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 April 4, 2009





or


 ̈
            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
                    Incorporation
      or Organization)
                  
                  (I.R.S.
      Employer Identification No.)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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).


Yes x    No  o





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


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





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





As of May
8, 2009, there were 18,527,037 shares of the registrant's common stock
outstanding.





THE MIDDLEBY CORPORATION AND
SUBSIDIARIES





QUARTER ENDED APRIL 4,
2009





INDEX





DESCRIPTION
                                    
                                    PAGEPART
      I.  FINANCIAL INFORMATIONItem
      1.    Condensed Consolidated Financial Statements
      (unaudited)CONDENSED
      CONSOLIDATED BALANCE SHEETS April 4, 2009 and January 3,
      2009
                                    
                                    1CONDENSED
      CONSOLIDATED STATEMENTS OF EARNINGS April 4, 2009 and March 29,
      2008
                                    
                                    2CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS April 4, 2009 and March 29,
      2008
                                    
                                    3NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    
                                    4Item
      2.    Management's Discussion and Analysis of Financial
      Condition and Results of Operations
                                    
                                    22Item
      3.    Quantitative and Qualitative Disclosures About Market
      Risk
                                    
                                    31Item
      4.    Controls and Procedures
                                    
                                    34PART
      II. OTHER INFORMATIONItem
      2.    Unregistered Sales of Equity Securities and Use of
      Proceeds
                                    
                                    35Item
      6.    Exhibits
                                    
                                    36





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)





April 4, 2009
                      
                      
                      January 3, 2009ASSETSCurrent
      assets:Cash
      and cash equivalents
                      
                      $
                      8,849
                      
                      
                      $
                      6,144Accounts
      receivable, net of reserve for doubtful accounts of $7,613 and
      $6,598
                      
                      
                      107,436
                      
                      
                      
                      85,969Inventories,
      net
                      
                      
                      96,596
                      
                      
                      
                      91,551Prepaid
      expenses and other
                      
                      
                      7,621
                      
                      
                      
                      7,646Current
      deferred taxes
                      
                      
                      30,105
                      
                      
                      
                      18,387Total
      current assets
                      
                      
                      250,607
                      
                      
                      
                      209,697Property,
      plant and equipment, net of accumulated depreciation of $42,065 and
      $40,370
                      
                      
                      48,792
                      
                      
                      
                      44,757Goodwill
                      
                      
                      334,839
                      
                      
                      
                      266,663Other
      intangibles
                      
                      
                      194,753
                      
                      
                      
                      125,501Other
      assets
                      
                      
                      2,989
                      
                      
                      
                      3,314Total
      assets
                      
                      $
                      831,980
                      
                      
                      $
                      649,932LIABILITIES AND STOCKHOLDERS'
      EQUITYCurrent
      liabilities:Current
      maturities of long-term debt
                      
                      $
                      5,628
                      
                      
                      $
                      6,377Accounts
      payable
                      
                      
                      44,961
                      
                      
                      
                      32,543Accrued
      expenses
                      
                      
                      119,985
                      
                      
                      
                      102,579Total
      current liabilities
                      
                      
                      170,574
                      
                      
                      
                      141,499Long-term
      debt
                      
                      
                      340,461
                      
                      
                      
                      228,323Long-term
      deferred tax liability
                      
                      
                      15,248
                      
                      
                      
                      33,687Other
      non-current liabilities
                      
                      
                      21,984
                      
                      
                      
                      23,029Stockholders'
      equity:Preferred
      stock, $0.01 par value; nonvoting; 2,000,000 shares authorized; none
      issued
                      
                      
                      —
                      
                      
                      
                      —Common
      stock, $0.01 par value; 47,500,000 shares authorized; 22,603,350 and
                        21,068,556
      shares issued in 2009 and 2008, respectively
                      
                      
                      136
                      
                      
                      
                      120Paid-in
      capital
                      
                      
                      154,062
                      
                      
                      
                      107,305Treasury
      stock at cost; 4,069,913 and 4,074,713 shares in 2009 and 2008,
      respectively
                      
                      
                      (102,000
                      )
                      
                      
                      (102,000
                      )Retained
      earnings
                      
                      
                      240,298
                      
                      
                      
                      226,231Accumulated
      other comprehensive income
                      
                      
                      (8,783
                      )
                      
                      
                      (8,262
                      )Total
      stockholders' equity
                      
                      
                      283,713
                      
                      
                      
                      223,394Total
      liabilities and stockholders' equity
                      
                      $
                      831,980
                      
                      
                      $
                      649,932





See
accompanying notes


1


THE MIDDLEBY CORPORATION AND
SUBSIDIARIES


CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS


(In
Thousands, Except Per Share Data)


(Unaudited)





Three Months EndedApr 4, 2009
                                        
                                        
                                        Mar 29, 2008Net
      sales
                                        
                                        $
                                        181,546
                                        
                                        
                                        $
                                        160,883Cost
      of sales
                                        
                                        
                                        112,776
                                        
                                        
                                        
                                        101,981Gross
      profit
                                        
                                        
                                        68,770
                                        
                                        
                                        
                                        58,902Selling
      expenses
                                        
                                        
                                        16,306
                                        
                                        
                                        
                                        16,245General
      and administrative expenses
                                        
                                        
                                        24,373
                                        
                                        
                                        
                                        16,641Income
      from operations
                                        
                                        
                                        28,091
                                        
                                        
                                        
                                        26,016Net
      interest expense and deferred financing amortization
                                        
                                        
                                        3,146
                                        
                                        
                                        
                                        3,703Other
      expense, net
                                        
                                        
                                        284
                                        
                                        
                                        
                                        387Earnings
      before income taxes
                                        
                                        
                                        24,661
                                        
                                        
                                        
                                        21,926Provision
      for income taxes
                                        
                                        
                                        10,594
                                        
                                        
                                        
                                        8,745Net
      earnings
                                        
                                        $
                                        14,067
                                        
                                        
                                        $
                                        13,181Net
      earnings per share:Basic
                                        
                                        $
                                        0.80
                                        
                                        
                                        $
                                        0.82Diluted
                                        
                                        $
                                        0.77
                                        
                                        
                                        $
                                        0.77Weighted
      average number of sharesBasic
                                        
                                        
                                        17,584
                                        
                                        
                                        
                                        16,055Dilutive
      stock options1
                                        
                                        
                                        586
                                        
                                        
                                        
                                        1,115Diluted
                                        
                                        
                                        18,170
                                        
                                        
                                        
                                        17,170





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





See
accompanying notes


2


THE MIDDLEBY CORPORATION AND
SUBSIDIARIES


CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS


(In
Thousands)


(Unaudited)





Three Months EndedApr 4, 2009
                
                
                Mar 29, 2008Cash
      flows from operating activities-Net
      earnings
                
                $
                14,067
                
                
                $
                13,181Adjustments
      to reconcile net earnings to cash provided by operating
      activities:Depreciation
      and amortization
                
                
                5,205
                
                
                
                3,533Deferred
      taxes
                
                
                (269
                )
                
                
                2,512Non-cash
      share-based compensation
                
                
                2,725
                
                
                
                2,350Unrealized
      loss on derivative financial instruments
                
                
                48
                
                
                
                204Changes
      in assets and liabilities, net of acquisitionsAccounts
      receivable, net
                
                
                (8,668
                )
                
                
                815Inventories,
      net
                
                
                5,562
                
                
                
                (1,558
                )Prepaid
      expenses and other assets
                
                
                542
                
                
                
                3,767Accounts
      payable
                
                
                5,559
                
                
                
                5,461Accrued
      expenses and other liabilities
                
                
                (14,880
                )
                
                
                (17,702
                )Net
      cash provided by operating activities
                
                
                9,891
                
                
                
                12,563Cash
      flows from investing activities-Net
      additions to property and equipment
                
                
                (1,870
                )
                
                
                (2,124
                )Acquisition
      of TurboChef, net of cash acquired
                
                
                (116,078
                )Acquisition
      of Star
                
                
                —
                
                
                
                (188,068
                )Net
      cash (used in) investing activities
                
                
                (117,948
                )
                
                
                (190,192
                )Cash
      flows from financing activities-Net
      proceeds under revolving credit facilities
                
                
                112,250
                
                
                
                176,350Net
      payments under foreign bank loan
                
                
                (505
                )
                
                
                (245
                )Debt
      issuance costs
                
                
                —
                
                
                
                (162
                )Repurchase
      of treasury stock
                
                
                —
                
                
                
                (373
                )Net
      proceeds from stock issuances
                
                
                —
                
                
                
                37Net
      cash provided by  financing activities
                
                
                111,745
                
                
                
                175,607Effect
      of exchange rates on cash and cash equivalents
                
                
                (983
                )
                
                
                77Changes
      in cash and cash equivalents-Net
      (decrease) increase in cash and cash equivalents
                
                
                2,705
                
                
                
                (1,945
                )Cash
      and cash equivalents at beginning of year
                
                
                6,144
                
                
                
                7,463Cash
      and cash equivalents at end of quarter
                
                $
                8,849
                
                
                $
                5,518Supplemental
      disclosure of cash flow information:Interest
      paid
                
                $
                2,699
                
                
                $
                2,359Income
      tax payments
                
                $
                2,055
                
                
                $
                245Non-cash
      financing activities:Stock
      issuance related to the acquisition of TurboChef
                
                $
                44,048
                
                
                $
                —





See
accompanying notes


3





THE MIDDLEBY CORPORATION AND
SUBSIDIARIES





NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS





April 4,
2009


(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 2008 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 April 4,
2009 and January 3, 2009, and the results of operations for the three months
ended April 4, 2009 and March 29, 2008 and cash flows for the three months ended
April 4, 2009 and March 29, 2008.





B)
            Non-
      Cash Share-Based Compensation





The
company estimates the fair value of market-based stock awards and stock options
at the time of grant and recognizes compensation cost over the vesting period of
the awards and options.  Non-cash share-based compensation expense was
$2.7 million and $2.4 million for the first quarter of 2009 and 2008,
respectively.





C)
            Income
      Tax Contingencies





On
December 31, 2006, the company adopted the provisions of FASB Interpretation No.
48, “Accounting for Uncertainty in Income Taxes” (“FIN48”). 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.


4


As of
January 3, 2009, the total amount of liability for unrecognized tax benefits was
approximately $10.4 million (of which the entire amount would impact the
effective tax rate if recognized) plus approximately $1.4 million of accrued
interest and $1.8 million of penalties. As of April 4, 2009, there were no
significant changes in the total amount of liability for unrecognized tax
benefit. It is reasonably possible that the amounts of unrecognized tax benefits
associated with state, federal and foreign tax positions may decrease over the
next twelve months due to expiration of a statute or completion of an audit.
While a reasonable range of the amount cannot be determined, the company
believes such decrease would not be material.





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





United
      States – federal
                
                2007
      - 2008United
      States – states
                
                2002
      - 2008China
                
                2002
      - 2008Denmark
                
                2006
      - 2008Mexico
                
                2005
      - 2008Philippines
                
                2006
      - 2008South
      Korea
                
                2005
      - 2008Spain
                
                2007
      - 2008Taiwan
                
                2007
      - 2008United
      Kingdom
                
                2007
      - 2008





D)
            Fair
      Value Measures





In
September 2006, the FASB issued Statement of Financial Accounting Standards
(“SFAS”) No. 157 “Fair Value Measurements”.  This statement defines
fair value, establishes a framework for measuring fair value in generally
accepted accounting principles and expands disclosure about fair value
measurements.  This statement is effective for interim reporting
periods in fiscal years beginning after November 15, 2007.  The
company adopted SFAS No. 157 on December 30, 2007 (first day of fiscal year
2008).





FASB
Staff Position No. FAS 157-2, “Effective Date of FASB Statement
No. 157” delayed the effective date of the application of SFAS No. 157
to fiscal years beginning after November 15, 2008 for all nonfinancial
assets and nonfinancial liabilities that are recognized or disclosed at fair
value in the financial statements on a non-recurring basis.  The adoption
of FSP No. 157-2 did not have a material impact on the company’s financial
position, results of operations or cashflows.


5





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





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


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


Level 3 –
Unobservable inputs based on our own assumptions.





The
company’s financial assets that are measured at fair value are categorized using
the fair value hierarchy at April 4, 2009 are as follows (in
thousands):





Fair Value
                        Level 1
                      
                      
                      Fair Value
                        Level 2
                      
                      
                      Fair Value
                        Level3
                      
                      
                      TotalFinancial
      Assets:None
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —Financial
      Liabilities:Interest
      rate swaps
                      
                      
                      —
                      
                      
                      $
                      5,451
                      
                      
                      
                      —
                      
                      
                      $
                      5,451





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. As the company did not elect the fair value option, the
adoption of SFAS No. 159 did not have a material impact on the company’s
financial position, results of operations and cash flows for the three months
ended April 4, 2009.





2)
              Acquisitions
      and Purchase Accounting





The
company operates in a highly fragmented industry and has completed numerous
acquisitions over the past several years as a component of its growth
strategy.  The company has acquired industry leading brands and
technologies to position itself as  a leader in the commercial
foodservice equipment and food processing equipment industries.





The
company has accounted for all business combinations 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 results of operations are reflected in
the consolidated financial statements of the company from the date of
acquisition.


6




Star





On
December 31, 2007, the company acquired the stock of New Star International
Holdings, Inc. and subsidiaries (“Star”), a leading manufacturer of commercial
cooking equipment for an aggregate purchase price of $188.4 million in cash plus
transaction costs.





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





Dec. 31, 2007
                  
                  
                  Adjustments
                  
                  
                  Jan 3, 2009Cash
                  
                  $
                  376
                  
                  
                  $
                  —
                  
                  
                  $
                  376Current
      assets
                  
                  
                  27,783
                  
                  
                  
                  1,176
                  
                  
                  
                  28,959Property,
      plant and equipment
                  
                  
                  8,225
                  
                  
                  
                  —
                  
                  
                  
                  8,225Goodwill
                  
                  
                  101,365
                  
                  
                  
                  17,407
                  
                  
                  
                  118,772Other
      intangibles
                  
                  
                  75,150
                  
                  
                  
                  —
                  
                  
                  
                  75,150Other
      assets
                  
                  
                  71
                  
                  
                  
                  —
                  
                  
                  
                  71Current
      liabilities
                  
                  
                  (10,205
                  )
                  
                  
                  (1,836
                  )
                  
                  
                  (12,041
                  )Deferred
      tax liabilities
                  
                  
                  (8,837
                  )
                  
                  
                  (17,026
                  )
                  
                  
                  (25,863
                  )Other
      non-current liabilities
                  
                  
                  (4.295
                  )
                  
                  
                  498
                  
                  
                  
                  (3,797
                  )Total
      cash paid
                  
                  $
                  189,633
                  
                  
                  $
                  219
                  
                  
                  $
                  189,852





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





Pro forma Financial
Information





The
following unaudited pro forma results of operations for the year ended December
29, 2007, assumes the Star acquisition was completed on December 31, 2006. 
The pro forma results include adjustments to reflect additional interest expense
to fund the acquisition, amortization of intangibles associated with the
acquisition, and the effects of adjustments made to the carrying value of
certain assets.





December 29, 2007Net
      sales
                  
                  $
                  592,513Net
      earnings
                  
                  $
                  51,769Net
      earnings per share:Basic
                  
                  $
                  3.30Diluted
                  
                  $
                  3.06





The pro
forma financial information presented above is not necessarily indicative of
either the results of operations that would have occurred had the acquisition of
Star, been effective on December 31, 2006 or of future operations of the
company.  Also, the pro forma financial information does not reflect the
costs which the company incurred to integrate Star.


7





Giga





On April
22, 2008, the company acquired the stock of Giga Grandi Cucine S.r.l. (“Giga”),
a leading European manufacturer of ranges, ovens and steam cooking equipment for
a purchase price of $9.7 million in cash plus transaction costs.  The
company also assumed $5.1 million of debt included as part of the net assets of
Giga.  An additional deferred payment of $3.1 million is also due the
seller ratably over a three year period. The purchase price is subject to
adjustment based upon a working capital provision within the purchase
agreement.





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





Apr. 22, 2008
                  
                  
                  Adjustments
                  
                  
                  Apr. 4, 2009Cash
                  
                  $
                  222
                  
                  
                  $
                  —
                  
                  
                  $
                  222Current
      assets
                  
                  
                  14,645
                  
                  
                  
                  (2,159
                  )
                  
                  
                  12,486Property,
      plant and equipment
                  
                  
                  628
                  
                  
                  
                  —
                  
                  
                  
                  628Goodwill
                  
                  
                  10,135
                  
                  
                  
                  269
                  
                  
                  
                  10,404Other
      intangibles
                  
                  
                  3,330
                  
                  
                  
                  1,912
                  
                  
                  
                  5,242Other
      assets
                  
                  
                  473
                  
                  
                  
                  —
                  
                  
                  
                  473Current
      maturities of long-term debt
                  
                  
                  (5,105
                  )
                  
                  
                  —
                  
                  
                  
                  (5,105
                  )Current
      liabilities
                  
                  
                  (8,757
                  )
                  
                  
                  (12
                  )
                  
                  
                  (8,769
                  )Other
      non-current liabilities
                  
                  
                  (5,431
                  )
                  
                  
                  —
                  
                  
                  
                  (5,431
                  )Total
      cash paid
                  
                  $
                  10,140
                  
                  
                  $
                  10
                  
                  
                  $
                  10,150





The
goodwill and $3.7 million of other intangibles associated with the trade name
are subject to the non-amortization provisions of SFAS No. 142.  Other
intangibles also includes $0.2 million allocated to backlog and $1.3 million
allocated to customer relationships, which are to be amortized over periods of 3
months and 4 to 10 years, respectively.  Goodwill and other
intangibles of Giga are allocated to the Commercial Foodservice Equipment Group
for segment reporting purposes. These assets are not expected to be deductible
for tax purposes.





Frifri





On April
23, 2008, the company acquired the assets of FriFri aro SA (“FriFri”), a leading
European supplier of frying systems for an aggregate purchase price of $3.4
million plus transaction costs.  The purchase price is subject to
adjustment based upon a working capital provision within the purchase
agreement.





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





Apr. 23, 2008
                  
                  
                  Adjustments
                  
                  
                  Apr 4, 2009Cash
                  
                  $
                  469
                  
                  
                  $
                  194
                  
                  
                  $
                  663Current
      assets
                  
                  
                  4,263
                  
                  
                  
                  903
                  
                  
                  
                  5,166Property,
      plant and equipment
                  
                  
                  460
                  
                  
                  
                  (8
                  )
                  
                  
                  452Goodwill
                  
                  
                  1,155
                  
                  
                  
                  2,285
                  
                  
                  
                  3,440Current
      liabilities
                  
                  
                  (2,828
                  )
                  
                  
                  (3,365
                  )
                  
                  
                  (6,193
                  )Total
      cash paid
                  
                  $
                  3,519
                  
                  
                  $
                  9
                  
                  
                  $
                  3,528


8





The
goodwill is subject to the non-amortization provisions of SFAS No.
142.  Goodwill of Frifri is allocated to the Commercial Foodservice
Equipment Group for segment reporting purposes. These assets are not expected to
be deductible for tax purposes.





TurboChef





On
January 5 , 2009, the company acquired the stock of TurboChef Technologies, Inc.
(“TurboChef”), a leading manufacturer of speed-cook ovens for an aggregate
purchase price of $160.3 million including $116.1 million in cash and 1,539,668
shares of Middleby common stock valued at $44.0 million.





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





Jan
      5, 2009Cash
                        
                        $
                        10,146Current
      assets
                        
                        
                        35,428Property,
      plant and equipment
                        
                        
                        4,155Goodwill
                        
                        
                        66,821Other
      intangibles
                        
                        
                        72,516Deferred
      tax asset
                        
                        
                        18,588Current
      liabilities
                        
                        
                        (36,615
                        )Other
      non-current liabilities
                        
                        
                        (768
                        )Total
      cash paid
                        
                        $
                        170,271





The
goodwill and $40.0 million of other intangibles associated with the trade name
are subject to the non-amortization provisions of SFAS No. 142.  Other
intangibles also includes $ 0.5 million allocated to backlog, $7.0 million
allocated to developed technology and $25.0 million allocated to customer
relationships which are to be amortized over periods of 3 month, 5 years and 7
years, respectively.  Goodwill and other intangibles of TurboChef are
allocated to the Commercial Foodservice Equipment Group for segment reporting
purposes. These assets are not expected to be deductible for tax
purposes.





Results
of Operations





The
following unaudited results of operations for the quarter ended April 4, 2009,
reflect the operations of TurboChef on a stand-alone basis (in
thousands):





April 4, 2009Net
      sales
                  
                  $
                  22,856Income
      from operations
                  
                  $
                  1,037




9





Pro
forma Financial Information





The
following unaudited pro forma results of operations for the quarter ended March
29,2008 assumes the TurboChef acquisition was completed on December 30,
2007.  The pro forma results include adjustments to reflect additional
interest expense to fund the acquisition, amortization of intangibles associated
with the acquisition, and the effects of adjustments made to the carrying value
of certain assets.





March 29, 2008(in
      thousands, except
                    per
      share data)Net
      sales
                  
                  $
                  185,277Net
      earnings
                  
                  $
                  6,092Net
      earnings per share:Basic
                  
                  $
                  0.35Diluted
                  
                  $
                  0.32





The pro
forma financial information presented above is not necessarily indicative of
either the results of operations that would have occurred had the acquisition of
TurboChef, been effective on December 30, 2007 or of future operations of the
company.  Also, the pro forma financial information does not reflect the
costs which the company has incurred or may incur to integrate
TurboChef.





3)
            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.


10





4)
            Recently
      Issued Accounting Standards





In
December 2007, the FASB issued SFAS No. 141R, “Business
Combinations”.  This statement provides companies with principles and
requirements on how an acquirer recognizes and measures in its financial
statements the identifiable assets acquired, liabilities assumed, and any
noncontrolling interest in the acquiree as well as the recognition and
measurement of goodwill acquired in a business combination. This statement also
requires certain disclosures to enable users of the financial statements to
evaluate the nature and financial effects of the business combination.
Acquisition costs associated with the business combination will generally be
expensed as incurred. This statement is effective for business combinations
occurring in fiscal years beginning after December 15,
2008.  Early adoption of FASB Statement No. 141R is not
permitted.  The company adopted this statement on January 5, 2009,
including the acquisition of TurboChef.  Accordingly, the company has
applied the principles of SFAS No. 141R in valuing this acquisition.
 Middleby shares of common stock which were issued in conjunction with this
transaction, were valued using the share price at the time of closing to
determine the value of the purchase price.  Additionally, the company
incurred approximately $4.6 million in transaction related expenses which were
recorded as a deferred acquisition cost reported as an asset on the balance
sheet on January 3, 2009.  In accordance with SFAS No. 141R, the company
has applied a retrospective application and appropriately reflected the expense
incurred in 2008 as a reduction in retained earnings in accordance with
FASB Statement No. 154, “Accounting Changes and Error Corrections,” on reporting
a change in accounting principle.





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





In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities—an amendment of FASB Statement No. 133.”  This
statement amends SFAS No. 133 to require enhanced disclosures about an entity’s
derivative and hedging activities.  This Statement is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged.  The company has
complied with the disclosure requirements of SFAS No. 161.


11





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.”  This statement identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States.  This statement directs the hierarchy to the
entity, rather than the independent auditors, as the entity is responsible for
selecting accounting principles for financial statements that are presented in
conformity with generally accepted accounting principles.  This
statement is effective 60 days following the SEC’s approval of the Public
Company Accounting Oversight Board amendments to remove the hierarchy of
generally accepted accounting principles from the auditing
standards.  The company does not anticipate that the adoption of SFAS
No. 162 will have a material impact on its financial statements.





In
December 2008, the FASB issued FASB Staff Position, or FSP,
No. 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan
Assets.” This FSP amends SFAS 132(R), “Employer’s Disclosures about Pensions and
Other Postretirement Benefits,” to require additional disclosures about assets
held in an employer’s defined benefit pension or other postretirement plan. This
FSP replaces the requirement to disclose the percentage of the fair value of
total plan assets for each major category of plan assets, such as equity
securities, debt securities, real estate and all other assets, with the fair
value of each major asset category as of each annual reporting date for which a
financial statement is presented. It also amends SFAS No. 132(R) to require
disclosure of the level within the fair value hierarchy in which each major
category of plan assets falls, using the guidance in SFAS No. 157, “Fair
Value Measurements.” This FSP is applicable to employers that are subject to the
disclosure requirements of SFAS No. 132(R) and is generally effective for
fiscal years ending after December 15, 2009. The company will comply with
the disclosure provisions of this FSP after its effective date.





5)
            Other
      Comprehensive Income





The
company reports changes in equity during a period, except those resulting from
investments by owners and distributions to owners, in accordance with SFAS No.
130, "Reporting Comprehensive Income."





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





Three Months EndedApr 4, 2009
                    
                    
                    Mar 29, 2008Net
      earnings
                    
                    $
                    14,067
                    
                    
                    $
                    13,181Currency
      translation adjustment
                    
                    
                    (744
                    )
                    
                    
                    845Unrealized
      gain/(loss) on interest rate swaps, net of tax
                    
                    
                    223
                    
                    
                    
                    (544
                    )Comprehensive
      income
                    
                    $
                    13,546
                    
                    
                    $
                    13,482





Accumulated
other comprehensive income is comprised of unrecognized pension benefit costs of
$(2.5) million net of taxes of $1.1 million as of April 4, 2009 and January 3,
2009, foreign currency translation adjustments of $3.3 million as of April 4,
2009 and $2.5 million as of January 3, 2009 and an unrealized loss on interest
rate swaps of $3.0 million, net of taxes of $2.0 million and $3.2 million, net
of taxes of $2.1 million, as of April 4, 2009 and January 3, 2009
respectively.





12





6)
            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 $17.2
million at April 4, 2009 and $22.5 million at January 3, 2009 and represented
approximately 18% and 25% of the total inventory in each respective
period.  Costs for all other inventory have been determined using the
first-in, first-out ("FIFO") method.  The company estimates reserves
for inventory obsolescence and shrinkage based on its judgment of future
realization.  Inventories at April 4, 2009 and January 3, 2009 are as
follows:




Apr 4, 2009
                  
                  
                  Jan 3, 2009(in thousands)Raw
      materials and parts
                  
                  $
                  37,747
                  
                  
                  $
                  36,375Work-in-process
                  
                  
                  16,002
                  
                  
                  
                  21,075Finished
      goods
                  
                  
                  43,414
                  
                  
                  
                  34,66897,163
                  
                  
                  
                  92,118LIFO
      adjustment
                  
                  
                  (567
                  )
                  
                  
                  (567
                  )$
                  96,596
                  
                  
                  $
                  91,551





7)
            Accrued
      Expenses





Accrued
expenses consist of the following:





Apr 4, 2009
                  
                  
                  Jan 3, 2009(in thousands)Accrued
      payroll and related expenses
                  
                  $
                  22,056
                  
                  
                  $
                  23,294Accrued
      warranty
                  
                  
                  16,422
                  
                  
                  
                  12,595Advance
      customer deposits
                  
                  
                  12,552
                  
                  
                  
                  4,449Accrued
      customer rebates
                  
                  
                  7,453
                  
                  
                  
                  13,960Accrued
      product liability and workers comp
                  
                  
                  8,591
                  
                  
                  
                  8,577Accrued
      professional services
                  
                  
                  5,861
                  
                  
                  
                  5,283Other
      accrued expenses
                  
                  
                  47,050
                  
                  
                  
                  34,421$
                  119,985
                  
                  
                  $
                  102,579




13





8)
            Warranty
      Costs





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





A
rollforward of the warranty reserve is as follows:





Three MonthsEndedApril 4, 2009(in thousands)Beginning
      balance
                  
                  $
                  12,595Warranty
      reserve related to acquisitions
                  
                  
                  1,739Warranty
      expense
                  
                  
                  8,080Warranty
      claims
                  
                  
                  (5,992
                  )Ending
      balance
                  
                  $
                  16,422





9)
            Financing
      Arrangements





Apr 4, 2009
                    
                    
                    Jan 3, 2009(in thousands)Senior
      secured revolving credit line
                    
                    $
                    338,600
                    
                    
                    $
                    226,350Foreign
      loan
                    
                    
                    7,489
                    
                    
                    
                    8,350Total
      debt
                    
                    $
                    346,089
                    
                    
                    $
                    234,700Less:  Current
      maturities of long-term debt
                    
                    
                    5,628
                    
                    
                    
                    6,377Long-term
      debt
                    
                    $
                    340,461
                    
                    
                    $
                    228,323





During
the fourth quarter of 2007 the company entered into a new senior secured credit
facility that matures in December 2012.  This agreement was later
amended in August 2008 to provide for the acquisition of TurboChef. Terms of the
senior credit agreement provide for $497.5 million of availability under a
revolving credit line.  As of April 4, 2009, the company had $338.6
million of borrowings outstanding under this facility.  The company
also has $5.2 million in outstanding letters of credit, which reduces the
borrowing availability under the revolving credit line.  Remaining
borrowing availability under this facility, which is also reduced by the
company’s foreign borrowings, was $146.2 million at April 4,
2009.


14


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.  At April 4, 2009 the average interest rate on
the senior debt amounted to 1.55%. 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 April 4, 2009.





In August
2006, the company completed its acquisition of Houno A/S in Denmark. This
acquisition was funded in part with locally established debt facilities with
borrowings in Danish Krone.  On April 4, 2009 these facilities amounted to
$3.8 million in US dollars, including $1.8 million outstanding under a revolving
credit facility and $2.0 million of a term loan.  The interest rate on the
revolving credit facility is assessed at 1.25% above Euro LIBOR, which amounted
to 6.5% on April 4, 2009. The term loan matures in 2013 and the interest rate is
assessed at 6.14%.





In April
2008, the company completed its acquisition of Giga Grandi Cucine S.r.l in
Italy. This acquisition was funded in part with locally established debt
facilities with borrowings  denominated in Euro.  On April 4,
2009 these facilities amounted to $3.6 million in US dollars.  The
borrowings under these facilities are collateralized by the receivables of the
company.  The interest rate on the credit facilities is tied to six-month
Euro LIBOR. The facilities mature in April of 2015.









The
company believes that its current capital resources, including cash and cash
equivalents, cash generated from operations, funds available from its revolving
credit facility and access to the credit and capital markets will be sufficient
to finance its operations, debt service obligations, capital expenditures,
product development and integration expenditures for the foreseeable
future.





The
company has historically entered into interest rate swap agreements to
effectively fix the interest rate on its outstanding debt.  The
agreements swap one-month LIBOR for fixed rates. As of April 4, 2009 the company
had the following interest rate swaps in effect:





FixedNotional
                            
                            Interest
                            
                            Effective
                            
                            MaturityAmount
                            
                            Rate
                            
                            Date
                            
                            Date$
                            25,000,000
                            
                            
                            3.67
                            %
                            9/26/2008
                            
                            9/23/2011$
                            25,000,000
                            
                            
                            3.35
                            %
                            1/14/2008
                            
                            1/14/2010$
                            20,000,000
                            
                            
                            2.80
                            %
                            9/08/2008
                            
                            9/08/2009$
                            20,000,000
                            
                            
                            3.35
                            %
                            6/10/2008
                            
                            6/10/2010$
                            15,000,000
                            
                            
                            3.13
                            %
                            9/08/2008
                            
                            9/07/2010$
                            10,000,000
                            
                            
                            2.78
                            %
                            2/06/2008
                            
                            2/08/2010$
                            10,000,000
                            
                            
                            3.03
                            %
                            2/06/2008
                            
                            2/07/2011$
                            10,000,000
                            
                            
                            3.46
                            %
                            9/08/2008
                            
                            9/06/2011$
                            10,000,000
                            
                            
                            5.03
                            %
                            3/03/2006
                            
                            12/21/2009$
                            10,000,000
                            
                            
                            2.92
                            %
                            2/01/2008
                            
                            2/01/2010$
                            10,000,000
                            
                            
                            3.59
                            %
                            6/10/2008
                            
                            6/10/2011




15





The terms
of the senior secured credit facility limit the paying of dividends, capital
expenditures and leases, and require, among other things, ratios of indebtedness
of 3.5 debt to earnings before interest, taxes, depreciation and amortization
(“EBITDA”) and fixed charge coverage of 1.25 EBITDA to fixed charges. The credit
agreement also provides that if a material adverse change in the company’s
business operations or conditions occurs, the lender could declare an event of
default. Under terms of the agreement a material adverse effect is defined as
(a) a material adverse change in, or a material adverse effect upon, the
operations, business properties, condition (financial and otherwise) or
prospects of the company and its subsidiaries taken as a whole; (b) a material
impairment of the ability of the company to perform under the loan agreements
and to avoid any event of default; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the company of any
loan document. A material adverse effect is determined on a subjective basis by
the company's creditors.  The credit facility is secured by the
capital stock of the company’s domestic subsidiaries, 65% of the capital stock
of the company’s foreign subsidiaries and substantially all other assets of the
company.  At April 4, 2009, the company was in compliance with all
covenants pursuant to its borrowing agreements.





10)
            Financial
      Instruments





SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities" 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.





On
January 5, 2009, the company adopted SFAS No. 161 “Disclosures about Derivative
Instruments and Hedging Activities – an amendment of FASB Statement No.
133”.  This statement expands the disclosure of financial
instruments.





Foreign Exchange: The company
has entered into derivative instruments, principally forward contracts to reduce
exposures pertaining to fluctuations in foreign exchange rates.  As of
April 4, 2009, the company had no forward contracts
outstanding.


16





Interest Rate:  The
company has entered into interest rate swaps to fix the interest rate applicable
to certain of its variable-rate debt. The agreements swap one-month LIBOR
for  fixed rates. The company has designated these swaps as cash flow
hedges and all changes in fair value of the swaps are recognized in accumulated
other comprehensive income.  As of April 4, 2009, the fair value of
these instruments was a loss of $5.4 million.  The change in fair
value of these swap agreements in the first three months of 2009 was a gain of
$0.2 million, net of taxes.





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





Three months endedLocation
                        
                        Apr. 4, 2009
                        
                        
                        Mar. 29, 2008(amounts in thousands)Fair
      value
                        
                        Other
      liabilities
                        
                        $
                        (5,406
                        )
                        
                        $
                        (1,353
                        )Amount
      of gain/(loss) recognized in other comprehensive income
                        
                        Other
      comprehensive income
                        
                        $
                        275
                        
                        
                        $
                        (544
                        )Gain/(loss)
      reclassified from accumulated other comprehensive income (effective
      portion)
                        
                        Other
      comprehensive income
                        
                        $
                        -
                        
                        
                        $
                        -Gain/(loss)
      recognized in income (ineffective portion)
                        
                        Other
      expense
                        
                        $
                        48
                        
                        
                        $
                        204




Interest
rate swaps are subject to default risk to the extent the counterparty were
unable to satisfy their settlement obligations under the interest rate swap
agreements. The company reviews the credit profile of the financial institutions
and assesses its creditworthiness prior to entering into the interest rate swap
agreement. The interest rate swap agreements typically contain provisions that
allow the counterparty to require early settlement in the event that the company
becomes insolvent or is unable to maintain, compliance with its covenants under
its existing debt agreement.


11)
            Segment
      Information





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





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


17





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





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





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





Net Sales
Summary


(dollars
in thousands)





Three Months EndedApr 4, 2009
                      
                      
                      Mar 29, 2008Sales
                      
                      
                      Percent
                      
                      
                      Sales
                      
                      
                      PercentBusiness Divisions:Commercial
      Foodservice
                      
                      $
                      163,529
                      
                      
                      
                      90.1
                      
                      
                      $
                      134,016
                      
                      
                      
                      83.3Food
      Processing
                      
                      
                      12,865
                      
                      
                      
                      7.1
                      
                      
                      
                      19,888
                      
                      
                      
                      12.4International
      Distribution(1)
                      
                      
                      11,997
                      
                      
                      
                      6.6
                      
                      
                      
                      15,793
                      
                      
                      
                      9.8Intercompany
      sales (2)
                      
                      
                      (6,845
                      )
                      
                      
                      (3.8
                      )
                      
                      
                      (8,814
                      )
                      
                      
                      (5.5
                      )Total
                      
                      $
                      181,546
                      
                      
                      
                      100.0
                      %
                      
                      $
                      160,883
                      
                      
                      
                      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 InternationalDistribution
      Division




18





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





Commercial
                    Foodservice
                  
                  
                  Food
                    Processing
                  
                  
                  International
                    Distribution
                  
                  
                  Corporate
                    and Other(2)
                  
                  
                  Eliminations(3)
                  
                  
                  TotalThree
      months ended April 4, 2009Net
      sales
                  
                  $
                  163,529
                  
                  
                  $
                  12,865
                  
                  
                  $
                  11,997
                  
                  
                  $
                  —
                  
                  
                  $
                  (6,845
                  )
                  
                  $
                  181,546Operating
      income
                  
                  
                  35,119
                  
                  
                  
                  1,673
                  
                  
                  
                  694
                  
                  
                  
                  (9,650
                  )
                  
                  
                  255
                  
                  
                  
                  28,091Depreciation
      and amortization expense
                  
                  
                  4,663
                  
                  
                  
                  348
                  
                  
                  
                  37
                  
                  
                  
                  157
                  
                  
                  
                  —
                  
                  
                  
                  5,205Net
      capital expenditures
                  
                  
                  1,549
                  
                  
                  
                  24
                  
                  
                  
                  59
                  
                  
                  
                  238
                  
                  
                  
                  —
                  
                  
                  
                  1,870Total
      assets
                  
                  
                  710,947
                  
                  
                  
                  66,724
                  
                  
                  
                  23,727
                  
                  
                  
                  36,717
                  
                  
                  
                  (6,135
                  )
                  
                  
                  831,980Long-lived
      assets
                  
                  
                  515,412
                  
                  
                  
                  43,135
                  
                  
                  
                  557
                  
                  
                  
                  22,269
                  
                  
                  
                  —
                  
                  
                  
                  581,373Three
      months ended March 29, 2008Net
      sales
                  
                  $
                  134,016
                  
                  
                  $
                  19,888
                  
                  
                  $
                  15,793
                  
                  
                  $
                  —
                  
                  
                  $
                  (8,814
                  )
                  
                  $
                  160,883Operating
      income
                  
                  
                  30,547
                  
                  
                  
                  2,789
                  
                  
                  
                  1,074
                  
                  
                  
                  (8,442
                  )
                  
                  
                  48
                  
                  
                  
                  26,016Depreciation
      and amortization expense
                  
                  
                  2,888
                  
                  
                  
                  416
                  
                  
                  
                  52
                  
                  
                  
                  177
                  
                  
                  
                  —
                  
                  
                  
                  3,533Net
      capital expenditures
                  
                  
                  1,899
                  
                  
                  
                  51
                  
                  
                  
                  152
                  
                  
                  
                  22
                  
                  
                  
                  —
                  
                  
                  
                  2,124Total
      assets
                  
                  
                  494,937
                  
                  
                  
                  73,730
                  
                  
                  
                  29,887
                  
                  
                  
                  32,286
                  
                  
                  
                  (10,480
                  )
                  
                  
                  620,360Long-lived
      assets
                  
                  
                  354,671
                  
                  
                  
                  43,294
                  
                  
                  
                  713
                  
                  
                  
                  11,911
                  
                  
                  
                  —
                  
                  
                  
                  410,589





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





Long-lived
assets by major geographic region are as follows (in
thousands):




Three
      Months EndedApr 4, 2009
                  
                  
                  Mar. 29, 2008United
      States and Canada
                  
                  $
                  555,190
                  
                  
                  $
                  406,057Asia
                  
                  
                  278
                  
                  
                  
                  1,907Europe
      and Middle East
                  
                  
                  25,692
                  
                  
                  
                  2,625Latin
      America
                  
                  
                  213
                  
                  
                  
                  —Total
      international
                  
                  
                  26,183
                  
                  
                  
                  4,532$
                  581,373
                  
                  
                  $
                  410,589





19




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 EndedApr 4,, 2009
                  
                  
                  Mar. 29, 2008United
      States and Canada
                  
                  $
                  158,532
                  
                  
                  $
                  132,953Asia
                  
                  
                  5,307
                  
                  
                  
                  7,152Europe
      and Middle East
                  
                  
                  13,576
                  
                  
                  
                  16,371Latin
      America
                  
                  
                  4,131
                  
                  
                  
                  4,407Net
      sales
                  
                  $
                  181,546
                  
                  
                  $
                  160,883





12)
            Employee
      Retirement Plans





(a)
            Pension
      Plans





The
company maintains a non-contributory defined benefit plan for its employees at
Smithville, Tennessee facility, which was acquired as part of the Star
acquisition. Benefits are determined based upon retirement age and years of
service with the company.  This defined benefit plan was frozen on
April 1, 2008 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 1, 2008 upon reaching retirement
age.





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
July 1, 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 participating on the Board of Directors prior to 2004.  This
plan is not available to any new 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.


20





(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.


13)
              Restructuring




During
the first quarter the company made the decision and took action to close one of
its manufacturing facilities and transfer production to another of the Company's
manufacturing facility. The company anticipates this initiative will be fully
complete by the 2009 third quarter. The company recorded expense in the
first quarter for severance and employee benefits associated with this
initiative. These costs are summarized as follows (in
thousands):




Employee-related
      severanceand
      benefit costs incurred
                                
                                $
                                2,
      279Payments
                                
                                
                                (10
                                )Balance
      April 4, 2009
                                
                                $
                                2,269





14)
            Subsequent
      Events





On April
26, 2009, the company completed the acquisition of substantially all of the
assets of CookTek LLC (“CookTek”) for $9.0 million.  Further payments
are due to the seller under an earnout arrangement to the extent certain
financial targets are achieved.  CookTek is a leader in the
manufacture of induction cooking and warming systems for the commercial
foodservice industry.





On April
30, 2009, the company completed the acquisition of substantially all of the
assets of Anetsbergers, Brothers, Inc. (“Anets”) for $3.5 million plus $0.5
million in deferred payments if certain performance criteria are
met.  Anets is a leading manufacturer of griddles, fryers and dough
rollers for the commercial foodservice industry.


21


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





Informational
Notes





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 2008 Annual Report on Form 10-K and
Item 1A of this Form 10-Q.




The
economic outlook for 2009 is extremely uncertain at this time, with substantial
turmoil in financial markets and unprecedented government intervention around
the world. As a global business, the company’s operating results are impacted by
the health of the North American, European, Asian and Latin American economies.
While the response by governments and central banks around the world may restore
global liquidity, the depth and duration of economic decline and the timing and
strength of the recovery are very uncertain.


22


Net Sales
Summary


(dollars
in thousands)





Three Months EndedApr. 4, 2009
                    
                    
                    Mar. 29, 2008Sales
                    
                    
                    Percent
                    
                    
                    Sales
                    
                    
                    PercentBusiness Divisions:Commercial
      Foodservice
                    
                    $
                    163,529
                    
                    
                    
                    90.1
                    
                    
                    $
                    134,016
                    
                    
                    
                    83.3Food
      Processing
                    
                    
                    12,865
                    
                    
                    
                    7.1
                    
                    
                    
                    19,888
                    
                    
                    
                    12.4International
      Distribution(1)
                    
                    
                    11,997
                    
                    
                    
                    6.6
                    
                    
                    
                    15,793
                    
                    
                    
                    9.8Intercompany
      sales (2)
                    
                    
                    (6,845
                    )
                    
                    
                    (3.8
                    )
                    
                    
                    (8,814
                    )
                    
                    
                    (5.5
                    )Total
                    
                    $
                    181,546
                    
                    
                    
                    100.0
                    %
                    
                    $
                    160,883
                    
                    
                    
                    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 theInternational 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 EndedApr 4, 2009
                  
                  
                  Mar 29, 2008Net
      sales
                  
                  
                  100.0
                  %
                  
                  
                  100.0
                  %Cost
      of sales
                  
                  
                  62.1
                  
                  
                  
                  63.4Gross
      profit
                  
                  
                  37.9
                  
                  
                  
                  36.6Selling,
      general and administrative expenses
                  
                  
                  22.4
                  
                  
                  
                  20.4Income
      from operations
                  
                  
                  15.5
                  
                  
                  
                  16.2Net
      interest expense and deferred financing amortization
                  
                  
                  1.7
                  
                  
                  
                  2.3Other
      (income) expense, net
                  
                  
                  0.2
                  
                  
                  
                  0.2Earnings
      before income taxes
                  
                  
                  13.6
                  
                  
                  
                  13.7Provision
      for income taxes
                  
                  
                  5.8
                  
                  
                  
                  5.5Net
      earnings
                  
                  
                  7.8
                  %
                  
                  
                  8.2
                  %





23


Three Months Ended April 4,
2009 Compared to Three Months Ended March 29,
2008





NET
SALES.Net sales for the first
quarter of fiscal 2009 were $181.5 million as compared to $160.9 million in the
first quarter of 2008.





Net sales
at the Commercial Foodservice Equipment Group amounted to $163.5 million in the
first quarter of 2009 as compared to $134.0 million in the prior year
quarter.





Net sales
from the acquisition of TurboChef, which was acquired on January 5, 2009
accounted for an increase of $22.5 million during the first quarter of
2009.  Excluding the impact of acquisitions, net sales of commercial
foodservice equipment increased $0.4 million.





Net sales
for the Food Processing Equipment Group amounted to $12.9 million in the first
quarter of 2009 as compared to $19.9 million in the prior year
quarter.  Net sales of food processing equipment continued to be
impacted by the adverse economic conditions.





Net sales
at the International Distribution Division decreased by $3.8 million to $12.0
million or 24%, reflecting lower sales in Asia, Europe and Latin
America.  Sales were affected by adverse economic conditions
internationally and reduced store openings by the U.S. chains in the
international markets.


.


GROSS
PROFIT.Gross profit increased to
$68.8 million in the first quarter of 2009 from $58.9 million in the prior year
period, reflecting the impact of higher sales volumes.  The gross
margin rate was 37.9 % in the first quarter of 2009 as compared to 36.6% in the
prior year quarter.  The net increase in the gross margin rate
reflects:





·
            Improved
      margins at certain of the newly acquired operating companies which have
      improved due to acquisition integration
  initiatives.





·
            Higher
      margins associated with new product
sales.





·
            The
      adverse impact of lower sales
volumes.





SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES.Combined selling, general,
and administrative expenses increased from $32.9 million in the first quarter of
2008 to $40.7 million in the first quarter of 2009.  As a percentage
of net sales, operating expenses increased from 20.4% in the first quarter of
2008 to 22.4% in the first quarter of 2009. Selling expenses increased from
$16.2 million in the first quarter of 2008 to $16.3 million in the first quarter
of 2009.  Selling expenses reflect increased costs of $3.6 million
associated with the acquired operations of Frifri, Giga and TurboChef
partially offset by reduced costs of $2.4 million associated with commission
expense due to lower sales and lower rates. General and administrative expenses
increased from $16.6 million in the first quarter of 2008 to $24.4 million in
the first quarter of 2009.  General and administrative expenses
reflect $4.0 million of costs associated with the acquired operations of Frifri,
Giga and TurboChef and $2.3 million associated with the closure and
consolidation of a manufacturing facility.


24





NON-OPERATING
EXPENSES.Interest and deferred financing amortization costs
decreased to $3.1 million in the first quarter of 2009 as compared to $3.7
million in the first quarter of 2008, due to lower interest rates on increased
borrowings resulting from recent acquisitions.  Other expense was $0.3
million in the first quarter of 2009, which primarily consisted of foreign
exchange losses, as compared to other expense of $0.4 million in the prior year
first quarter.





INCOME
TAXES.A tax provision of $10.6
million, at an effective rate of 43%, was recorded during the first quarter of
2009, as compared to a $8.7 million provision at a 40% effective rate in the
prior year quarter.





Financial Condition and
Liquidity





During
the three months ended April 4, 2009, cash and cash equivalents increased by
$2.7 million to $8.8 million at April 4, 2009  from $6.1 million at
January 3, 2009.  Net borrowings increased from $234.7 million at
January 3, 2009 to $346.1 million at April 4, 2009.





OPERATING
ACTIVITIES.Net cash provided by
operating activities was $9.9 million for the three month period ended April 4,
2009 compared to $12.6 million for the three-month period ended March 29,
2008.





During
the three months ended April 4, 2009, working capital levels changed due to
normal business fluctuations, including the impact of increased seasonal working
capital needs.  The changes in working capital included a $8.7 million
increase in accounts receivable, a $5.6 million decrease in inventory, and a
$5.6 million increase in accounts payable.  Prepaid and other assets
decreased $0.5 million. Accrued expenses and other non-current liabilities also
decreased by $15.1 million.





INVESTING
ACTIVITIES.During the three months
ended April 4, 2009, net cash used in investing activities amounted to $117.9
million.  This includes cash utilized to complete the acquisition of
TurboChef of $116.1 million and $1.9 million of capital expenditures associated
with additions and upgrades of production equipment.





FINANCING
ACTIVITIES.Net cash flows provided by financing activities
were $111.7 million during the three months ended April 4, 2009.  The
net increase in debt includes $112.3 million in borrowings under the company’s
$497.5 million revolving credit facility utilized to fund the company’s
investing activities.





At April
4, 2009, 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.


25





Recently Issued Accounting
Standards





In
December 2007, the FAS issued SFAS No. 141R, “Business
Combinations”.  This statement provides companies with principles and
requirements on how an acquirer recognizes and measures in its financial
statements the identifiable assets acquired, liabilities assumed, and any
noncontrolling interest in the acquiree as well as the recognition and
measurement of goodwill acquired in a business combination. This statement also
requires certain disclosures to enable users of the financial statements to
evaluate the nature and financial effects of the business combination.
Acquisition costs associated with the business combination will generally be
expensed as incurred. This statement is effective for business combinations
occurring in fiscal years beginning after December 15,
2008.  Early adoption of FASB Statement No. 141R is not
permitted.  The company adopted this statement on January 5, 2009,
including the acquisition of TurboChef.  Accordingly, the company has
applied the principles of SFAS No. 141R in valuing this acquisition.
 Middleby shares of common stock which were issued in conjunction with this
transaction, were valued using the share price at the time of closing to
determine the value of the purchase price.  Additionally, the company
incurred approximately $4.6 million in transaction related expenses which were
recorded as a deferred acquisition cost reported as an asset on the balance
sheet on January 3, 2009.  In accordance with SFAS No. 141R, the company
has applied a retrospective application and appropriately reflected the expense
incurred in 2008 in accordance with FASB Statement No. 154, “Accounting Changes
and Error Corrections,” on reporting a change in accounting
principle.





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





In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities—an amendment of FASB Statement No. 133.”  This
statement amends SFAS No. 133 to require enhanced disclosures about an entity’s
derivative and hedging activities.  This Statement is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged.  The company has
complied with the disclosure requirements of SFAS No. 161.





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.”  This statement identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States.  This statement directs the hierarchy to the
entity, rather than the independent auditors, as the entity is responsible for
selecting accounting principles for financial statements that are presented in
conformity with generally accepted accounting principles.  This
statement is effective 60 days following the SEC’s approval of the Public
Company Accounting Oversight Board amendments to remove the hierarchy of
generally accepted accounting principles from the auditing
standards.  The company does not anticipate that the adoption of SFAS
No. 162 will have a material impact on its financial
statements.


26





In
December 2008, the FASB issued FASB Staff Position, or FSP,
No. 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan
Assets.” This FSP amends SFAS 132(R), “Employer’s Disclosures about Pensions and
Other Postretirement Benefits,” to require additional disclosures about assets
held in an employer’s defined benefit pension or other postretirement plan. This
FSP replaces the requirement to disclose the percentage of the fair value of
total plan assets for each major category of plan assets, such as equity
securities, debt securities, real estate and all other assets, with the fair
value of each major asset category as of each annual reporting date for which a
financial statement is presented. It also amends SFAS No. 132(R) to require
disclosure of the level within the fair value hierarchy in which each major
category of plan assets falls, using the guidance in SFAS No. 157, “Fair
Value Measurements.” This FSP is applicable to employers that are subject to the
disclosure requirements of SFAS No. 132(R) and is generally effective for
fiscal years ending after December 15, 2009. The company will comply with
the disclosure provisions of this FSP after its effective date.





Critical Accounting Policies
and Estimates





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





Revenue
Recognition:The
company recognizes revenue on the sale of its products when risk of loss has
passed to the customer, which occurs at the time of shipment, and collectibility
is reasonably assured.  The sale prices of the products sold are fixed
and determinable at the time of shipment.  Sales are reported net of
sales returns, sales incentives and cash discounts based on prior experience and
other quantitative and qualitative factors.





At the
Food Processing Equipment Group, the company enters into long-term sales
contracts for certain products. Revenue under these long-term sales contracts is
recognized using the percentage of completion method prescribed by Statement of
Position No. 81-1 due to the length of time to fully manufacture and assemble
the equipment. The company measures revenue recognized based on the ratio of
actual labor hours incurred in relation to the total estimated labor hours to be
incurred related to the contract. Because estimated labor hours to complete a
project are based upon forecasts using the best available information, the
actual hours may differ from original estimates. The percentage of completion
method of accounting for these contracts most accurately reflects the status of
these uncompleted contracts in the company's financial statements and most
accurately measures the matching of revenues with expenses. At the time a loss
on a contract becomes known, the amount of the estimated loss is recognized in
the consolidated financial statements.


27





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.


28





Income
taxes:The
company operates in numerous foreign and domestic taxing jurisdictions where it
is subject to various types of tax, including sales tax and income tax. 
The company's tax filings are subject to audits and adjustments. Because of the
nature of the company’s operations, the nature of the audit items can be
complex, and the objectives of the government auditors can result in a tax on
the same transaction or income in more than one state or country.  The
company initially recognizes the financial statement effects of a tax position
when it more likely than not, based on the technical merits, that the position
will be sustained upon examination.  For tax positions that meet the
more-likely-than-not recognition threshold, the company initially and
subsequently measures its tax positions as the largest amount of tax benefit
that is greater than 50 percent likely of being realized upon effective
settlement with the taxing authority.  As part of the company's
calculation of the provision for taxes, the company has recorded liabilities on
various tax positions that are currently under audit by the taxing
authorities.  The liabilities may change in the future upon effective
settlement of the tax positions.





Contractual
Obligations





The
company's contractual cash payment obligations as of April 4, 2009 are set forth
below (in thousands):





Amounts
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  TotalDue Sellers
                  
                  
                  
                  
                  
                  
                  
                  
                  Idle
                  
                  
                  ContractualFrom
                  
                  
                  Long-term
                  
                  
                  Operating
                  
                  
                  Facility
                  
                  
                  CashAcquisitions
                  
                  
                  Debt
                  
                  
                  Leases
                  
                  
                  Leases
                  
                  
                  ObligationsLess
      than 1 year
                  
                  $
                  1,497
                  
                  
                  $
                  5,628
                  
                  
                  $
                  3,844
                  
                  
                  $
                  384
                  
                  
                  $
                  11,3531-3
      years
                  
                  
                  1,597
                  
                  
                  
                  406
                  
                  
                  
                  5,178
                  
                  
                  
                  861
                  
                  
                  
                  8,0423-5
      years
                  
                  
                  —
                  
                  
                  
                  339,006
                  
                  
                  
                  1,323
                  
                  
                  
                  880
                  
                  
                  
                  341,209After
      5 years
                  
                  
                  —
                  
                  
                  
                  1,049
                  
                  
                  
                  —
                  
                  
                  
                  621
                  
                  
                  
                  1,670$
                  3,094
                  
                  
                  $
                  346,089
                  
                  
                  $
                  10,345
                  
                  
                  $
                  2,746
                  
                  
                  $
                  362,274





The
company has an obligation to make $3.1 million of purchase price payments to the
sellers of Giga that were deferred in conjunction with the
acquisition.





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 $5.2 million in outstanding letters of credit, which expire on April
4, 2010 to secure potential obligations under insurance programs.





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


29





The
projected benefit obligation of the company’s defined benefit plans exceeded the
plans’ assets by $9.5 million at the end of 2008 as compared to $4.6 million at
the end of 2007.  The unfunded benefit obligations were comprised of a
$3.4 million under funding of the company’s Smithville plan, which was acquired
as part of the Star acquisition, a $1.0 million under funding of the company's
union plan and $5.1 million of under funding of the company's director
plans.  The company does not expect to contribute to the director
plans in 2009.  The company expects to continue to make minimum
contributions to the Smithville and Elgin plans as required by ERISA, which are
expected to be $0.3 million and $0.1 million, respectively in
2009.





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


30





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)April
      4, 2009
                  
                  $
                  —
                  
                  
                  $
                  5,628April
      4, 2010
                  
                  
                  —
                  
                  
                  
                  203April
      4, 2011
                  
                  
                  —
                  
                  
                  
                  203April
      4, 2012
                  
                  
                  —
                  
                  
                  
                  338,803April
      4, 2013 and thereafter
                  
                  
                  —
                  
                  
                  
                  1,252$
                  —
                  
                  
                  $
                  346,089





During
the fourth quarter of 2007 the company entered into a new senior secured credit
facility that matures in December 2012. This agreement was later amended in
August 2008 to provide for the acquisition of TurboChef. Terms of the senior
credit agreement provide for $497.5 million of availability under a revolving
credit line.  As of April 4, 2009, the company had $338.6 million of
borrowings outstanding under this facility.  The company also has $5.2
million in outstanding letters of credit, which reduces the borrowing
availability under the revolving credit line.  Remaining borrowing
availability under this facility, which is also reduced by the company’s foreign
borrowings, was $146.2 million at April 4, 2009.





Borrowings
under the senior secured credit facility are assessed at an interest rate 1.0%
above LIBOR for long-term borrowings or at the higher of the Prime rate and the
Federal Funds Rate.  At April 4, 2009 the average interest rate on the
senior debt amounted to 1.55%. 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 April 4, 2009.





In August
2006, the company completed its acquisition of Houno A/S in Denmark. This
acquisition was funded in part with locally established debt facilities with
borrowings in Danish Krone.  On April 4, 2009 these facilities amounted to
$3.8 million in US dollars, including $1.8 million outstanding under a revolving
credit facility and $2.0 million of a term loan.  The interest rate on the
revolving credit facility is assessed at 1.25% above Euro LIBOR, which amounted
to 6.5% on April 4, 2009. The term loan matures in 2013 and the interest rate is
assessed at 6.14%.


31





In April
2008, the company completed its acquisition of Giga Grandi Cucine S.r.l in
Italy. This acquisition was funded in part with locally established debt
facilities with borrowings  denominated in Euro.  On April 4,
2009 these facilities amounted to $3.6 million in US dollars.  The
borrowings under these facilities are collateralized by the receivables of the
company.  The interest rate on the credit facilities is tied to six-month
Euro LIBOR. The facilities mature in April of 2015.








The
company believes that its current capital resources, including cash and cash
equivalents, cash generated from operations, funds available from its revolving
credit facility and access to the credit and capital markets will be sufficient
to finance its operations, debt service obligations, capital expenditures,
product development and integration expenditures for the foreseeable
future.





The
company has historically entered into interest rate swap agreements to
effectively fix the interest rate on its outstanding debt.  The
agreements swap one-month LIBOR for fixed rates. As of April 4, 2009 the company
had the following interest rate swaps in effect:





FixedNotional
                                      
                                      Interest
                                      
                                      
                                      Effective
                                      
                                      MaturityAmount
                                      
                                      Rate
                                      
                                      
                                      Date
                                      
                                      Date$
                                      25,000,000
                                      
                                      3.67
                                      %
                                      
                                      9/26/2008
                                      
                                      9/23/2011$
                                      25,000,000
                                      
                                      3.35
                                      %
                                      
                                      1/14/2008
                                      
                                      1/14/2010$
                                      20,000,000
                                      
                                      2.80
                                      %
                                      
                                      9/08/2008
                                      
                                      9/08/2009$
                                      20,000,000
                                      
                                      3.35
                                      %
                                      
                                      6/10/2008
                                      
                                      6/10/2010$
                                      15,000,000
                                      
                                      3.13
                                      %
                                      
                                      9/08/2008
                                      
                                      9/07/2010$
                                      10,000,000
                                      
                                      2.78
                                      %
                                      
                                      2/06/2008
                                      
                                      2/08/2010$
                                      10,000,000
                                      
                                      3.03
                                      %
                                      
                                      2/06/2008
                                      
                                      2/07/2011$
                                      10,000,000
                                      
                                      3.46
                                      %
                                      
                                      9/08/2008
                                      
                                      9/06/2011$
                                      10,000,000
                                      
                                      5.03
                                      %
                                      
                                      3/03/2006
                                      
                                      12/21/2009$
                                      10,000,000
                                      
                                      2.92
                                      %
                                      
                                      2/01/2008
                                      
                                      2/01/2010$
                                      10,000,000
                                      
                                      3.59
                                      %
                                      
                                      6/10/2008
                                      
                                      6/10/2011





The terms
of the senior secured credit facility limit the paying of dividends, capital
expenditures and leases, and require, among other things, ratios of indebtedness
of 3.5 debt to earnings before interest, taxes, depreciation and amortization
(“EBITDA”) and fixed charge coverage of 1.25 EBITDA to fixed charges. The credit
agreement also provides that if a material adverse change in the company’s
business operations or conditions occurs, the lender could declare an event of
default. Under terms of the agreement a material adverse effect is defined as
(a) a material adverse change in, or a material adverse effect upon, the
operations, business properties, condition (financial and otherwise) or
prospects of the company and its subsidiaries taken as a whole; (b) a material
impairment of the ability of the company to perform under the loan agreements
and to avoid any event of default; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the company of any
loan document. A material adverse effect is determined on a subjective basis by
the company's creditors.  The credit facility is secured by the
capital stock of the company’s domestic subsidiaries, 65% of the capital stock
of the company’s foreign subsidiaries and substantially all other assets of the
company.  At April 4, 2009, the company was in compliance with all
covenants pursuant to its borrowing agreements.


32





Financing Derivative
Instruments





The
company has entered into interest rate swaps to fix the interest rate applicable
to certain of its variable-rate debt. The agreements swap one-month LIBOR for a
fixed rates  The company has designated these swaps as cash flow
hedges and all changes in fair value of the swaps are recognized in accumulated
other comprehensive income.  As of April 4, 2009, the fair value of
these instruments was a loss of $5.4 million.  The change in fair
value of these swap agreements in the first three months of 2009 was a gain of
$0.2 million, net of taxes.





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
were no forward contracts outstanding at the end of the
quarter.


33





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
April 4, 2009, 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 thecompany's disclosure
controls and procedures were effective as of the end of this
period.





During
the quarter ended April 4, 2009, 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.


34





PART II.  OTHER
INFORMATION





The
company was not required to report the information pursuant to Items 1 through 6
of Part II of Form 10-Q for the three months ended April 4, 2009, except as
follows:





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





Issuer Purchases of Equity
Securities





Total
                  Number of
                  Shares
                  Purchased
                
                
                Average
                  Price Paid
                  per Share
                
                
                Total Number
                  ofShares
                  Purchased as
                  Part of Publicly
                  Announced
                  Planor
                  Program
                
                
                Maximum
                  Number of
                  Shares that May
                  Yet be
                  Purchased
                  Under the Plan
                  orProgramJanuary
      4 to January 31, 2009
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                627,332February
      1, 2009 to February 28, 2009
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                627,332March
      1, 2009 to April 4, 2009
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                627,332Quarter
      ended April 4, 2009
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                627,332





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 April 4, 2009, 1,172,668 shares had been purchased under the 1998 stock
repurchase program.


35





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).


36


SIGNATURE





Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





THE MIDDLEBY CORPORATION(Registrant)Date
                          May
      14, 2009
                          
                          By:
                          /s/  Timothy J.
      FitzGeraldTimothy
      J. FitzGeraldVice
      President,Chief
      Financial
Officer




37