Middleby 1Q13 Earnings Call Notes

posted in: Notes | 0

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“I can tell you that across all segments, all segments, I’m talking casual dining, fast casual, pizza, quick serve, they are all voicing great optimism across all the segments about the second half of 2013. I have personally called and spoken to many of our customers. I have spent the last 6 months basically either visiting or talking to our customers and they all are reporting significant optimism in the second half of 2013, and they are starting to report that business has begun to improve very strongly in April. So from that perspective, our customers have basically come back in April to seeing a much better improvement and they are feeling very optimistic for 2013. Some interesting — one interesting indicator that is fascinating for me as I watch all those numbers in this data compiled, for the first time in 22 months, casual dining restaurants outperformed quick serve in March. If you look — while casual dining have been really hit hard, for the first time in 22 months, they have outperformed the average performance of casual dining, outperformed the fast food industry in March for the first time.”

“finally, those casual dining chains are focusing on improving menu quality, speed of cooking and value.”

“after they implemented the Kitchen of the Future, and changed their menu and sped their cooking and retrained their people. Chili’s guest satisfaction scores are up in the first quarter of 2013 by over 10% across the whole chain…So as you look at their basically improvement, you have menu improvement, kitchen equipment innovation, investment in technology, and you look at what happened. So finally, those operators are trying to do the same. So today, I have 7 chains testing a similar process, casual dining chains, and ultimately, we will land several of those because they want the same thing. Apparently, the light went on and said, “Okay, we can’t compete. We are compressed between fast casual and quick serve and we’re losing the customers.” So this is what’s happening.”

“So let me summarize everything what’s happening. Very difficult start of the year for our customers because of weather, because of economic pressure on payroll tax. Today, April, it all changed. Very strong optimism across all the segments for the rest of the year and we’re starting to see April come through a lot better, including for our April.”