedges and
      all
      changes in fair value of the swaps are recognized in accumulated other
      comprehensive income. As of March 29, 2008, the fair value of these instruments
      was $1.4 million. The change in fair value of these swap agreements in the
      first
      three months of 2008 was a loss of $0.5 million, net of taxes.





**Fixed**
            
            
            
            
            
            
            
            **Changes****Notional**
            
            **Interest**
            
            **Effective**
            
            **Maturity**
            
            **Fair Value**
            
            **In Fair Value****Amount**
            
            **Rate**
            
            **Date**
            
            **Date**
            
            **Mar. 29, 2008**
            
            **(net of taxes)**$   
                10,000,000
            
            
            5.030
            %
            
            03/03/06
            
            
            12/21/09
            
            $
            (462,000
            )
            $
            (9,000
            )1$   
                10,000,000
            
            
            2.520
            %
            
            2/13/2008
            
            
            2/19/2009
            
            $
            (28,000
            )
            $
            (17,000
            )$   
                20,000,000
            
            
            2.635
            %
            
            2/6/2008
            
            
            2/6/2009
            
            $
            (65,000
            )
            $
            (39,000
            )$   
                25,000,000
            
            
            3.350
            %
            
            1/14/2008
            
            
            1/14/2010
            
            $
            (464,000
            )
            $
            (278,000
            )$   
                10,000,000
            
            
            2.920
            %
            
            2/1/2008
            
            
            2/1/2010
            
            $
            (106,000
            )
            $
            (64,000
            )$   
                10,000,000
            
            
            2.785
            %
            
            2/6/2008
            
            
            2/6/2010
            
            $
            (47,000
            )
            $
            (28,000
            )$   
                10,000,000
            
            
            3.033
            %
            
            2/6/2008
            
            
            2/6/2011
            
            $
            (81,000
            )
            $
            (49,000
            )$   
                10,000,000
            
            
            2.820
            %
            
            2/1/2008
            
            
            2/1/2009
            
            $
            (100,000
            )
            $
            (60,000
            )





1
            Previous
                to the fiscal quarter ended March 29, 2008, this swap had not been
                designated as an effective cash flow hedge. The swap was designated
                as an
                effective cash flow hedge during the quarter ended March 29, 2008.
                In
                accordance with SFAS No. 133, the net reduction of $0.2 million in
                the
                fair value of this swap prior to the designation date has been recorded
                as
                a loss in earnings for the first quarter
                2008.





16




**12)**
            **Segment
                Information**





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





The
      Commercial Foodservice Equipment business group manufactures cooking equipment
      for the restaurant and institutional kitchen industry. This business segment
      has
      manufacturing facilities in California, Illinois, Michigan, Missouri, Nevada,
      New Hampshire, North Carolina, Tennessee, Vermont, Denmark and the Philippines. The
      Commercial Foodservice Equipment group manufactures conveyor ovens, convection
      ovens, fryers, ranges, toasters, combi ovens, steamers, broilers, deck ovens,
      baking ovens, proofers, beverage systems and beverage dispensing equipment,
      counter-top cooking and warming equipment. This business segment’s principal
      product lines include Middleby Marshall® and CTX® conveyor oven equipment,
      Blodgett® convection ovens, conveyor ovens, deck oven equipment, Blodgett Combi®
cooking equipment, Blodgett Range® ranges, Nu-Vu® baking ovens and proofers,
      Pitco Frialator® fryer equipment, Southbend® ranges, convection ovens and
      heavy-duty cooking equipment, Toastmaster® toasters and counterline cooking and
      warming equipment, Jade Range® ranges and ovens, Carter Hoffmann® warming,
      holding and transporting equipment, Bloomfield® beverage systems and beverage
      dispensing equipment, Wells® convection
      ovens, counterline cooking equipment and ventless cooking systems, Star®
light duty cooking equipment, Holman® toasting equipment, Lang® ovens and
      ranges, Houno® combi-ovens and baking ovens and MagiKitch'n® charbroilers and
      catering equipment.





The
      Food
      Processing Equipment business group manufactures cooking and packaging equipment
      for the food processing industry. This business segment has manufacturing
      facilities in Georgia and Wisconsin. Its principal products include
      Alkar ® batch
      ovens, conveyorized ovens and continuous process ovens, RapidPak ® food
      packaging machinery and MP Equipment ® breading, battering, mixing, forming, and slicing equipment.





The
      International Distribution Division provides integrated sales, export
      management, distribution and installation services through its operations in
      China, India, Lebanon, Mexico, the Philippines, Russia, South Korea, Spain,
      Sweden, 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 chief decision maker evaluates
      individual segment performance based on operating income. Management believes
      that intersegment sales are made at established arms-length transfer
      prices.





17




**Net
      Sales Summary**


**(dollars
      in thousands)**





Three Months EndedMar. 29, 2008
            
            Mar. 31, 2007Sales
            
            Percent
            
            Sales
            
            PercentBusiness
                Divisions:Commercial
                Foodservice
            
            $
            134,016
            
            
            83.3
            
            $
            90,539
            
            
            85.7Food
                Processing
            
            
            19,888
            
            
            12.4
            
            
            12,196
            
            
            11.5International
                Distribution(1)
            
            
            15,793
            
            
            9.8
            
            
            13,576
            
            
            12.8Intercompany
                sales (2)
            
            
            (8,814
            )
            
            (5.5
            )
            
            (10,616
            )
            
            (10.0
            )Total
            
            $
            160,883
            
            
            100.0
            %
            $
            105,695
            
            
            100.0
            %




*(1)*
            *Consists
                of sales of products manufactured by Middleby and products**manufactured
                by third parties.*





*(2)*
            *Represents
                the elimination of sales from the Commercial Foodservice Equipment
                Group
                to the International**Distribution
                Division**.*




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





Commercial
            
            Food
            
            International
            
            CorporateFoodservice
            
            Processing
            
            Distribution
            
            and
                Other(2)
            
            Eliminations(3)
            
            Total**Three
                months ended March 29, 2008**Net
                sales
            
            $
            134,016
            
            $
            19,888
            
            $
            15,793
            
            $
            —
            
            $
            (8,814
            )
            $
            160,883Operating
                income
            
            
            30,547
            
            
            2,789
            
            
            1,074
            
            
            (8,442
            )
            
            48
            
            
            26,016Depreciation
                expense
            
            
            1,269
            
            
            104
            
            
            52
            
            
            37
            
            
            —
            
            
            1,462Net
                capital expenditures
            
            
            1,899
            
            
            51
            
            
            152
            
            
            22
            
            
            —
            
            
            2,124Total
                assets
            
            
            475,583
            
            
            68,202
            
            
            29,887
            
            
            43,634
            
            
            (10,480
            )
            
            606,826Long-lived
                assets(4)
            
            
            335,317
            
            
            37,766
            
            
            713
            
            
            17,711
            
            
            —
            
            
            391,507**Three
                months ended March 31, 2007**Net
                sales
            
            $
            90,539
            
            $
            12,196
            
            $
            13,576
            
            $
            —
            
            $
            (10,616
            )
            $
            105,695Operating
                income
            
            
            21,788
            
            
            2,400
            
            
            846
            
            
            (6,282
            )
            
            54
            
            
            18,806Depreciation
                expense
            
            
            695
            
            
            127
            
            
            43
            
            
            36
            
            
            —
            
            
            901Net
                capital expenditures
            
            
            520
            
            
            6
            
            
            11
            
            
            61
            
            
            —
            
            
            598Total
                assets
            
            
            217,440
            
            
            49,241
            
            
            29,430
            
            
            1,985
            
            
            (6,523
            )
            
            291,573Long-lived
                assets(4)
            
            
            129,492
            
            
            27,736
            
            
            433
            
            
            8,878
            
            
            —
            
            
            166,539




*(1)*
                *Non-operating
                    expenses are not allocated to the operating segments. Non-operating
                    expenses consist of interest expense**and
                    deferred financing amortization, foreign exchange gains and losses
                    and
                    other income and expense 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 Commercial Foodservice Equipment Group to the International
                Distribution Division.*





*(4)*
            *Long-lived
                assets of the Commercial Foodservice Equipment Group includes assets
                located in the Philippines which amounted to $1,907**and
                $1,975 in first quarter 2008 and 2007, respectively and assets located
                in
                Denmark which amounted to $2,625 and $1,042 in first quarter 2008
                and
                2007, respectively.*




18




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




Three Months EndedMar. 29, 2008
            
            Mar. 31, 2007United
                States and Canada
            
            $
            132,953
            
            $
            86,032Asia
            
            
            7,152
            
            
            5,473Europe
                and Middle East
            
            
            16,371
            
            
            10,777Latin
                America
            
            
            4,407
            
            
            3,413Net
                sales
            
            $
            160,883
            
            $
            105,695




**13)**
            **Employee
                Retirement Plans**





*(a)*  *Pension
      Plans*





The
      company maintains a non-contributory defined benefit plan for its union
      employees at the Elgin, Illinois facility. Benefits are determined based upon
      retirement age and years of service with the company. This defined benefit
      plan
      was frozen on April 30, 2002 and no further benefits accrue to the participants
      beyond this date. Plan participants will receive or continue to receive payments
      for benefits earned on or prior to April 30, 2002 upon reaching retirement
      age.
      The employees participating in the defined benefit plan were enrolled in a
      newly
      established 401K savings plan on September 30, 2002, further described below.





The
      company also maintains a retirement benefit agreement with its Chairman. The
      retirement benefits are based upon a percentage of the Chairman’s final base
      salary. Additionally, the company maintains a retirement plan for non-employee
      directors. The plan provides for an annual benefit upon a change in control
      of
      the company or retirement from the Board of Directors at age 70, equal to 100%
      of the director’s last annual retainer, payable for a number of years equal to
      the director’s years of service up to a maximum of 10 years.





Contributions
      under the union plan are funded in accordance with provisions of The Employee
      Retirement Income Security Act of 1974. There are no contributions expected
      to
      be made in 2008. Contributions to the directors' plan are based upon actual
      retirement benefits as they retire.




*(b)*  *401K
      Savings Plans*





The
      company maintains two separate defined contribution 401K savings plans covering
      all employees in the United States. These two plans separately cover the union
      employees at the Elgin, Illinois facility and all other remaining union and
      non-union employees in the United States. The company makes profit sharing
      contributions to the various plans in accordance with the requirements of the
      plan. Profit sharing contributions for the Elgin Union 401K savings plans are
      made in accordance with the agreement.




19




**14)**
            **Subsequent
                Events**





On
      April
      22, 2008, the company completed its acquisition of Giga Grandi Cucine, S.r.l
      for
      12.9 Euro including 6.2 million Euro paid in cash at closing, 3.4 million of
      deferred payments due to the sellers, and 3.3 million Euro in assumed debt.
      Giga
      is a leading European manufacturer of a broad line of commercial cooking
      equipment, including ranges, ovens and steam cooking equipment.





On
      April
      23, 2008, the company completed its acquisition of the net assets and related
      business operations of FriFri aro SA from the Franke Group. FriFri is a leading
      European manufacturer of frying systems.




20


**Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of
      Operations.**





**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;
      ability to protect trademarks, copyrights and other intellectual property;
      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 Securities and Exchange Commission filings,
      including the company’s 2007 Annual Report on Form 10-K.




21




**Net
      Sales Summary**


**(dollars
      in thousands)**





Three Months EndedMar. 29, 2008
            
            Mar. 31, 2007Sales
            
            Percent
            
            Sales
            
            PercentBusiness
                Divisions:Commercial
                Foodservice
            
            $
            134,016
            
            
            83.3
            
            $
            90,539
            
            
            85.7Food
                Processing
            
            
            19,888
            
            
            12.4
            
            
            12,196
            
            
            11.5International
                Distribution(1)
            
            
            15,793
            
            
            9.8
            
            
            13,576
            
            
            12.8Intercompany
                sales (2)
            
            
            (8,814
            )
            
            (5.5
            )
            
            (10,616
            )
            
            (10.0
            )Total
            
            $
            160,883
            
            
            100.0
            %
            $
            105,695
            
            
            100.0
            %




*(1)*
            *Consists
                of sales of products manufactured by Middleby and products**manufactured
                by third parties.*





*(2)*
            *Represents
                the elimination of sales**from
                the Commercial Foodservice Equipment Group to the**International
                Distribution Division.*





**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 EndedMar. 29, 2008
            
            Mar. 31, 2007Net
                sales
            
            
            100.0
            %
            
            100.0
            %Cost
                of sales
            
            
            63.4
            
            
            61.1Gross
                profit
            
            
            36.6
            
            
            38.9Selling,
                general and administrative expenses
            
            
            20.4
            
            
            21.1Income
                from operations
            
            
            16.2
            
            
            17.8Net
                interest expense and deferred financing amortization
            
            
            2.3
            
            
            1.2Other
                (income) expense, net
            
            
            0.2
            
            
            (0.1
            )Earnings
                before income taxes
            
            
            13.7
            
            
            16.7Provision
                for income taxes
            
            
            5.5
            
            
            6.6Net
                earnings
            
            
            8.2
            %
            
            10.1
            %





22





**Three
      Months Ended March 29, 2008 Compared to Three Months Ended** **March
      31, 2007**





**NET
      SALES** ***.***  Net
      sales
      for the first quarter of fiscal 2008 were $160.9 million as compared to $105.7
      million in the first quarter of 2007.





Net
      sales
      at the Commercial Foodservice Equipment Group amounted to $134.0 million in
      the
      first quarter of 2008 as compared to $90.5 million in the prior year quarter.





Net
      sales
      from the acquisitions of Jade, Carter-Hoffmann, Wells Bloomfield and Star which
      were acquired on April 1, 2007, June 29, 2007, August 3, 2007 and December
      31,
      2007, respectively, accounted for an increase of $45.6 million during the first
      quarter of 2008. Excluding the impact of acquisitions, net sales of commercial
      foodservice equipment were flat, reflecting the impact of deferred customer
      purchases due to slowed economic conditions.





Net
      sales
      for the Food Processing Equipment Group amounted to $19.9 million in the first
      quarter of 2008 as compared to $12.2 million in the prior year quarter. Net
      sales of MP Equipment, which was acquired on July 2, 2007, accounted for an
      increase of $9.7 million. Excluding the impact of acquisitions, net sales of
      food processing equipment decreased $2.0 million due to delayed customer
      purchases as a result of economic uncertainties and quarterly
      variations  which
      occur as a result of the timing of large orders .





Net
      sales
      at the International Distribution Division increased by $2.2 million to $15.8
      million or 16%, reflecting higher sales in Asia, Europe and Latin America.
      Increased international sales reflect increased business with restaurant chains
      and increased pricing competitiveness driven by the weakened US dollar.


**GROSS
      PROFIT** ***.***  Gross
      profit increased to $58.9 million in the first quarter of 2008 from $41.1
      million in the prior year period, reflecting the impact of higher sales volumes.
      The gross margin rate was 36.6% in the first quarter of 2008 as compared to
      38.9% in the prior year quarter. The net decrease in the gross margin rate
      reflects:





·
            Acquisition
                accounting adjustments of $1.5 million to revalue inventories related
                to Star which reduced gross margins in the first quarter.





·
            The
                adverse impact of steel costs which have risen significantly from
                the
                prior year quarter.





·
            Lower
                margins at the newly acquired Jade, Carter-Hoffmann, MP Equipment,
                Wells
                Bloomfield and Star operations which are in the process of being
                integrated within the company.




23





**SELLING,
      GENERAL AND ADMINISTRATIVE EXPENSES** ***.***  Combined
      selling, general, and administrative expenses increased from $22.3 million
      in
      the first quarter of 2007 to $32.9 million in the first quarter of 2008. As
      a
      percentage of net sales, operating expenses decreased from 21.1% in the first
      quarter of 2007 to 20.4% in the first quarter of 2008. Selling expenses
      increased from $11.1 million in the first quarter of 2007 to $16.2 million
      in
      the first quarter of 2008, reflecting $5.2 million of incremental costs
      associated with the acquisitions of Jade completed on April 1, 2007,
      Carter-Hoffmann, completed June 29, 2007, MP Equipment, completed July 2, 2007,
      Wells Bloomfield, completed August 3, 2007 and Star completed on December 31,
      2007. General and administrative expenses increased from $11.2 million in the
      first quarter of 2007 to $16.6 million in the first quarter of 2008. General
      and
      administrative expenses reflects $4.5 million of costs associated with the
      acquired operations of Jade, Carter-Hoffmann, MP Equipment, Wells Bloomfield
      and
      Star. Increased general and administrative costs also include increased non-cash
      stock compensation costs which increased by $1.2 million from the prior year
      first quarter.





**NON-OPERATING
      EXPENSES.** Interest
      and deferred financing amortization costs increased to $3.7 million in the
      first
      quarter of 2008 as compared to $1.2 million in the first quarter of 2007, due
      to
      increased borrowings resulting from recent acquisitions. Other expense of $0.4
      million in the first quarter of 2008 compared unfavorably to other income of
      $0.1 million in the prior year first quarter. Other expense in the first quarter
      of 2008 included $0.2 million of unrealized losses on financing derivatives
      and
      $0.2 million of foreign exchange losses.





**INCOME
      TAXES** ***.***  A
      tax
      provision of $8.7 million, at an effective rate of 40%, was recorded during
      the
      first quarter of 2008, as compared to a $6.9 million provision at a 39%
      effective rate in the prior year quarter.





**Financial
      Condition and Liquidity**





During
      the three months ended March 29, 2008, cash and cash equivalents decreased
      by
      $2.0 million to $5.5 million at March 29, 2008 from $7.5 million at December
      29,
      2007. Net borrowings increased from $96.2 million at December 29, 2007 to $272.7
      million at March 29, 2008.





**OPERATING
      ACTIVITIES** ***.***  Net
      cash
      provided by operating activities was $12.6 million for the three-month period
      ended March 29, 2008 compared to cash used of $4.4 million for the three-month
      period ended March 31, 2007.





During
      the three months ended March 29, 2008, working capital levels changed due to
      normal business fluctuations, including the impact of increased seasonal working
      capital needs. The changes in working capital included a $0.8 million decrease
      in accounts receivable, a $1.6 million increase in inventory, a $3.8 million
      decrease in prepaid expenses and other assets and a $5.5 million increase
      in accounts payable. Accrued expenses and other non-current liabilities also
      decreased by $17.7 million reflecting first quarter payout of customer rebates
      and incentive compensation related to prior year programs.





**INVESTING
      ACTIVITIES** ***.***  During
      the three months ended March 29, 2008, net cash used in investing activities
      amounted to $190.2 million. This includes $188.1 million associated with the
      acquisition of Star, $1.2 million associated with the purchase of a
      manufacturing facility for Carter Hoffmann which had been leased and $0.9
      million of capital expenditures associated with additions and upgrades of
      production equipment.




24


**FINANCING
      ACTIVITIES.** Net
      cash
      flows provided by financing activities were $175.6 million during the three
      months ended March 29, 2008. The net increase in debt includes $176.3 million
      in
      borrowings under the company’s $450 million revolving credit facility and $0.2
      million of repayments of foreign bank loans.





At
      March
      29, 2008, 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.





**Recently
      Issued Accounting Standards**




In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities – Including an amendment of FASB
      Statement No. 115. This statement permits entities to choose to measure many
      financial instruments and certain other items at fair value. This statement
      is
      effective for fiscal years beginning after November 15, 2007. The adoption
      of
      SFAS No. 159 did not have a material impact on the financial
      statements.





In
      December 2007, the FAS issued SFAS No. 141R, “Business Combinations”. This
      statement provides companies with principles and requirements on how an acquirer
      recognizes and measures in its financial statements the identifiable assets
      acquired, liabilities assumed, and any noncontrolling interest in the acquiree
      as well as the recognition and measurement of goodwill acquired in a business
      combination. This statement also requires certain disclosures to enable users
      of
      the financial statements to evaluate the nature and financial effects of the
      business combination. Acquisition costs associated with the business combination
      will generally be expensed as incurred. This statement is effective for business
      combinations occurring in fiscal years beginning after December 15, 2008.
      Early adoption of FASB Statement No. 141R is not permitted. The company is
      evaluating the impact the application of this guidance will have on the
      company’s financial position, results of operations and cash flows. The Company
      will adopt this statement for acquisitons consummated after the statements
      effective date.





In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements – an amendment of ARB No. 51”. This statement
      amends ARB 51 to establish accounting and reporting standards for the
      noncontrolling interest (minority interest) in a subsidiary and for the
      deconsolidation of a subsidiary. Upon its adoption, effective as of the
      beginning of the company’s 2009 fiscal year, noncontrolling interests will be
      classified as equity in the company’s financial statements and income and
      comprehensive income attributed to the noncontrolling interest will be included
      in the company’s income and comprehensive income. The provisions of this
      standard must be applied retrospectively upon adoption. The company does not
      anticipate that the adoption of SFAS No. 160 will have a material impact on
      its
      financial statements.




25




In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities—an amendment of FASB Statement No. 133.” This statement
      amends SFAS No. 133 to require enhanced disclosures about an entity’s derivative
      and hedging activities. This Statement is effective for financial statements
      issued for fiscal years and interim periods beginning after November 15, 2008,
      with early application encouraged. The company is evaluating the impact the
      application of this guidance will have on the company’s financial position,
      results of operations and cash flows.





**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.




*Revenue
        Recognition.* The
        company recognizes revenue on the sale of its products when risk of loss
        has
        passed to the customer, which occurs at the time of shipment, and collectibility
        is reasonably assured. The sale prices of the products sold are fixed and
        determinable at the time of shipment. Sales are reported net of sales returns,
        sales incentives and cash discounts based on prior experience and other
        quantitative and qualitative factors.
 
 At
        the
        food processing equipment group, the company enters into long-term sales
        contracts for certain products. Revenue under these long term sales contracts
        is
        recognized using the percentage of completion method prescribed by Statement
        of
        Position No. 81-1 due to the length of time to fully manufacture and assemble
        the equipment. The company measures revenue recognized based on the ratio
        of
        actual labor hours incurred in relation to the total estimated labor hours
        to be
        incurred related to the contract. Because estimated labor hours to complete
        a
        project are based upon forecasts using the best available information, the
        actual hours may differ from the original estimates. The percentage of
        completion method of accounting for these contracts most accurately reflects
        the
        status of these uncompleted contracts in the company’s financial statements and
        most accurately measures the matching of revenues and expenses. At the time
        a
        loss on a contract becomes known, the amount of the estimated loss is recognized
        in the consolidated financial statements.




*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 be 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.





*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.




26





*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 partially 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 reserve requirements 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 pending
      litigation will have a material adverse effect on its financial condition or
      results of operations.





*Income
      taxes:*  The
      company operates in numerous foreign and domestic 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.  The
      company initially recognizes the financial statement effects of a tax position
      when it more likely than not, based on the technical merits, that the position
      will be sustained upon examiniation. For tax positions that meet the
      more-likely-than-not recognition threshold, the company initially and
      subsequently measures its tax positions as the largest amount of tax benefit
      that is greater than 50 percent likely of being realized upon effective
      settlement with the taxing authority. As part of the company's calculation
      of
      the provision for taxes, the company has recorded liabilities on various tax
      positions that are currently under audit by the taxing authorities. The
      liabilities may change in the future upon effective settlement of the tax
      positions.





**Contractual
      Obligations**





The
      company's contractual cash payment obligations as of March 29, 2008 are set
      forth below (in thousands):





TotalDeferred
            
            
            
            
            
            Idle
            
            ContractualAcquisition
            
            Long-term
            
            Operating
            
            Facility
            
            CashCosts
            
            Debt
            
            Leases
            
            Leases
            
            ObligationsLess
                than 1 year
            
            $
            —
            
            $
            2,661
            
            $
            2,661
            
            $
            332
            
            $
            5,6541-3
                years
            
            
            2,000
            
            
            482
            
            
            3,350
            
            
            793
            
            
            6,6253-5
                years
            
            
            —
            
            
            1,814
            
            
            903
            
            
            870
            
            
            3,587After
                5 years
            
            
            —
            
            
            267,700
            
            
            53
            
            
            1,031
            
            
            268,784$
            2,000
            
            $
            272,657
            
            $
            6,967
            
            $
            3,026
            
            $
            284,650





Idle
      facility leases consists of an obligation for a manufacturing location that
      was
      exited in conjunction with the company's manufacturing consolidation efforts.
      This lease obligation continues through June 2015. This facility has been
      subleased. The obligation presented above does not reflect any anticipated
      sublease income from the facilities.





27





The
      projected benefit obligation of the company’s defined benefit plans exceeded the
      plans’ assets by $4.6 million at the end of 2007 as compared to $3.5 million at
      the end of 2006. The unfunded benefit obligations were comprised of a $0.6
      million under funding of the company's union plan and $4.0 million of under
      funding of the company's director plans. The company does not expect to
      contribute to the director plans in 2008. The company made minimum contributions
      required by the Employee Retirement Income Security Act of 1974 (“ERISA”) of
      $0.1 million in 2007 to the company's union plan. The company does not expect
      to
      make contributions in 2008 to the union plan.





The
      company has $4.1 million in outstanding letters of credit, which expire on
      March
      29, 2009, to secure potential obligations under insurance programs.





The
      company places purchase orders with its suppliers in the ordinary course of
      business. These purchase orders are generally to fulfill short-term
      manufacturing requirements of less than 90 days and most are cancelable with
      a
      restocking penalty. The company has no long-term purchase contracts or minimum
      purchase obligations with any supplier.





The
      company has contractual obligations under its various debt agreements to make
      interest payments. These amounts are subject to the level of borrowings in
      future periods and the interest rate for the applicable periods, and therefore
      the amounts of these payments is not determinable.




The
      company has an obligation to make $2.0 million of purchase price
      payments to the sellers of MP Equipment that were deferred in conjunction with
      the acquisition.





The
      company has no activities, obligations or exposures associated with off-balance
      sheet arrangements.





28





**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.





Fixed
            
            VariableRate
            
            RateTwelve Month Period Ending
            
            Debt
            
            Debt(in
                thousands)March
                29, 2009
            
            $
            —
            
            $
            2,661March
                29, 2010
            
            
            —
            
            
            241March
                29, 2011
            
            
            —
            
            
            241March
                29, 2012
            
            
            —
            
            
            241March
                29, 2013
            
            
            —
            
            
            269,273$
            —
            
            $
            272,657




During
      the fourth quarter of 2007 the company entered into a new senior secured credit
      facility. Terms of the senior credit agreement provide for $450.0 million of
      availability under a revolving credit line. As of March 29, 2008, the company
      had $267.7 million of borrowings outstanding under this facility. The company
      also has $4.1 million in outstanding letters of credit, which reduces the
      borrowing availability under the revolving credit line.





Borrowings
      under the senior secured credit facility are assessed at an interest rate at
      1.25% above LIBOR for long-term borrowings or at the higher of the Prime rate
      and the Federal Funds Rate. At March 29, 2008 the average interest rate on
      the
      senior debt amounted to 4.21%. The interest rates on borrowings under the senior
      bank facility may be adjusted quarterly based on the company’s defined
      indebtedness ratio on a rolling four-quarter basis. Additionally, a commitment
      fee, based upon the indebtedness ratio is charged on the unused portion of
      the
      revolving credit line. This variable commitment fee amounted to 0.25% as of
      March 29, 2008.





In
      August
      2006, the company completed its acquisition of Houno A/S in Denmark. This
      acquisition was funded in part with locally established debt facilities with
      borrowings in Danish Krone.  On March 29, 2008 these facilities amounted to
      $5.0 million in US dollars, including $2.6 million outstanding under a revolving
      credit facility and $2.4 million of a term loan.  The interest rate on the
      revolving credit facility is assessed at 1.25% above Euro LIBOR, which amounted
      to 5.41% on March 29, 2008. The term loan matures in 2013 and the interest
      rate
      is assessed at 5.62%.





29




The
      company has historically entered into interest rate swap agreements to
      effectively fix the interest rate on its outstanding debt. The agreements swap
      one-month LIBOR for fixed rates. As of March 29, 2008 the company had the
      following interest rate swaps in effect:





**Fixed****Notional**
            
            **Interest**
            
            **Effective**
            
            **Maturity****Amount**
            
            **Rate**
            
            **Date**
            
            **Date**$
                  10,000,000
            
            
            5.030
            %
            
            03/03/06
            
            
            12/21/09$  
                10,000,000
            
            
            2.520
            %
            
            2/13/2008
            
            
            2/19/2009$  
                20,000,000
            
            
            2.635
            %
            
            2/6/2008
            
            
            2/6/2009$  
                25,000,000
            
            
            3.350
            %
            
            1/14/2008
            
            
            1/14/2010$  
                10,000,000
            
            
            2.920
            %
            
            2/1/2008
            
            
            2/1/2010$  
                10,000,000
            
            
            2.785
            %
            
            2/6/2008
            
            
            2/6/2010$  
                10,000,000
            
            
            3.033
            %
            
            2/6/2008
            
            
            2/6/2011$  
                10,000,000
            
            
            2.820
            %
            
            2/1/2008
            
            
            2/1/2009





The
      terms
      of the senior secured credit facility limit the paying of dividends, capital
      expenditures and leases, and require, among other things, 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. A material adverse
      effect is determined on a subjective basis by the company's creditors. The
      credit facility is secured by the capital stock of the company’s domestic
      subsidiaries, 65% of the capital stock of the company’s foreign subsidiaries and
      substantially all other assets of the company. At March 29, 2008, the company
      was in compliance with all covenants pursuant to its borrowing
      agreements.




30





**Financing
      Derivative Instruments**





The
      company has entered into interest rate swaps to fix the interest rate applicable
      to certain of its variable-rate debt. The agreements swap one-month LIBOR for
      a
      fixed rates. The company has designated these swaps as cash flow hedges and
      all
      changes in fair value of the swaps are recognized in accumulated other
      comprehensive income. As of March 29, 2008, the fair value of these instruments
      was $1.4 million. The change in fair value of these swap agreements in the
      first
      three months of 2008 was a loss of $0.5 million, net of taxes.





A
      summary
      of the company’s interest rate swaps is as follows:





**Fixed**
            
            
            
            
            
            
            
            **Changes****Notional**
            
            **Interest**
            
            **Effective**
            
            **Maturity**
            
            **Fair Value**
            
            **In Fair Value****Amount**
            
            **Rate**
            
            **Date**
            
            **Date**
            
            **Mar. 29, 2008**
            
            **(net of taxes)**$
                   10,000,000
            
            
            5.030
            %
            
            03/03/06
            
            
            12/21/09
            
            $
            (462,000
            )
            $
            (9,000
            )1$  
                 10,000,000
            
            
            2.520
            %
            
            2/13/2008
            
            
            2/19/2009
            
            $
            (28,000
            )
            $
            (17,000
            )$  
                 20,000,000
            
            
            2.635
            %
            
            2/6/2008
            
            
            2/6/2009
            
            $
            (65,000
            )
            $
            (39,000
            )$  
                 25,000,000
            
            
            3.350
            %
            
            1/14/2008
            
            
            1/14/2010
            
            $
            (464,000
            )
            $
            (278,000
            )$  
                 10,000,000
            
            
            2.920
            %
            
            2/1/2008
            
            
            2/1/2010
            
            $
            (106,000
            )
            $
            (64,000
            )$   
                10,000,000
            
            
            2.785
            %
            
            2/6/2008
            
            
            2/6/2010
            
            $
            (47,000
            )
            $
            (28,000
            )$  
                 10,000,000
            
            
            3.033
            %
            
            2/6/2008
            
            
            2/6/2011
            
            $
            (81,000
            )
            $
            (49,000
            )$  
                 10,000,000
            
            
            2.820
            %
            
            2/1/2008
            
            
            2/1/2009
            
            $
            (100,000
            )
            $
            (60,000
            )





1
            Previous
                to the fiscal quarter ended March 29, 2008, this swap had not been
                designated as an effective cash flow hedge. The swap was designated
                as an
                effective cash flow hedge during the quarter ended March 29, 2008.
                In
                accordance with SFAS No. 133, the net reduction of $0.2 million in
                the
                fair value of this swap prior to the designation date has been recorded
                as
                a loss in earnings for the first quarter
                2008.





**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. There was no forward
      contract outstanding at the end of the quarter.





31





**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.





As
      of
      March 29, 2008, 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 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 as of the end of this
      period.




During
      the quarter ended March 29, 2008, there has been no change in the company's
      internal control over financial reporting that has materially affected, or
      is
      reasonably likely to materially affect, the company's internal control over
      financial reporting.





32


**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 March 29, 2008, except as
      follows:





**Item
      1A. Risk Factors**





There
      have been no material changes in the risk factors as set forth in the company's
      2006 Annual Report on Form 10-K.





**Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds**





*Issuer
      Purchases of Equity Securities*




Total
              Number
                of
              Shares
              Purchased
            
            Average
                Price Paidper Share
            
            Total
                Numberof SharesPurchased asPart
                ofPublicityAnnouncedPlan orProgram
            
            MaximumNumber
                ofShares thatMay Yet bePurchasedUnder the Planor
                ProgramDecember
              30, 2007 to January 26, 2008
            
            
            4,869
            
            
            -
            
            
            4,869
            
            
            842,132January
              27, 2008 to February 23, 2008
            
            
            -
            
            
            -
            
            
            -
            
            
            842,132February
              24, 2008 to March 29, 2008
            
            
            -
            
            
            -
            
            
            -
            
            
            842,132Quarter
              ended March 29, 2008
            
            
            4,869
            
            
            -
            
            
            4,869
            
            
            842,132




In
      July
      1998, the company's Board of Directors adopted a stock repurchase program that
      authorized the purchase of common shares in open market purchases. As of March
      29, 2008, 957,868 shares had been purchased under the 1998 stock repurchase
      program. 4,869 shares were repurchased by the company during the three month
      period ended March 29, 2008.





**Item
      6. Exhibits**




Exhibits
                  –The
                  following exhibits are filed herewith:Exhibit
                  31.1 –
              Rule
                  13a-14(a)/15d -14(a) Certification of the Chief Executive Officer
                  as
                  adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit
                  31.2 –
              Rule
                  13a-14(a)/15d -14(a) Certification of the Chief Financial Officer
                  as
                  adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                  2002.Exhibit
                  32.1–
              Certification
                  by the Principal Executive Officer of The Middleby Corporation
                  Pursuant to
                  Rule 13A-14(b) under the Exchange Act and Section 906 of the
                  Sarbanes-Oxley Act of 2002(18 U.S.C. 1350).Exhibit
                  32.2–
              Certification
                  by the Principal Financial Officer of The Middleby Corporation
                  Pursuant to
                  Rule 13A-14(b) under the Exchange Act and Section 906 of the
                  Sarbanes-Oxley Act of 2002(18 U.S.C.
                  1350).




33




**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
                May 8, 2008
            By:
            /s/
                Timothy J. FitzGeraldTimothy
                J. FitzGeraldVice
                President,Chief
                Financial Officer




34