Middleby 3Q16 Earnings Call Notes

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The Middleby Corporation’s (MIDD) CEO Selim Bassoul on Q3 2016 Results

Have not seen tectonic shift in customer behavior

“From our perspective we do not see any indication in our customer base in the restaurant business that they are slowing down their demand for innovation. I don’t see that going away. The number of tests that we are performing, where people are changing the way they do they have kitchen and their processes and their automation in the kitchen is at the highest level we’ve seen at Middleby, in terms of testing and penetration of our customers. From that perspective, I can tell you that Middleby at this moment has not seen a tectonic shift that has been everybody has worried about, we have not seen it.”

Americans still eating out more

“So I am going to give you a vision of what I call 2017 to 2020. So let’s look at Foodservice, to answer your question. First, I will tell you that there is data that indicates that Foodservice will basically grow. I’m talking restaurants will continue to grow, because eating out in restaurant and eating and drinking is double in the U.S., have outrun those of grocery stores, and we think that trend is staying. And people are now eating out more than just spending on groceries. So again, while Americans have been consuming a larger and larger amount of their food away from home, it is now a pattern that a lot of them are spending it even more in the restaurant. So I’m going to give you data that looks, even why I am very excited about the restaurant business.”

Tim Fitzgerald

Did have to take some price increases due to steel

“So I mean we have, we did institute some price increases on the commercial side, on the Food Processing side, just given the length of quotations, and for orders it takes a little bit longer to get those price increases rolled in, so that’s why there is a little bit more of an impact in that segment than others. But I mean I think we talked about the impact of 0.5% to 1% on margins and you saw margins come down slightly relative to the second quarter, but I think as we go into next year, I believe we think that pricing will largely offset that.