1 february 19, 2008 roth capital growth conference roth capital growth conference
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February 19, 2008
ROTH Capital
Growth Conference
Roth Capital Growth Conference
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Forward Looking Statements
Statements made in this presentation or otherwise attributable to the company regarding the company's business which are not historical fact are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company cautions investors that such statements are estimates of future performance and are highly dependent upon a variety of important factors that could cause actual results to differ materially from such statements. Such factors include, but are not limited to variability in financing costs; quarterly variations in operating results; dependence on key customers; international exposure; foreign exchange and political risks affecting international sales; changing market conditions; the impact of competitive products and pricing; the timely development and market acceptance of the company's products; the availability and cost of raw materials; and other risks detailed herein and from time-to-time in the company's SEC filings.
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Middleby Corporation Executive Summary
The Middleby Corporation is the worldwide leader in the manufacture and distribution of a broad line of Cooking, Warming and Preparation Equipment for the commercial restaurant industry and food processors
Headquartered in United States (Chicago, Illinois)
Publicly traded on US stock exchange (symbol: MIDD)
$500+ million in annual revenue
1,600 employees
12 Worldwide Manufacturing Facilities– 11 US Facilities– 1 European Facility– 2 Asian Facilities
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Key Company Highlights
Market Leader of Foodservice Equipment
– #1 or #2 market position in U.S. across most product lines Established Well-Respected Brands
– Premium brands recognized for innovative technology, efficiency and quality Premier Customer Base
– Aligned with leading U.S. and international restaurant chains and food processors
Positioned for Growth
– Strong pipeline of new differentiated products
– Focus on higher growth segments across diverse end markets Unique Global Footprint
– International sales and service infrastructure provides attractive opportunities in emerging markets
Strong Profitability And Commitment to Operational Excellence
– Ongoing success in process improvements Successful Track Record of Growth through Acquisitions
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Record Sales and Earnings Growth
Middleby Financial Performance
($ in millions)
Sales Growth through Product Innovation and Acquisition of Industry Leading Brands
103.6
235.1 242.2271.1
316.8
403.2
500
11.5 33.5 38.8 52.2 64.6 86 100
0
100
200
300
400
500
600
2001 2002 2003 2004 2005 2006 2007 LTM
Revenues
EBITDA
Record Sales and Earning Growth
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Strong Relationships with Premier Customers
Blue-chip, customer base
Long standing relationships
Limited customer concentration
Large installed base
Serve all food segments
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Revenue Breakdown
15%
85%
Food Processing
Commercial Foodservice
Commercial Foodservice and Food Processing Expanding Business Segments
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Fryers16%
Grills, Ranges & Broilers
16%
Convection Ovens
10%Heating Cabinets
11%
Baking & Other Ovens
7%Conveyor Ovens
5%
Microwave Ovens
5%
Combi Ovens
6% Toasters / Counterline
4%
Steam Cooking
20%
Commercial Foodservice Market Leader
___________________________1. Source: North American Association of Food Equipment Manufacturers and management estimates.
U.S. Hot-side Foodservice Equipment Market by Product (1)
Middleby has leading brands and technology in the the foodservice equipment industry
The commercial cooking equipment market is in excess of $3.0 Billion.
Highly fragmented
Middleby focus on Brands and Technology
– Equipment in the restaurant and critical the success of the restaurant.
– Equipment specification and purchasing decisions driven by chef / operator
– Product pricing driven by differentiated technology
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Conveyor Ovens #1
Papa John’s, Pizza Hut, Domino’s, Costco, Red Lobster, Olive Garden
Fryers Rethermalizers
#2#1
KFC, Dunkin’ Donuts, McDonald’s, Taco Bell
Convection Ovens Combi-ovens Deck Ovens
#1#2#2
KFC, Burger King, Cracker Barrel, Cheesecake Factory
Ranges Upright Boilers
#2#1
Morton’s, Wendy’s, Bob Evans
Charbroilers Griddles
#2#2
Outback Steakhouse, Applebee’s, Culver’s
Baking Ovens Proofers
#1#1
Subway, Bob Evans
Product U.S. Market PositionBrand Representative Customers
We succeed due to strong brands, product innovation, service and support and our continuous commitment to quality
Market Leading Brands - Foodservice
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Warming Cabinets Cook and Hold Banquet Carts
#1#2#2
McDonalds, Dunkin Donuts
Infrared Ovens Hearth Bake Conveyors
#1#1
Telepizza
Cooking Suites Ranges Custom Cooking
#1#3#1
Cheesecake Factory, PF Changs
Ventless Cooking Warming Equipment Pressure Fryers
#1#1#3
KFC, McDonalds, Waffle House
Combi-ovens #5 Tesco, Morrisons
Product U.S. Market PositionBrand Representative Customers
We succeed due to strong brands, product innovation, service and support and our continuous commitment to quality
Market Leading Brands - Foodservice (cont)
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Counter line Equipment Panini Grills
#1#1
7-Eleven, QT Express, Taco Bell
Toasters
#1 Chipotle, Panera Bread, Quizno’s
Marine Equipment #1
Carnival Cruise Ships
Product U.S. Market PositionBrand Representative Customers
We succeed due to strong brands, product innovation, service and support and our continuous commitment to quality
Market Leading Brands - Foodservice (cont)
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Middleby Brand Products
Conveyor Oven Combi Oven Convection Oven Fryer
Range Infrared Broiler Steamer Baking Oven
Automated oven with energy management system
Combination steam and convection in one cavity
No-turn bake capabilities Highest efficiency burner
Non-clog burner and water proof controls
Used by the best steakhouses in the world
Boilerless, no-lime steamer V-air technology cooks bread in less than 15 minutes
We offer a comprehensive line of innovative foodservice equipment
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Slicers/ Emulsifying
15%
Fryers7%
Portioning15%
Ovens22%
Forming9%
Packaging15%
Grinding6%
Breading/ Battering
11%
Food Processing Industry
___________________________1. Source: Management estimates.
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U.S. Hot-side Foodservice Equipment Market by Product (1)
Middleby has leading brands and technology in the food processing equipment industry
The food processing equipment market is in excess of $1.5 Billion.
Highly Fragmented
Middleby focus on Brands and Technology
– Equipment specification and purchasing decisions driven by operators and engineers
– Product pricing driven by differentiated technology
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Batch Ovens Continuous Ovens Belt Ovens
#1#1#2
Sara Lee, Smithfield
Food Packaging Equipment
#2 Kraft, Hormel
Conveyorized Breaders Battering Equipment Forming Slicing
#2#1#2#2
Tyson, Pilgrims Pride, Keystone Foods, OSI
Product U.S. Market PositionBrand Representative Customers
We succeed due to strong brands, product innovation, service and support and our continuous commitment to quality
Market Leading Brands – Food Processing
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Middleby Growth Drivers
Favorable Industry Dynamics
New Product Pipeline
Acquisitions
International Expansion
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Favorable Industry Dynamics
Many factors supporting growing demand for foodservice equipment
Dual income families continue to eat out
Percentage of household income spent on food prepared outside the home is increasing
Baby boomer generation approaching retirement
Growth in fast casual dining and breakfast
Emergence of co-branding process is gaining steam
Expansion of new menu items driving purchases of new foodservice equipment
On-premise baking more prevalent
Growing awareness of nutrition implemented through low carb diets and increased presence of salads with grilled meat and fish
Average lifespan of foodservice equipment is ~8 years
Large installed base (over 850,000 establishments in US)
Replacement represents approximately one-third of the market
Trend in eating out gaining momentum
Rapid growth in developing nations such as China and India
U.S. chain concepts expanding internationally
Foodservice operators demanding greater productivity through automation
Need for equipment with greater energy cost savings
Increased cost of trans-fat free oil
New Restaurant / Store Openings
Menu Changes
Favorable Demographics
Replacement of Existing Equipment
Expansion of International Markets
Rising Foodservice Operator Costs
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Speed
No-turn bake convection oven High speed conveyer with 25% reduction in cooking time Hydrovection ovens
Energy/Cost Savings New energy management system technology High efficiency fryers
Automation/Efficiency Self cleaning ovens Advanced controls
Safety Auto shut-off pilots in ranges Waterproof controls
Recent InnovationsCustomer Demand
New Products Driving Growth
Our Success
We are committed to meeting changing customer needs
We Introduce More than 10 Innovative New Products Each Year
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New Product Pipeline - Foodservice
Mini WOW! Oven
Rethermalizer
Solstice Supreme Fryer
Redesigned Combi-Ovens
500 Series Range
Tanduri Oven
Revolving Tapinyaki Griddle
2007 Introductions 2008 Introductions
High H Oven
Hydrovection Oven
Rocket Fryer
Ventless Hood
Pressure Fryer
Visual Cooking Combi-Ovens
Samooza Fryer
New Products Represent more than 20% of Net Sales
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New Product Pipeline – Food Processing
Cyclone Belt Oven
Flash Pasteurization
Mid-Size J-Con Oven
Wireless Controls
2007 Introductions 2008 Introductions
Conveyor Fryer
Co-Extrusion
Forming Equipment
Intellijet Water Cutter
New Products Typically Carry Profit Margins >5% Higher than existing Products
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Acquistion Strategy
Acquire Leading Brands and Technologies• Established Market Positions
• Differentiated Products
• Higher Profit Margin
Increase Operating Efficiency• Eliminated Unprofitable SKU’s
• Focus on Core Products
• Streamline Production and Administrative Processes
Realize Synergies• Increased Purchasing Leverage
• Utilization of Middleby Low Cost Production Facilities
• Leverage Sales and Distribution Network
• Leverage Existing Chain Relationships
Creating the Premier Foodservice Equipment Company
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Middleby Worldwide Executive Summary
Middleby Worldwide is the sales, service and distribution arm supporting the Middleby Brands internationally in over 100 countries. Middleby Worldwide has company owned operations in key markets around the world.
Middleby Owned Sales and Service Offices in Key Markets:
– Mexico
– Australia
– UK
– Spain
– Sweden
– China
– India
– Korea
– Taiwan
– Philippines
– Mid-east
– Russia
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Global Reach
Test kitchens throughout the world allow Middleby to educate customers of the benefits of its equipment through hands-on experience and training
Worldwide service is critical and highly valued by U.S. chains expanding into international markets
Worldwide sales infrastructure allows direct contact with key decision makers, especially in high-growth markets
Philippines and China manufacturing capabilities provides regional presence in high-growth Asian markets
Manufacturing facility, sales office and test kitchen Sales office with test kitchen Sales office only
Key Advantages
Mississauga, Ontario, Canada
# of Employees: 2
Bilbao, Spain# of Employees: 11
Manchester, UK# of Employees: 20
Delhi, India# of Employees: 5
Seoul, South Korea# of Employees: 11
Shanghai, China# of Employees: 14
Taipei, Taiwan# of Employees: 7
Manila, Philippines# of Employees:
- Manufacturing: 95 - Sales & Dist.: 16
Mexico City, Mexico# of Employees: 26
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Financial Themes
Top Line Growth
– Positioned in faster growing segments
– Continued new product innovation
– Acquisition growth
Focus on Operating Margins
– Standardization of product platforms
– Strategic supply chain initiatives
– Integration of recent acquisitions
Strong Balance Sheet
– Continued debt reduction
– Capacity to pursue strategic acquisitions
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Key Investment Highlights
Market Leader of Foodservice Equipment
Established Well-Respected Brands
Premier Customer Base
Positioned for Growth
Unique Global Footprint
Strong Profitability and Commitment to Operational Excellence
Successful Track Record of Growth through Acquisitions
Experienced and Proven Management Team