The Middleby Corporation (MIDD): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Middleby reported strong results for second-quarter 2014, with earnings of $0.85 per share versus $0.67 earned in the year-ago quarter. Quarterly revenues rose 17% year over year to $424.8 million, driven by organic as well as inorganic growth. The acquisition of Viking along with Celfrost, Wunder-Bar, Market Forge and Processing Equipment Solutions are proving beneficial to the company. Moreover, Middleby is also increasing its market share through organic growth, with strength across all segments. However, Middleby's overseas operations expose it to various risks including social, political and those related to foreign exchange transactions. Additionally, Middleby's overdependence on food processing units is a cause of concern. The volatility of raw material prices also impacts the company's strategies. Based on these factors, we prefer to have a balanced view on the stock and maintain our Neutral recommendation.

Overview:

Elgin, IL-based The Middleby Corporation (MIDD) provides cooking, warming, food preparation and packaging equipment to commercial, industrial processing and residential markets. Formerly known as Oven Company, it was acquired by TMC Industries Ltd. in 1983. Post the acquisition, the company's name was changed to Middleby Corporation in 1985. The company operates in three main segments.

Commercial Foodservice Equipment Group: This segment manufactures cooking equipment for restaurants and institutional kitchens. The products include conveyor ovens, proofing ovens, speed cooking ovens and induction cooking equipment. The equipment in this segment are sold under brands like Combi , Lang , MPC , PrefectFry , CookTek , Southbend and Wells .

Food Processing Equipment Group: This segment manufactures equipment for the food processing industry. It offers a variety of products including batch ovens, processing ovens, defrosting and packaging equipment among others. The products are sold under various brands such as Auto-Bake , Alkar , Cozzini and RapidPak .

Residential Kitchen Equipment Group: This segment manufactures equipment for the residential market, recording the revenues for Viking and Brigade. It offers ovens, dishwashers, cooktops, microwaves and other outdoor equipment.

This segment was formed after the company acquired Viking range in December last year.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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