**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 September 29, 2007**





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. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange
      Act.


Large
      accelerated filer o Accelerated
      filer x Non-accelerated
      filer 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
      November 2, 2007, there were 16,730,888 shares of the registrant's common stock
      outstanding.









**THE
      MIDDLEBY CORPORATION AND SUBSIDIARIES**





**QUARTER
      ENDED SEPTEMBER 29, 2007**





INDEX




DESCRIPTION
              
              PAGEPART
                  I. FINANCIAL INFORMATIONItem
                  1.
              Condensed
                  Consolidated Financial Statements (unaudited)CONDENSED
                  CONSOLIDATED BALANCE SHEETS
              1September
                  29, 2007 and December 30, 2006CONDENSED
                  CONSOLIDATED STATEMENTS OF EARNINGS
              2September
                  29, 2007 and September 30, 2006CONDENSED
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
              3September
                  29, 2007 and September 30, 2006NOTES
                  TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              4Item
                  2.
              Management's
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              18Item
                  3.
              Quantitative
                  and Qualitative Disclosures About Market Risk
              28Item
                  4.
              Controls
                  and Procedures
              31PART
                  II. OTHER INFORMATIONItem
                  1A.
              Risk
                  Factors
              32Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              32Item
                  6.
              Exhibits
              32









**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)**




Sep.
                  29, 2007
              
              Dec.
                  30, 2006**ASSETS**Current
                  assets:Cash
                  and cash equivalents
              
              $
              7,616
              
              $
              3,534Accounts
                  receivable, net of reserve for doubtful accounts of $6,483 and
                  $5,101
              
              
              69,698
              
              
              51,580Inventories,
                  net
              
              
              68,325
              
              
              47,292Prepaid
                  expenses and other
              
              
              8,156
              
              
              3,289Prepaid
                  taxes
              
              
              977
              
              
              1,129Current
                  deferred taxes
              
              
              11,449
              
              
              10,851Total
                  current assets
              
              
              166,221
              
              
              117,675Property,
                  plant and equipment, net of accumulated depreciation of $39,825
                  and
                  $37,006
              
              
              36,141
              
              
              28,534Goodwill
              
              
              129,241
              
              
              101,258Other
                  intangibles
              
              
              53,844
              
              
              35,306Other
                  assets
              
              
              1,849
              
              
              2,249Total
                  assets
              
              $
              387,296
              
              $
              285,022**LIABILITIES
                  AND STOCKHOLDERS' EQUITY**Current
                  liabilities:Current
                  maturities of long-term debt
              
              $
              16,765
              
              $
              16,838Accounts
                  payable
              
              
              32,825
              
              
              19,689Accrued
                  expenses
              
              
              84,236
              
              
              69,636Total
                  current liabilities
              
              
              133,826
              
              
              106,163Long-term
                  debt
              
              
              91,083
              
              
              65,964Long-term
                  deferred tax liability
              
              
              5,240
              
              
              5,867Other
                  non-current liabilities
              
              
              9,456
              
              
              6,455Stockholders'
                  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; 20,585,932
                  and
                  23,615,534 shares issued in 2007 and 2006, respectively
              
              
              119
              
              
              117Paid-in
                  capital
              
              
              84,842
              
              
              73,743Treasury
                  stock at cost; 3,855,044 shares in 2007 and 2006,
                  respectively
              
              
              (89,641
              )
              
              (89,641
              )Retained
                  earnings
              
              
              151,640
              
              
              115,917Accumulated
                  other comprehensive income
              
              
              732
              
              
              437Total
                  stockholders' equity
              
              
              147,691
              
              
              100,573Total
                  liabilities and stockholders' equity
              
              $
              387,296
              
              $
              285,022




See
      accompanying notes




1




**THE
      MIDDLEBY CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF EARNINGS**


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


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




**Three
                Months Ended**
            
            **Nine
                Months Ended****Sep.
                29, 2007**
            
            **Sep.
                30, 2006**
            
            **Sep.
                29, 2007**
            
            **Sep.
                30, 2006****Net
                sales**
            
            **$**
            **135,996**
            
            **$**
            **103,239**
            
            **$**
            **354,939**
            
            **$**
            **304,837****Cost
                of sales**
            
            
            **84,600**
            
            
            **62,664**
            
            
            **217,552**
            
            
            **187,011****Gross
                profit**
            
            
            **51,396**
            
            
            **40,575**
            
            
            **137,387**
            
            
            **117,826****Selling
                expenses**
            
            
            **13,507**
            
            
            **10,009**
            
            
            **36,575**
            
            
            **30,901****General
                and administrative expenses**
            
            
            **12,465**
            
            
            **9,545**
            
            
            **35,380**
            
            
            **30,477****Income
                from operations**
            
            
            **25,424**
            
            
            **21,021**
            
            
            **65,432**
            
            
            **56,448****Net
                interest expense and deferred financing
                amortization**
            
            
            **1,621**
            
            
            **1,618**
            
            
            **4,138**
            
            
            **5,445****Other
                (income) expense, net**
            
            
            **(316**
            **)**
            
            **(37**
            **)**
            
            **(1,053**
            **)**
            
            **35****Earnings
                before income taxes**
            
            
            **24,119**
            
            
            **19,440**
            
            
            **62,347**
            
            
            **50,968****Provision
                for income taxes**
            
            
            **10,063**
            
            
            **7,263**
            
            
            **24,989**
            
            
            **19,650****Net
                earnings**
            
            **$**
            **14,056**
            
            **$**
            **12,177**
            
            **$**
            **37,358**
            
            **$**
            **31,318****Net
                earnings per share:****Basic**
            
            **$**
            **0.89**
            
            **$**
            **0.80**
            
            **$**
            **2.39**
            
            **$**
            **2.05****Diluted**
            
            **$**
            **0.83**
            
            **$**
            **0.74**
            
            **$**
            **2.22**
            
            **$**
            **1.90****Weighted
                average number of shares****Basic**
            
            
            **15,743**
            
            
            **15,290**
            
            
            **15,632**
            
            
            **15,258****Dilutive
                stock options****1,
                2**
            
            
            **1,191**
            
            
            **1,206**
            
            
            **1,225**
            
            
            **1,256****Diluted**
            
            
            **16,934**
            
            
            **16,496**
            
            
            **16,857**
            
            
            **16,514**




1
            There
                were no anti-dilutive stock options excluded from common stock equivalents
                for the three and nine month periods ended September 29,
                2007.





2
            There
                were 7,000 anti-dilutive stock options excluded from common stock
                equivalents in the three and nine months ended September 30,
                2006.




See
      accompanying notes




2




**THE
      MIDDLEBY CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(In
      Thousands)**


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





**Nine
                Months Ended****Sep.
                29, 2007**
            
            **Sep.
                30, 2006****Cash
                flows from operating activities-****Net
                earnings**
            
            **$**
            **37,358**
            
            **$**
            **31,318****Adjustments
                to reconcile net earnings to cash provided by operating
                activities:****Depreciation
                and amortization**
            
            
            **4,850**
            
            
            **3,643****Deferred
                taxes**
            
            
            **1,417**
            
            
            **249****Non-cash
                share-based compensation**
            
            
            **5,540**
            
            
            **3,416****Cash
                effects of changes in -****Accounts
                receivable, net**
            
            
            **(5,674**
            **)**
            
            **(11,972**
            **)****Inventories,
                net**
            
            
            **(2,992**
            **)**
            
            **(3,145**
            **)****Prepaid
                expenses and other assets**
            
            
            **(4,576**
            **)**
            
            **3,186****Accounts
                payable**
            
            
            **6,866**
            
            
            **290****Accrued
                expenses and other liabilities**
            
            
            **3,195**
            
            
            **6,379****Net
                cash provided by (used in) operating activities**
            
            
            **45,984**
            
            
            **33,364****Cash
                flows from investing activities-****Net
                additions to property and equipment**
            
            
            **(1,689**
            **)**
            
            **(1,236**
            **)****Acquisition
                of Alkar**
            
            
            **—**
            
            
            **(1,500**
            **)****Acquisition
                of Houno**
            
            
            **(179**
            **)**
            
            **(4,939**
            **)****Acquisition
                of Jade**
            
            
            **(7,779**
            **)**
            
            **—****Acquisition
                of Carter Hoffmann**
            
            
            **(16,152**
            **)**
            
            **—****Acquisition
                of MP Equipment**
            
            
            **(15,193**
            **)**
            
            **—****Acquisition
                of Wells Bloomfield**
            
            
            **(28,805**
            **)**
            
            **—****Net
                cash (used in) investing activities**
            
            
            **(69,797**
            **)**
            
            **(7,675**
            **)****Cash
                flows from financing activities-****Net
                p****roceeds
                (repayments) under revolving credit facilities**
            
            
            **36,750**
            
            
            **(16,500**
            **)****Repayments
                under senior secured bank notes**
            
            
            **(11,250**
            **)**
            
            **(9,375**
            **)****Repayments
                under foreign bank loan**
            
            
            **(822**
            **)**
            
            **—****Repayments
                under note agreement**
            
            
            **—**
            
            
            **(2,145**
            **)****Net
                proceeds from stock issuances**
            
            
            **3,121**
            
            
            **1,284****Net
                cash provided by (used in) financing activities**
            
            
            **27,799**
            
            
            **(26,736**
            **)****Effect
                  of exchange rates on cash **and cash
                  equivalents****
            
            
            **94**
            
            
            **121****Cash
                acquired in acquisition**
            
            
            **2**
            
            
            **43****Changes
                in cash and cash equivalents-****Net
                increase (decrease) in cash and cash equivalents**
            
            
            **4,082**
            
            
            **(883**
            **)****Cash
                and cash equivalents at beginning of year**
            
            
            **3,534**
            
            
            **3,908****Cash
                and cash equivalents at end of quarter**
            
            **$**
            **7,616**
            
            **$**
            **3,025****Supplemental
                disclosure of cash flow information:****Interest
                paid**
            
            **$**
            **3,844**
            
            **$**
            **4,898****Income
                tax payments**
            
            **$**
            **24,815**
            
            **$**
            **8,557**




See
      accompanying notes




3




**THE
      MIDDLEBY CORPORATION AND SUBSIDIARIES**





**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**September
      29, 2007**


**(** **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 2006 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
      September 29, 2007 and December 30, 2006, and the results of operations for
      the
      three and nine months ended September 29, 2007 and September 30, 2006 and
      cash flows for the nine months ended September 29, 2007 and September 30, 2006.




**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 $2.2 million and
      $1.2 million for the third quarter of 2007 and 2006, respectively. Share-based
      compensation was $5.5 million and $3.4 million for the nine month periods ended
      September 29, 2007 and September 30, 2006, respectively.




**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 (December 31, 2006), as required.





4





The
      following table indicates the effect of the application of FIN 48 on individual
      line items in the Consolidated Balance Sheet as of the adoption date (dollars
      in
      thousands).





Before
            
            
            
            AfterFIN
                48
            
            Adjustment
            
            FIN
                48Accrued
                liabilities
            
            $
            69,636
            
            $
            (5,395
            )
            $
            64,241Other
                non-current liabilities
            
            $
            6,455
            
            $
            7,030
            
            $
            13,485Retained
                earnings
            
            $
            115,917
            
            $
            (1,635
            )
            $
            114,282




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
      regarding transfer pricing, the deductibility of certain expenses, intercompany
      transactions as well as other matters. As of the adoption date, the total amount
      of liability for unrecognized tax benefits related to federal, state and foreign
      taxes was approximately $5.7 million (of which the entire amount would impact
      the effective tax rate if recognized) plus approximately $0.5 million of accrued
      interest and $0.8 million of penalties. As of September 29, 2007, the
      corresponding balance of liability for unrecognized tax benefits is
      approximately $6.0 million plus approximately $0.7 million of accrued interest
      and $0.8 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 is not currently under examination in any tax jurisdiction; however
      it
      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
              2004
                  - 2006United
                  States – states
              2003
                  - 2006China
              2006Denmark
              2006Mexico
              2006Philippines
              2004
                  - 2006South
                  Korea
              2004
                  - 2006Spain
              2003
                  - 2006Taiwan
              2005
                  - 2006United
                  Kingdom
              2006




The
      company does not anticipate that total unrecognized tax benefits will
      significantly change due to the settlement of audits and the expiration of
      statute of limitations prior to September 29, 2008.





5




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





*Houno*





On
      August
      31, 2006, the company acquired the stock of Houno A/S (“Houno”) located in
      Denmark for $4.9 million in cash. The company also assumed $3.7 million of
      debt
      included as part of the net assets of Houno.





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 cash paid for the Houno acquisition is summarized as follows
      (in
      thousands):





Aug. 31, 2006
            
            Adjustments
            
            Sep. 29, 2007Current
                assets
            
            $
            4,325
            
            $
            (287
            )
            $
            4,038Property,
                plant and equipment
            
            
            4,371
            
            
            —
            
            
            4,371Goodwill
            
            
            1,287
            
            
            799
            
            
            2,086Other
                intangibles
            
            
            1,139
            
            
            (199
            )
            
            940Other
                assets
            
            
            92
            
            
            —
            
            
            92Current
                liabilities
            
            
            (3,061
            )
            
            (134
            )
            
            (3,195
            )Long-term
                debt
            
            
            (2,858
            )
            
            —
            
            
            (2,858
            )Long-term
                deferred tax liability
            
            
            (356
            )
            
            —
            
            
            (356
            )Total
                cash paid
            
            $
            4,939
            
            $
            179
            
            $
            5,118





The
      goodwill is subject to the nonamortization provisions of SFAS No. 142 from
      the
      date of acquisition. Other intangibles also includes $0.1 million allocated
      to
      backlog and $0.8 million allocated to developed technology which are amortized
      over periods of 1 month and 5 years, respectively. Goodwill and other
      intangibles of Houno are allocated to the Commercial Foodservice Equipment
      Group
      for segment reporting purposes. These assets are not deductible for tax
      purposes.





*Jade*





On
      April
      1, 2007, the company completed its acquisition of the assets and operations
      of
      Jade Product 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. 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.




6




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





Apr. 1, 2007
            
            Adjustments
            
            Sep. 29, 2007Current
                assets
            
            $
            6,727
            
            $
            (2,605
            )
            $
            4,122Property,
                plant and equipment
            
            
            2,029
            
            
            —
            
            
            2,029Goodwill
            
            
            250
            
            
            3,430
            
            
            3,680Other
                intangibles
            
            
            1,590
            
            
            —
            
            
            1,590Current
                liabilities
            
            
            (3,205
            )
            
            (437
            )
            
            (3,642
            )Total
                cash paid
            
            $
            7,391
            
            $
            388
            
            $
            7,779








The
      goodwill and $1.4 million of other intangibles which are comprised of the
      tradename, associated with the Jade acquisition, are subject to the
      non-amortization provisions of SFAS No. 142 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.





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 Carter-Hoffmann acquisition is
      summarized as follows (in thousands):





Jun. 29, 2007
            
            Adjustments
            
            Sep. 29, 2007Current
                assets
            
            $
            7,912
            
            $
            (2,026
            )
            $
            5,886Property,
                plant and equipment
            
            
            2,264
            
            
            —
            
            
            2,264Goodwill
            
            
            9,452
            
            
            (900
            )
            
            8,552Other
                intangibles
            
            
            —
            
            
            3,910
            
            
            3,910Current
                liabilities
            
            
            (3,646
            )
            
            (760
            )
            
            (4,406
            )Other
                non-current liabilities
            
            
            (54
            )
            
            —
            
            
            (54
            )Total
                cash paid
            
            $
            15,928
            
            $
            224
            
            $
            16,152





The
      goodwill and $2.3 million of other intangibles, which are comprised of the
      trade
      name, associated with the Carter-Hoffmann acquisition is subject to the
      non-amortization provisions of SFAS No. 142 from the date of acquisition. Other
      intangibles of $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.




7




*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. 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, 2007Current
                assets
            
            $
            5,315Property,
                plant and equipment
            
            
            297Goodwill
            
            
            9,290Other
                intangibles
            
            
            6,420Other
                assets
            
            
            16Current
                liabilities
            
            
            (4,018
            )Other
                non-current liabilities
            
            
            (2,127
            )Total
                cash paid
            
            $
            15,193





The
      goodwill and $3.3 million of other intangibles, which are comprised of the
      trade
      name, associated
      with the MP Equipment acquisition is subject to the non-amortization provisions
      of SFAS No. 142 from the date of acquisition. Other intangibles also includes
      $1.0 million allocated to backlog, $0.3 million allocated to developed
      technology and $1.9 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. 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.





8




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





Aug.
                3, 2007Cash
            
            $
            2Current
                assets
            
            
            15,133Property,
                plant and equipment
            
            
            3,961Goodwill
            
            
            5,835Other
                intangibles
            
            
            8,130Other
                assets
            
            
            21Current
                liabilities
            
            
            (4,277
            )Other
                non-current liabilities
            
            
            —Total
                cash paid
            
            $
            28,805





The
      goodwill and $5.0 million of other intangibles, which are comprised of the
      trade
      name, associated
      with the Wells Bloomfield acquisition is subject to the non-amortization
      provisions of SFAS No. 142 from the date of acquisition. Other intangibles
      of
      $3.1 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.




**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 consolidated condensed financial statements
      and notes thereto to net earnings per share and the number of shares have been
      adjusted to reflect this stock split.




**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.




9





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





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. This
      statement defines fair value, establishes a framework for measuring fair value
      in generally accepted accounting principles and expands disclosures about fair
      value measurements. This statement does not require any new fair value
      measurements. This statement is effective for interim reporting periods in
      fiscal years beginning after November 15, 2007. The company will apply this
      guidance prospectively. The company is continuing its process of determining
      what impact the application of this guidance will have on the company's
      financial position, results of operations or cash flows.





In
      September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements
      No. 87, 88, 106, and 132(R)”. One provision of SFAS No. 158 requires the
      measurement of the company’s defined benefit plan’s assets and its obligation to
      determine the funded status be made as of the end of the fiscal year. This
      provision of SFAS No. 158 is effective for fiscal years ending after December
      15, 2008. The company does not anticipate that the impact from the adoption
      of
      this provision of SFAS No. 158 will be significant to its financial
      statements.





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 company will
      apply this guidance prospectively. The company is continuing its process of
      determining what impact the application of this guidance will have on the
      company's financial position, results of operations or 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 Ended
            
            Nine
                Months EndedSep.
                29, 2007
            
            Sep.
                30, 2006
            
            Sep.
                29, 2007
            
            Sep.
                30, 2006Net
                earnings.
            
            $
            14,056
            
            $
            12,177
            
            $
            37,358
            
            $
            31,318Currency
                translation adjustment
            
            
            320
            
            
            90
            
            
            596
            
            
            354Unrealized
                gain (loss) on interest rate swaps
            
            
            (202
            )
            
            (344
            )
            
            (301
            )
            
            (134
            )Comprehensive
                income
            
            $
            14,174
            
            $
            11,923
            
            $
            37,653
            
            $
            31,538





Accumulated
      other comprehensive income is comprised of minimum pension liability of $(1.0)
      million, net of taxes of $(0.7) million, as of September 29, 2007 and December
      30, 2006, foreign currency translation adjustments of $1.5 million as of
      September 29, 2007 and $0.9 million as of December 30, 2006, and an unrealized
      gain on interest rate swaps of $0.3 million, net of taxes of $0.2 million,
      as of
      September 29, 2007 and $0.6 million, net of taxes of $0.4 million, as of
      December 30, 2006.




10




**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 $14.1 million at September 29,
      2007 and $16.9 million at December 30, 2006 and represented approximately 21%
      and 36% 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 September 29, 2007 and
      December 30, 2006 are as follows:


Sep.
                  29, 2007
              
              Dec.
                  30, 2006(in
                  thousands)Raw
                  materials and parts
              
              $
              24,285
              
              $
              15,795Work-in-process
              
              
              13,440
              
              
              6,642Finished
                  goods
              
              
              31,773
              
              
              25,12769,498
              
              
              47,564LIFO
                  adjustment
              
              
              (1,172
              )
              
              (272
              )$
              68,326
              
              $
              47,292


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





Accrued
      expenses consist of the following:


Sep.
                  29, 2007
              
              Dec,
                  30, 2006(in
                  thousands)Accrued
                  payroll and related expenses
              
              $
              18,010
              
              $
              16,564Accrued
                  customer rebates
              
              
              13,383
              
              
              13,119Accrued
                  warranty
              
              
              12,453
              
              
              11,292Advance
                  customer deposits
              
              
              7,217
              
              
              3,615Accrued
                  product liability and workers comp
              
              
              6,425
              
              
              4,361Accrued
                  commissions
              
              
              4,696
              
              
              2,471Accrued
                  professional services
              
              
              3,159
              
              
              2,523Other
                  accrued expenses
              
              
              18,893
              
              
              15,691$
              84,236
              
              $
              69,636





11




**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:


Nine Months EndedSep. 29, 2007(in thousands)Beginning
                  balance
              
              $
              11,292Warranty
                  reserve related to acquisitions
              
              
              1,454Warranty
                  expense
              
              
              7,344Warranty
                  claims
              
              
              (7,637
              )Ending
                  balance
              
              $
              12,453




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





Sep.
                29, 2007
            
            Dec.
                30, 2006(in
                thousands)Senior
                secured revolving credit line
            
            $
            66,850
            
            $
            30,100Senior
                secured bank term loans
            
            
            36,250
            
            
            47,500Foreign
                loan
            
            
            4,748
            
            
            5,202Total
                debt
            
            $
            107,848
            
            $
            82,802Less:
                Current maturities of long-term debt
            
            
            16,765
            
            
            16,838Long-term
                debt
            
            $
            91,083
            
            $
            65,964





During
      the fourth quarter of 2005, the company amended its senior secured credit
      facility. Terms of the agreement currently provide for $36.3 million of term
      loans and $130.0 million of availability under a revolving credit line. As
      of
      September 29, 2007, the company had $103.1 million outstanding under its senior
      banking facility, including $66.8 million of borrowings under the revolving
      credit line. The company also had $5.1 million in outstanding letters of credit,
      which reduced the borrowing availability under the revolving credit
      line.





Borrowings
      under the senior secured credit facility are assessed at an interest rate of
      1.0% above LIBOR for long-term borrowings or at the higher of the Prime rate
      and
      the Federal Funds Rate for short term borrowings. At September 29, 2007, the
      average interest rate on the senior debt amounted to 6.46%. 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 0.20% as of September 29, 2007.





12




In
      August
      2006, the company completed its acquisition of Houno in Denmark.  This
      acquisition was funded in part with locally established debt facilities with
      borrowings in Danish Krone.  As of September 29, 2007, these facilities
      amounted to $4.7 million in U.S. dollars, including $1.6 million outstanding
      under a revolving credit facility, $2.2 million of a term loan and $0.9 million
      of a long term mortgage note.  The interest rate on the revolving credit
      facility is assessed at 1.25% above Euro LIBOR, which amounted to 5.65% on
      September 29, 2007. The term loan matures in 2013 and the interest rate is
      assessed at 5.62%. The long-term mortgage note matures in March 2023 and is
      assessed interest at a fixed rate of 5.19%.





In
      December 2005, the company entered into a $3.2 million U.S. dollar secured
      term
      loan at its subsidiary in Spain. As of September 29, 2007, the company had
      fully
      repaid the borrowings under this loan.





The
      company has historically entered into interest rate swap agreements to
      effectively fix the interest rate on its outstanding debt. In January 2005,
      the
      company entered into an interest rate swap agreement for a notional amount
      of
      $70.0 million. This agreement swaps one-month LIBOR for a fixed rate of 3.78%.
      The notional amount amortizes consistent with the repayment schedule of the
      company's term loan maturing November 2009. The unamortized notional amount
      of
      this swap as of September 29, 2007 was $36.3 million. In January 2006, the
      company entered into an interest rate swap agreement for a notional amount
      of
      $10.0 million maturing on December 21, 2009. This agreement swaps one-month
      LIBOR for a fixed rate of 5.03%.





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. At
      September 29, 2007, the company was in compliance with all covenants pursuant
      to
      its borrowing agreements.





**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.





13




*Foreign
      Exchange* :
      The
      company has entered into derivative instruments, principally forward contracts
      to reduce exposures pertaining to fluctuations in foreign exchange rates. As
      of
      September 29, 2007 the company had no forward contracts
      outstanding.





*Interest
      Rate* : In
      January 2005, the company entered into an interest rate swap with a notional
      amount of $70.0 million to fix the interest rate applicable to certain of its
      variable-rate debt. The notional amount of the swap amortizes consistent with
      the repayment schedule of the company's senior term loan maturing in November
      2009. As of September 29, 2007, the unamortized balance of the interest rate
      swap was $36.3 million. The agreement swaps one-month LIBOR for a fixed rate
      of
      3.78% and is in effect through November 2009. The company designated the swap
      as
      a cash flow hedge at its inception and all changes in the fair value of the
      swap
      are recognized in accumulated other comprehensive income. As of September 29,
      2007, the fair value of this instrument was $0.4 million. The change in fair
      value of this swap agreement in the first nine months of 2007 was a loss of
      $0.4
      million, net of taxes.





In
      January 2006, the company entered into another interest rate swap with a
      notional amount of $10.0 million to fix the interest rate applicable to certain
      of its variable-rate debt. The agreement swaps one-month LIBOR for a fixed
      rate
      of 5.03% and is in effect through December 2009. The company designated the
      swap
      a cash flow hedge at is inception and all changes in fair value of the swap
      are
      recognized in accumulated other comprehensive income. As of September 29, 2007,
      the fair value of this instrument was $0.1 million. The change in fair value
      of
      this swap agreement in the first nine months of 2007 was a gain of $0.1 million,
      net of taxes.




**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, Nevada, New
      Hampshire, North Carolina, 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, 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.





14


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.




**Net
      Sales Summary**


**(dollars
      in thousands)**





Three
                Months Ended
            
            Nine
                Months EndedSep.
                29, 2007
            
            Sep.
                30, 2006
            
            Sep.
                29, 2007
            
            Sep.
                30, 2006Sales
            
            Percent
            
            Sales
            
            Percent
            
            Sales
            
            Percent
            
            Sales
            
            PercentBusiness
                Divisions:Commercial
                Foodservice
            
            $
            109,667
            
            
            80.6
            
            $
            81,500
            
            
            78.9
            
            
            290,597
            
            
            81.9
            
            
            243,940
            
            
            80.0Food
                Processing
            
            
            20,780
            
            
            15.3
            
            
            15,389
            
            
            14.9
            
            
            46,329
            
            
            13.0
            
            
            43,909
            
            
            14.4International
                Distribution(1)
            
            
            15,059
            
            
            11.1
            
            
            14,023
            
            
            13.6
            
            
            43,156
            
            
            12.2
            
            
            41,602
            
            
            13.6Intercompany
                sales (2)
            
            
            (9,510
            )
            
            (7.0
            )
            
            (7,673
            )
            
            (7.4
            )
            
            (25,143
            )
            
            (7.1
            )
            
            (24,614
            )
            
            (8.0
            )Total
            
            $
            135,996
            
            
            100.0
            %
            $
            103,239
            
            
            100.0
            %
            $
            354,939
            
            
            100.0
            %
            $
            304,837
            
            
            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.*




15


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 September 29, 2007**Net
                  sales
              
              $
              109,667
              
              $
              20,780
              
              $
              15,059
              
              $
              —
              
              $
              (9,510
              )
              $
              135,996Operating
                  income
              
              
              25,155
              
              
              4,009
              
              
              1,245
              
              
              (5,267
              )
              
              282
              
              
              25,424Depreciation
                  expense
              
              
              898
              
              
              131
              
              
              41
              
              
              36
              
              
              —
              
              
              1,106Net
                  capital expenditures
              
              
              508
              
              
              53
              
              
              52
              
              
              7
              
              
              —
              
              
              620**Nine
                  months ended September 29, 2007**Net
                  sales
              
              $
              290,597
              
              $
              46,329
              
              $
              43,156
              
              $
              —
              
              $
              (25,143
              )
              $
              354,939Operating
                  income
              
              
              69,234
              
              
              10,026
              
              
              3,227
              
              
              (17,748
              )
              
              693
              
              
              65,432Depreciation
                  expense
              
              
              2,401
              
              
              381
              
              
              125
              
              
              109
              
              
              —
              
              
              3,016Net
                  capital expenditures
              
              
              1,436
              
              
              65
              
              
              107
              
              
              81
              
              
              —
              
              
              1,689Total
                  assets
              
              
              280,999
              
              
              73,931
              
              
              28,741
              
              
              11,741
              
              
              (8,116
              )
              
              387,296Long-lived
                  assets(4)
              
              
              166,241
              
              
              43,948
              
              
              456
              
              
              10,430
              
              
              —
              
              
              221,075**Three
                  months ended September 30, 2006**Net
                  sales
              
              $
              81,500
              
              $
              15,389
              
              $
              14,023
              
              $
              —
              
              $
              (7,673
              )
              $
              103,239Operating
                  income
              
              
              22,032
              
              
              3,302
              
              
              694
              
              
              (5,150
              )
              
              143
              
              
              21,021Depreciation
                  expense
              
              
              657
              
              
              132
              
              
              63
              
              
              32
              
              
              —
              
              
              884Net
                  capital expenditures
              
              
              291
              
              
              6
              
              
              51
              
              
              3
              
              
              —
              
              
              351**Nine
                  months ended September 30, 2006**Net
                  sales
              
              $
              243,940
              
              $
              43,909
              
              $
              41,602
              
              $
              —
              
              $
              (24,614
              )
              $
              304,837Operating
                  income
              
              
              64,205
              
              
              5,866
              
              
              2,558
              
              
              (15,629
              )
              
              (552
              )
              
              56,448Depreciation
                  expense
              
              
              2,020
              
              
              408
              
              
              133
              
              
              30
              
              
              —
              
              
              2,591Net
                  capital expenditures
              
              
              734
              
              
              101
              
              
              99
              
              
              302
              
              
              —
              
              
              1,236Total
                  assets
              
              
              206,447
              
              
              48,318
              
              
              26,960
              
              
              7,856
              
              
              (6,119
              )
              
              283,462Long-lived
                  assets(4)
              
              
              130,382
              
              
              25,964
              
              
              486
              
              
              9,801
              
              
              —
              
              
              166,633
 
 *(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 expenses
                  items
                  outside of income from operations.**(2)*
              *Includes
                  corporate and other general company assets and
                  operations.**(3)*
              *Includes
                  elimination of intercompany sales, profit in inventory and intercompany
                  receivables. Intercompany sale transactions are predominantly from
                  the
                  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 $1,937 and $2,009
                  in 2007 and
                  2006, respectively and assets located in Denmark which amounted
                  to $1,645
                  in 2007 and $1,688 in 2006 .*
  16
  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 Ended
              
              Nine
                  Months EndedSep.
                  29, 2007
              
              Sep.
                  30, 2006
              
              Sep.
                  29, 2007
              
              Sep.
                  30, 2006United
                  States and Canada
              
              $
              109,291
              
              $
              84,035
              
              $
              286,832
              
              $
              248,802Asia
              
              
              10,003
              
              
              5,932
              
              
              2,645
              
              
              19,488Europe
                  and Middle East
              
              
              11,994
              
              
              9,028
              
              
              35,266
              
              
              23,770Latin
                  America
              
              
              4,708
              
              
              4,244
              
              
              11,196
              
              
              12,777Net
                  sales
              
              $
              135,996
              
              $
              103,239
              
              $
              354,939
              
              $
              304,837
  **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. Expected contributions to be made
        in
        2007 are $46,000, of which $46,000 was funded during the nine-month period
        ended
        September 29, 2007. 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.
  17


**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 2006 Annual Report on Form 10-K.




18




**Net
      Sales Summary**


**(dollars
      in thousands)**





Three Months Ended
            
            Nine Months EndedSep. 29, 2007
            
            Sep. 30, 2006
            
            Sep. 29, 2007
            
            Sep. 30, 2006Sales
            
            Percent
            
            Sales
            
            Percent
            
            Sales
            
            Percent
            
            Sales
            
            PercentBusiness
                Divisions:Commercial
                Foodservice
            
            $
            109,667
            
            
            80.6
            
            $
            81,500
            
            
            78.9
            
            
            290,597
            
            
            81.9
            
            
            243,940
            
            
            80.0Food
                Processing
            
            
            20,780
            
            
            15.3
            
            
            15,389
            
            
            14.9
            
            
            46,329
            
            
            13.0
            
            
            43,909
            
            
            14.4International
                Distribution(1)
            
            
            15,059
            
            
            11.1
            
            
            14,023
            
            
            13.6
            
            
            43,156
            
            
            12.2
            
            
            41,602
            
            
            13.6Intercompany
                sales (2)
            
            
            (9,510
            )
            
            (7.0
            )
            
            (7,673
            )
            
            (7.4
            )
            
            (25,143
            )
            
            (7.1
            )
            
            (24,614
            )
            
            (8.0
            )Total
            
            $
            135,996
            
            
            100.0
            %
            $
            103,239
            
            
            100.0
            %
            $
            354,939
            
            
            100.0
            %
            $
            304,837
            
            
            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 Ended
            
            Nine Months EndedSep. 29, 2007
            
            Sep. 30, 2006
            
            Sep. 29, 2007
            
            Sep. 30, 2006Net
                sales
            
            
            100.0
            %
            
            100.0
            %
            
            100.0
            %
            
            100.0
            %Cost
                of sales
            
            
            62.2
            
            
            60.7
            
            
            61.3
            
            
            61.3Gross
                profit
            
            
            37.8
            
            
            39.3
            
            
            38.7
            
            
            38.7Selling,
                general and administrative expenses
            
            
            19.1
            
            
            18.9
            
            
            20.3
            
            
            20.2Income
                from operations
            
            
            18.7
            
            
            20.4
            
            
            18.4
            
            
            18.5Net
                interest expense and deferred financing amortization
            
            
            1.2
            
            
            1.6
            
            
            1.2
            
            
            1.8Other
                (income) expense, net
            
            
            (0.2
            )
            
            –
            
            
            (0.3
            )
            
            –Earnings
                before income taxes
            
            
            17.7
            
            
            18.8
            
            
            17.5
            
            
            16.7Provision
                for income taxes
            
            
            7.4
            
            
            7.0
            
            
            7.0
            
            
            6.4Net
                earnings
            
            
            10.3
            %
            
            11.8
            %
            
            10.5
            %
            
            10.3
            %




19





**Three
      Months Ended September 29, 2007 Compared to Three Months Ended** **September
      30, 2006**





**NET
      SALES** ***.***  Net
      sales
      for the third quarter of fiscal 2007 were $136.0 million as compared to $103.2
      million in the third quarter of 2006.





Net
      sales
      at the Commercial Foodservice Equipment Group amounted to $111.4 million in
      the
      third quarter of 2007 as compared to $82.6 million in the prior year quarter.





Net
      sales
      from the acquisitions of Houno, Jade, Carter-Hoffmann and Wells Bloomfield
      which
      were acquired on August 31, 2006. April 1, 2007, June 29, 2007 and August 3,
      2007 respectively, accounted for an increase of $21.8 million during the third
      quarter of 2007.





Net
      sales
      of conveyor ovens were $0.4 million lower than the prior year third quarter
      due
      to a work stoppage that occurred at the Elgin, Illinois production facility
      that
      began on May 17, 2007 after the unionized workforce failed to ratify a final
      contract proposal of an expired collective bargaining agreement.  On July
      30, 2007, the company announced it had entered into a new collective bargaining
      agreement with its Elgin, Illinois unionized workforce bringing an end to the
      work stoppage.





Excluding
      the impact of acquisitions and the sales of conveyor ovens impacted by the
      work
      stoppage, net sales of commercial foodservice equipment increased $6.4 million
      driven by increased sales of combi-ovens, convection ovens, and ranges,
      reflecting the impact of new product introductions and price
      increases.





Net
      sales
      for the Food Processing Equipment Group amounted to $20.8 million in the third
      quarter of 2007 as compared to $15.4 million in the prior year quarter. Net
      sales of MP Equipment, which was acquired on July 2, 2007, accounted for an
      increase of $6.6 million. Excluding the impact of acquisitions, net sales of
      food processing equipment decreased $1.6 million due to acquisition integration
      initiatives put in place to eliminate low margin and unprofitable
      sales.





Net
      sales
      at the International Distribution Division increased by $1.0 million to $15.1
      million, reflecting higher sales in Asia, Europe and Latin America.




**GROSS
      PROFIT** ***.***  Gross
      profit increased to $51.4 million in the third quarter of 2007 from $40.6
      million in the prior year period, reflecting the impact of higher sales volumes.
      The gross margin rate was 37.8% in the third quarter of 2007 as compared to
      39.3% in the prior year quarter. The net decrease in the gross margin rate
      reflects:




·
            Lower
                margins at the Elgin, Illinois manufacturing facility which was adversely
                impacted by the work stoppage.





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





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




20




**SELLING,
      GENERAL AND ADMINISTRATIVE EXPENSES** ***.***  Combined
      selling, general, and administrative expenses increased from $19.6 million
      in
      the third quarter of 2006 to $26.0 million in the third quarter of 2007. As
      a
      percentage of net sales, operating expenses increased from 18.9% in the third
      quarter of 2006 to 19.1% in the third quarter of 2007. Selling expenses
      increased from $10.0 million in the third quarter of 2006 to $13.5 million
      in
      the third quarter of 2007, reflecting $3.1 million of incremental costs
      associated with the acquisitions of Houno, completed in August 2006, Jade
      completed on April 1, 2007, Carter-Hoffmann, completed June 29, 2007, MP
      Equipment, completed July 2, 2007 and Wells Bloomfield, completed August 3,
      2007. General and administrative expenses increased from $9.5 million in the
      third quarter of 2006 to $12.5 million in the third quarter of 2007. General
      and
      administrative expenses reflects $2.1 million of costs associated with the
      acquired operations of Houno, Jade, Carter-Hoffmann, MP Equipment and Wells
      Bloomfield. Increased general and administrative costs also include increased
      incentive compensation costs.





**NON-OPERATING
      EXPENSES.** Interest
      and deferred financing amortization costs of $1.6 million in the third quarter
      of 2007 remained consistent with the third quarter of 2006, as the benefit
      of
      lower debt balances was offset in part by higher interest rates. Other income
      of
      $0.3 million in the third quarter of 2007 compared favorably to other income
      of
      less than $0.1 million in the prior year third quarter and was comprised
      primarily of foreign exchange gains.





**INCOME
      TAXES** ***.***  A
      tax
      provision of $10.1 million, at an effective rate of 42%, was recorded during
      the
      third quarter of 2007, as compared to a $7.3 million provision at a 37%
      effective rate in the prior year quarter. The 2007 third quarter provision
      included increased reserves for state tax audits and exposures.





**Nine
      Months Ended September 29, 2007 Compared to Nine Months Ended
      September 30, 2006**





**NET
      SALES** ***.***  Net
      sales
      for the nine-month period ended September 29, 2007 were $354.9 million as
      compared to $304.8 in the nine-month period ended September 30, 2006.





Net
      sales
      at the Commercial Foodservice Equipment Group amounted to $295.0 million in
      the
      nine-month period ended September 29, 2007 as compared to $247.7 million in
      the
      nine-month period ended September 30, 2006.





Net
      sales
      from the acquisitions of Houno, Jade, Carter-Hoffmann and Wells Bloomfield
      which
      were acquired on August 31, 2006, April 1, 2007, June 29, 2007 and August 3,
      2007 respectively, accounted for an increase of $32.7 million during the first
      nine months of 2007.





Net
      sales
      of conveyor ovens increased $0.8 million in the nine-month period ended
      September 29, 2007 as compared to the nine-month period ended September 30,
      2006. Net
      sales
      of conveyor ovens had increased $4.5 million in the first quarter of 2007 as
      compared to the 2006 first quarter due to increased sales of new product, and
      decreased $3.7 million in the combined second and third quarters due to a work
      stoppage that occurred at the Elgin, Illinois production facility that began
      on
      May 17, 2007 after the unionized workforce failed to ratify a final contract
      proposal of an expired collective bargaining agreement.  On July 30, 2007,
      subsequent to the end of the second quarter the company announced it had entered
      into a new collective bargaining agreement with its Elgin, Illinois unionized
      workforce bringing an end to the work stoppage.




21




Excluding
      the impact of acquisitions and the decrease in sales of conveyor ovens impacted
      by the work stoppage, net sales of commercial foodservice equipment increased
      $26.7 million for the nine-month period ended September 29, 2007 compared to
      the
      nine-month period ended September 30, 2006.  The net increase includes
      increased sales of combi-ovens, convection ovens, fryers and ranges, reflecting
      the impact of new product introductions and price increases.





Net
      sales
      for the Food Processing Equipment Group amounted to $46.3 million for the
      nine-month period ended September 29, 2007 as compared to $43.9 million for
      the
      prior year period. Net sales of MP Equipment, which was acquired on July 2,
      2007, accounted for an increase of $6.6 million. Excluding the impact of
      acquisitions, net sales of food processing equipment decreased $4.2 million
      due
      to acquisition integration initiatives put in place to eliminate low margin
      and
      unprofitable sales.




Net
        sales
        at the International Distribution Division increased from $41.6 million for
        the
        nine-month period ended September 30, 2006 to $43.2 million for the nine-month
        period ended September 29, 2007, reflecting higher sales in Europe and Asia,
        which more than offset a decline in sales in Mexico. International sales
        benefited from expansion of the U.S. chains overseas and increased business
        with
        local and regional restaurant chains in developing markets.
 **GROSS
        PROFIT** ***.***  Gross
        profit increased to $137.4 million for the nine-month period ended September
        29,
        2007 from $117.81 million in the nine-month period, ended September 30, 2006,
        reflecting the impact of higher sales volumes. The gross margin rate was
        38.7%
        for the nine-month period ended September 29, 2007 and remained consistent
        with
        the nine-month period ended September 30, 2006. The gross margin rate
        reflects:




·
            Lower
                margins at the Elgin, Illinois manufacturing facility which was adversely
                impacted by the work stoppage.





·
            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
                and
                Wells Bloomfield operations which are in the process of being integrated
                within the company.





·
            Improved
                margins at the Food Processing Equipment Group, which was acquired
                in
                December 2005, resulting from cost reduction initiatives and elimination
                of unprofitable sales.





·
            Increased
                sales volumes that benefited manufacturing efficiencies and provided
                for
                greater leverage of fixed manufacturing
                costs.





·
            Higher
                margins associated with new product
                sales.





22




**SELLING,
      GENERAL AND ADMINISTRATIVE EXPENSES** ***.***  Combined
      selling, general, and administrative expenses increased from $61.4 million
      in
      the nine-month period ended September 30, 2006 to $72.0 million in the
      nine-month period ended September 29, 2007. As a percentage of net sales,
      operating expenses increased from 20.2% in the nine-month period ended September
      30, 2006, to 20.3% in the nine-month period ended September 29, 2007. Selling
      expenses increased from $30.9 million in the nine-month period ended September
      30, 2006, to $36.6 million in the nine-month period ended September 29, 2007,
      reflecting $4.6 million of increased costs associated with the newly acquired
      operations of Houno, Jade, Carter-Hoffmann, MP Equipment and Wells Bloomfield
      and $1.3 million of higher commission costs associated with the increased sales
      volumes. General and administrative expenses increased from $30.5 million in
      the
      nine-month period ended September 30, 2006, to $35.4 million in the nine-month
      period ended September 29, 2007, which includes increased costs of $2.9 million
      associated with the newly acquired operations of Houno, Jade, Carter-Hoffmann,
      MP Equipment and Wells Bloomfield. General and administrative expenses also
      includes increased employee incentive performance costs.




**NON-OPERATING
      EXPENSES.** Interest
      and deferred financing amortization costs decreased to $4.1 million for the
      nine-month period ended September 29, 2007 from $5.4 million in the prior year
      period, as the benefit of lower debt balances were offset in part by higher
      interest rates. Other income was $1.1 million for the nine-month period ended
      September 29, 2007, which primarily consisted of foreign exchange gains,
      compared to other expense of less than $0.1 million for the nine-month period
      ended September 30, 2006.





**INCOME
      TAXES** ***.***  A
      tax
      provision of $25.0 million, at an effective rate of 40%, was recorded for the
      first nine months of 2007 as compared to a $19.6 million provision at a 39%
      effective rate in the prior year period.





**Financial
      Condition and Liquidity**





During
      the nine months ended September 29, 2007, cash and cash equivalents increased
      by
      $4.1 million to $7.6 million at September 29, 2007 from $3.5 million at December
      30, 2006. Net borrowings increased from $82.8 million at December 30, 2006
      to
      $107.8 million at September 29, 2007.





**OPERATING
      ACTIVITIES** ***.***  Net
      cash
      provided operating activities was $46.0 million for the nine-month period ended
      September 29, 2007 compared to $33.4 million for the nine-month period ended
      September 30, 2006.





During
      the nine months ended September 29, 2007, working capital levels increased
      due
      to the higher sales volumes and increased seasonal working capital needs. The
      changes in working capital included a $5.7 increase in accounts receivable,
      a
      $3.0 million increase in inventory, a $4.6 million increase in prepaid expenses
      and other assets, a $6.9 million increase in accounts payable and a $3.2 million
      increase in accrued expenses and non-current liabilities.





**INVESTING
      ACTIVITIES** ***.***  During
      the nine months ended September 29, 2007, net cash used in investing activities
      amounted to $69.8 million. This includes $0.2 million associated with the
      acquisition of Houno, $7.8
      million associated with the acquisition of Jade, $16.2 million associated with
      the acquisition of Carter-Hoffmann, $15.2 million associated with the
      acquisition of MP Equipment, $28.8 million associated with the acquisition
      of
      Wells Bloomfield and $1.7 million of capital expenditures associated with
      additions and upgrades of production and marketing equipment.





23




**FINANCING
      ACTIVITIES.** Net
      cash
      flows provided by financing activities were $27.8 million during the nine months
      ended September 29, 2007. The net increase in debt includes $36.8 million in
      borrowings under the revolving credit facility, $11.3 million of repayments
      of
      the company’s term loan and $0.8 million of repayments of foreign bank loans.
      The company also received $3.1 million of net proceeds from the exercise of
      employee stock options.





At
      September 29, 2007, 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
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. This
      statement defines fair value, establishes a framework for measuring fair value
      in generally accepted accounting principles and expands disclosures about fair
      value measurements. This statement does not require any new fair value
      measurements. This statement is effective for interim reporting periods in
      fiscal years beginning after November 15, 2007. The company will apply this
      guidance prospectively. The company is continuing its process of determining
      what impact the application of this guidance will have on the company's
      financial position, results of operations or cash flows.





In
      September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements
      No. 87, 88, 106, and 132(R)”. One provision of SFAS No. 158 requires the
      measurement of the company’s defined benefit plan’s assets and its obligation to
      determine the funded status be made as of the end of the fiscal year. This
      provision of SFAS No. 158 is effective for fiscal years ending after December
      15, 2008. The company does not anticipate that the impact from the adoption
      of
      this provision of SFAS No. 158 will be significant to its financial
      statements.





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 company will
      apply this guidance prospectively. The company is continuing its process of
      determining what impact the application of this guidance will have on the
      company's financial position, results of operations or cash flows.




24




**Critical
      Accounting Policies and Estimates**





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





*Property
      and equipment:*  Property
      and equipment are depreciated or amortized on a straight-line basis over their
      useful lives based on management's estimates of the period over which the assets
      will 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.





*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.





25




*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 is more likely than not, based on the technical merits, that the
      position will be sustained upon examination. For tax positions that meet the
      more-likely-than-not recognition threshold, the company initially and
      subsequently measures it tax positions as the largest amount of tax benefit
      that
      is greater than 50 percent likely of being realized upon effective settlement
      with a 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 September 29, 2007 are
      set
      forth below (in thousands):





TotalDeferred
            
            
            
            
            
            Idle
            
            ContractualAcquisition
            
            Long-term
            
            Operating
            
            Facility
            
            CashCosts
            
            Debt
            
            Leases
            
            Leases
            
            ObligationsLess
                than 1 year
            
            $
            —
            
            $
            16,765
            
            $
            2,271
            
            $
            336
            
            $
            19,3721-3
                years
            
            
            2,000
            
            
            88,307
            
            
            3,434
            
            
            766
            
            
            94,5073-5
                years
            
            
            —
            
            
            111
            
            
            785
            
            
            882
            
            
            1,778After
                5 years
            
            
            —
            
            
            2,665
            
            
            —
            
            
            1,289
            
            
            3,954$
            2,000
            
            $
            107,848
            
            $
            6,490
            
            $
            3,273
            
            $
            119,611





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 December 2014. This facility has been
      subleased. The obligation presented above does not reflect any anticipated
      sublease income from the facilities.





The
      projected benefit obligation of the company’s defined benefit plans exceeded the
      plans’ assets by $3.5 million at the end of 2006 as compared to $2.4 million at
      the end of 2005. The unfunded benefit obligations were comprised of a $0.7
      million under funding of the company's union plan and $2.8 million of under
      funding of the company's director plans. The company does not expect to
      contribute to the director plans in 2007. The company made minimum contributions
      required by the Employee Retirement Income Security Act of 1974 (“ERISA”) of
      $0.2 million in 2006 to the company's union plan. The company expects to
      continue to make minimum contributions of $0.2 million in 2007 to the union
      plan
      as required by ERISA.





The
      company has $5.1 million in outstanding letters of credit, which expire on
      September 29, 2008 with an automatic one-year renewal, to secure potential
      obligations under insurance programs.




26




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




27


**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)September
                29, 2008
            
            $
            —
            
            $
            16,765September
                29, 2009
            
            
            —
            
            
            16,976September
                29, 2010
            
            
            —
            
            
            71,331September
                29, 2011
            
            
            —
            
            
            111September
                29, 2012
            
            
            862
            
            
            1,803$
            862
            
            $
            106,986





During
      the fourth quarter of 2005, the company amended its senior secured credit
      facility. Terms of the agreement currently provide for $36 million of term
      loans
      and $130.0 million of availability under a revolving credit line. As of
      September 29, 2007, the company had $103.1 million outstanding under its senior
      banking facility, including $66.8 million of borrowings under the revolving
      credit line. The company also had $5.1 million in outstanding letters of credit,
      which reduced the borrowing availability under the revolving credit
      line.





Borrowings
      under the senior secured credit facility are assessed at an interest rate of
      1.00% above LIBOR for long-term borrowings or at the higher of the Prime rate
      and the Federal Funds Rate for short-term borrowings. At September 29, 2007,
      the
      average interest rate on the senior debt amounted to 6.46%. 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 0.20% as of September 29, 2007.





In
      August
      2006, the company completed its acquisition of Houno in Denmark.  This
      acquisition was funded in part with locally established debt facilities with
      borrowings in Danish Krone.  As of September 29, 2007 these facilities
      amounted to $4.7 million in U.S. dollars, including $1.6 million outstanding
      under a revolving credit facility, $2.2 million of a term loan and $0.9 million
      of a long term mortgage note.  The interest rate on the revolving credit
      facility is assessed at 1.25% above Euro LIBOR, which amounted to 5.65% on
      September 29, 2007. The term loan matures in 2013 and the interest rate is
      assessed at 5.62%.  The long-term mortgage note matures in March 2023 and
      is assessed interest at a fixed rate of 5.19%.





In
      December 2005, the company entered into a $3.2 million U.S. dollar secured
      term
      loan at its subsidiary in Spain. As of September 29, 2007, the company had
      fully
      repaid the borrowings remaining under this loan.




28




The
      company has historically entered into interest rate swap agreements to
      effectively fix the interest rate on its outstanding debt. In January 2005,
      the
      company entered into an interest rate swap agreement for a notional amount
      of
      $70.0 million. This agreement swaps one-month LIBOR for a fixed rate of 3.78%.
      The notional amount amortizes consistent with the repayment schedule of the
      company's term loan maturing November 2009. The unamortized notational amount
      of
      this swap as of September 29, 2007 was $36.3 million. In January 2006, the
      company entered into an interest rate swap for a notional amount of $10.0
      million maturing on December 31, 2009. This agreement swaps one-month LIBOR
      for
      a fixed rate of 5.03%.





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. At
      September 29, 2007, the company was in compliance with all covenants pursuant
      to
      its borrowing agreements.





**Financing
      Derivative Instruments**





In
      January 2005, the company entered into an interest rate swap with a notional
      amount of $70.0 million to fix the interest rate applicable to certain of its
      variable-rate debt. The notional amount of the swap amortizes consistent with
      the repayment schedule of the company's senior term loan maturing in November
      2009. The agreement swaps one-month LIBOR for a fixed rate of 3.78% and is
      in
      effect through November 2009. The interest rate swap has been designated a
      cash
      flow hedge, and in accordance with SFAS No. 133 the changes in fair value are
      recorded as a component of accumulated other comprehensive income. As of
      September 29, 2007, the fair value of this instrument was $0.4 million. The
      change in fair value of this swap agreement in the first nine months of 2007
      was
      a loss of $0.4 million, net of $0.2 million of taxes. In January 2006, the
      company entered into an interest rate swap agreement for a notional amount
      of
      $10.0 million maturing on December 21, 2009. This agreement swaps one month
      LIBOR for a fixed rate of 5.03%. The interest rate swap has been designated
      a
      cash flow hedge, and in accordance with SFAS No. 133 the changes in fair value
      are recorded as a component of accumulated other comprehensive income. As of
      September 29, 2007, the fair value of this instrument was $0.1 million. The
      change in fair value of this swap agreement in the first nine months of 2007
      was
      a gain of $0.1 million, net of less than $0.1 million of taxes.




29




**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.




30




**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
      September 29, 2007, 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 September 29, 2007, 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.




31




**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 nine months ended September 29, 2007, 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*





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
      September 29, 2007, 952,999 shares had been purchased under the 1998 stock
      repurchase program. No shares were repurchased by the company during the nine
      month period ended September 29, 2007.





**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).


32


**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
                November 8, 2007
            By:
            /s/
                Timothy J. FitzGeraldTimothy
                J. FitzGeraldVice
                President,Chief
                Financial Officer





33