MANAGEMENT’S DISCUSSION AND ANALYSIS OF  FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net Sales Summary Results of Operations The following table sets forth certain items in the consolidated statements  of earnings as a percentage of net sales for the periods presented: (1) The company’s fiscal year ends on the Saturday nearest to December 31. (2) Consists of sales of products manufactured by Middleby and products manufactured by third parties. (3) Represents the elimination of sales amongst the Cooking Systems Group and from the Cooking Systems Group to the International Distribution Division. (1) The company’s fiscal year ends on the Saturday nearest to December 31. Fiscal Year Ended (1) 2004 2003 2002 Net sales 100.0% 100.0% 100.0% Cost of sales 62.1 64.6 66.6 Gross profit 37.9 35.4 33.4 Selling, general and administrative expenses 19.8 20.9 20.7 Stock repurchase transaction expenses 4.7 — — Acquisition integration reserve adjustments (0.7) — — Income from operations 14.1 14.5 12.7 Interest expense and deferred financing amortization, net 1.1 2.4 4.8 Debt extinguishment expenses 0.4 — 3.9 Gain on acquisition financing derivatives (0.1) — (0.1) Other expense, net 0.2 0.2 0.4 Earnings before income taxes 12.5 11.9 3.7 Provision for income taxes 3.8 4.2 1.1 Net earnings 8.7% 7.7% 2.6% Fiscal Year Ended (1) 2004 2003 2002 (dollars in thousands) Sales Percent Sales Percent Sales Percent BUSINESS DIVISIONS: Cooking Systems Group: Core cooking equipment $ 185,520 68.4 $ 162,366 67.0 $ 159,089 67.6 Conveyor oven equipment 54,183 20.0 49,236 20.3 48,394 20.6 Counterline cooking equipment 10,262 3.8 10,096 4.2 11,212 4.8 International specialty equipment 7,545 2.8 7,704 3.2 4,980 2.1 Cooking Systems Group 257,510 95.0 229,402 94.7 223,675 95.1 International Distribution Division (2) 46,146 17.0 42,698 17.6 36,162 15.4 Intercompany sales (3) (32,541) (12.0) (29,900) (12.3) (24,690) (10.5) Total $ 271,115 100.0% $ 242,200 100.0% $ 235,147 100.0% 5