Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
May 31, 2005

Regulatory Report:
Sponsored by:
APW Wyott Innovations

Urgent: Public Comment By June 16
Washington's New Food Code Kicks In
Oklahoma Mulls Food Code Changes
San Mateo Inspectors Get Tablet Notebooks
Texarkana Health Center Starts Grading Restaurants

Industry Report:
Sponsored by:
Cold Innovations

McDonald's Wins Award For Fighting Global Warming
San Jamar, VHA Win NSF Food Safety Leadership Awards
Selim Bassoul Named Finalist for American Business Awards
Spata Steps Up As A&E Director At WD Partners
Follett Opens New Facility in Poland
'Road To Anaheim' Plans Accelerate

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In This Section:
Public Equipment Companies Do Well First Quarter, Supplies Flat
GDP Growth In First Quarter Better Than First Estimated
FER 2005 E&S Forecast Revision Coming Soon

This issue's Regulatory ReportSponsor: APW Wyott Innovations Industry ReportSponsor: Cold Innovations

Industry Report Sponsored by Hatco Corp.

Public Equipment Companies Do Well First Quarter, Supplies Flat
Large publicly held equipment companies did very well in the first quarter of 2005, with a number of majors posting double-digit revenue increases, according to reports released during the past few weeks. But supplies and tabletop companies were surprisingly flat during the quarter with three of four reporting flat to negative sales versus the first quarter of '04. And profits were still being squeezed for everyone by the gap between price increases and material costs.

In the latest public company overview compiled by John Muldowney, Clarity Marketing, such companies as Enodis, Middleby, Manitowoc, Standex and Rational saw revenue gains of 10% or more in the quarter compared to the year-earlier period. With acquisitions not factored out—Middleby's acquisition of Nu-Vu being the primary one—the six companies charted by Muldowney saw revenues increase a blended 13.3%. Once again, chain-oriented suppliers saw stronger growth than spec-oriented companies, but the latter saw significant improvement.

Tabletop and supplies companies, however, were down a combined 1%, with only one of the four tracked companies reporting an increase. Although the overall number is affected by the continuing restructuring of Oneida, the trend was still surprising given reports of continuing operator sales increases.

While margins and profits were impacted by ongoing high materials costs, most public companies expect profits to improve as price increases announced in the first quarter take hold.


Section sponsored by Hatco Corp.

GDP Growth In First Quarter Better Than First Estimated
You could almost hear the sigh of relief from economists throughout America as the U.S Commerce Department released its second estimate of first quarter 2005 real gross domestic product growth last Thursday. The so-call "preliminary" estimate was pegged at 3.5%, a significant gain over the "advance" estimate of 3.1% that Commerce announced last month. The new estimate is much closer to most economists' original forecasts of growth in the quarter.

The major reason for the revision? Americans bought significantly fewer imported goods than originally estimated. Since these are subtracted from the GDP total, fewer imports means Americans bought more American-made goods.

The data are also likely to lead economists to revise upward their forecast for second quarter growth. Inventories grew less than originally estimated, $68.4 billion versus the original projection of $80.2 billion. This probably means more production in the second quarter and thus a stronger GDP growth number.

Section sponsored by Hatco Corp.

FER 2005 E&S Forecast Revision Coming Soon
A number of you have asked FN's economic honcho and publisher, Robin Ashton, when we will have a revised forecast for 2005 equipment and supplies sales. The answer, he says, is soon.

Most of the first quarter numbers have now been released and reported in this space, including MAFSI's Business Barometer, the NRA Performance Indices for the period and John Muldowney's analysis of public E&S company performance. We will see the NAFEM Industry Indices in the next week or so—they are always first reported in NAFEM in Print. And Kent Motes of AutoQuotes has promised us blended data on price increases.

Once we have all this, Muldowney and Ashton will take a look at our original 2005 forecast with an eye to any changes.

For those of you who have asked about NAFEM Size Shape Study numbers, revised numbers applying new values from the most recent NAFEM study will not be available until after Sept. 1, by agreement with NAFEM.

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