Middleby Corp. Reports Operating Results (10-K)
Middleby Corp. has a market cap of $1.66 billion; its shares were traded at around $89.76 with a P/E ratio of 23.2 and P/S ratio of 2.6. Middleby Corp. had an annual average earning growth of 35.3% over the past 10 years. GuruFocus rated Middleby Corp. the business predictability rank of 4.5-star.Mutual Fund and Other Gurus that owns MIDD: John Rogers of Ariel Capital Management, Ken Heebner of Capital Growth Management LP, RS Investment Management, NWQ Managers of NWQ Investment Management Co, Mario Gabelli of GAMCO Investors, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:In January 2009, subsequent to the company s fiscal 2008 year end, the company acquired TurboChef Technologies, Inc. (“TurboChef”) for cash and shares of Middleby common stock. The total aggregate purchase price of the transaction amounted to $160.3 million including $116.3 million in cash and 1,539,668 shares of Middleby common stock valued at $44.0 million. TurboChef is a leader in speed-cook technology, one of the fastest growing segments of the commercial foodservice equipment market. TurboChef s user-friendly speed cook ovens employ proprietary combinations of heating technologies to cook a variety of food products at speeds up to 12 times faster than that of conventional heating methods.
In April 2009, the company acquired the assets of CookTek LLC (“CookTek”) for $8.0 million in cash and $1.0 million in a deferred payment due the seller. CookTek is a leader in the manufacture of induction cooking and warming systems for the commercial foodservice industry. CookTek s line of induction cooking equipment utilizes magnetic waves to heat product in a highly energy efficient manner at speeds fast than conventional cooking equipment.
In April 2009, the company acquired substantially all of the assets of Anetsberger Brothers, Inc. (“Anets”), a leading manufacturer of griddles, fryers, and dough rollers for the commercial foodservice industry for $3.4 million in cash and $0.5 million in deferred payments. The acquisition of Anets allows Middleby to continue to expand its portfolio of leading brands in cooking and warming and increase its leading position in the griddle and fryer segment.
The company believes that the worldwide commercial foodservice equipment market has sales in excess of $20 billion. The cooking and warming equipment segment of this market is estimated by management to exceed $1.5 billion in North America and $3.0 billion worldwide. The company believes that continuing growth in demand for foodservice equipment will result from the development of new restaurant concepts in the U.S. and the expansion of U.S. and foreign chains into international markets, the replacement and upgrade of existing equipment and new equipment requirements resulting from menu changes.
The global food processing equipment industry is highly fragmented, large and growing. The company estimates demand for food processing equipment is approximately $3 billion in the U.S and $20 billion worldwide. The company s product offerings are estimated to compete in a subsegment of total industry, and the relevant market size for its products are estimated by management to exceed $0.5 billion in the U.S. and $1.5 billion worldwide.
The company's backlog of orders was $63.5 million at January 1, 2011, all of which is expected to be filled during 2011. The acquired PerfectFry and Cozzini businesses accounted for $7.7 million of the backlog. The company's backlog was $51.7 million at January 2, 2010. The backlog is not necessarily indicative of the level of business expected for the year, as there is generally a short time between order receipt and shipment for the majority of the company s products.
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