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The Company designs, manufactures, markets, distributes and services of a line of cooking equipment and related products used in all types of commercial restaurants, institutional kitchens, and food processing operations.
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swanriverdaisy (29.59) Submitted: 6/21/06 3:46 PM : Start Price: $40.10 MIDD Score: 28.30
Midd has ovens in 1/3 of restaurants and has been doing very well with their business strategy over the past few years. The company is currently trying to buy Enodis and by doing so would substantially increase their size and market. They would also take on debt to do so. It's would be a large acquisition but the companies record is very good for choosing and assimilating their acquisitions well. Thus far, Enodis has resisted Middleby's advances. I think the uncertainty of whether this will go through, the possible increased debt, whether Middleby management is up to handling an acquisition of this size, and the current downswing in the market has squashed their price right now.
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swanriverdaisy (29.59) Submitted: 9/02/06 6:52 AM
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A brief update on Middleby. Acquiring Enodis is off the front burner. I'm not convinced it's gone for good but it is for now. Middleby just acquired a Danish oven maker called Houno, a company that has been producing approximately $10 million in annual sales. It should initially provide a 2-3% increase to Middleby's revenue but perhaps more than that with a bit of Selim magic. Typically when Middleby makes acquisitions they are able to increase margins up to Middleby's higher levels within a few years. Houno will help to provide additional international exposure for Middleby. Houno's majority of sales have been to Western Europe and also to Scandinavia, and a small percentage of current sales are to Asia and Australia. Middleby's plan is to have international sales at 33% of revenue in 2-3 years. Enodis, by the way, has dropped in price since all her suitors have gone away. I'm still not convinced Middleby doesn't have a gameplan to acquire Enodis. We'll just have to wait and see how the game plays out.
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8martini8 (88.27) Submitted: 9/05/06 10:29 PM
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Ovens in 1/3 of restaurants? Can this possibly be right? 1/3 of American restaurants? Does this include fast-food chains, diners, hgih-end hotel restaurants, and mom-'n-pop operations? How is their market cap only $626 mllion?
swanriverdaisy (29.59) Submitted: 9/06/06 1:43 AM
I didn't make up the comment but also don't find enough hard evidence to suit me. I've heard the comment in various posts and did find one article from 2004, which I can't prove is accurate. " Although the company is known for its strength in the pizza and "fast-casual" markets, CEO Selim Bassoul said there is a piece of Middleby equipment in one out of three restaurant kitchens in the world."http://tinyurl.com/govlvPlease ask further questions on the Middleby board as I'd rather this doesn't function as a blog. I've heard we will have blogs eventually. :-) Thanks
swanriverdaisy (29.59) Submitted: 3/10/07 5:24 PM
Middleby just released 2006 earnings with record growth, great margins and organic growth of 13.3% (Q3 was 7.3% organic growth and the company has in the past stated it's goal was 10% organic growth). Gross margins are up 100 basis points to 39.7%. Doing well with paying down debt. The company is managing its debt leverage well while making acquisitions. With the February announcement of buying Jade from Maytag they now have an entry into the residential market plus Jade's distribution channel will also be used to market Magic Chef outdoor products. Jade is expected to detract from earning for a few quarters until the Middleby magic begins to work. I would guess with an entry into the residential market that there will be additional acquisitions to broaden their product offerings in this area. Hard to find anything to dislike about his company: management that is competent in executing their business plan, passionate about their product and know their market and market trends very well, plus skilled with finding acquisitions to expand their market both in the US and internationally yet willing to let acquisitions go rather than get into a bidding war. A holding I think I will have long term.
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