Question-and-Answer Session
Operator
(Operator Instructions)Your first question comes from Peter Lisnic from Robert W. Baird & Co.
Peter Lisnic - Robert W. Baird & Co.
To start off on the top line, the comments that you have on orders or sales being hurt potentially. Is that just in the food processing business that you’re seeing that?
Tim Fitzgerald
I think we have seen a general slowing on the commercial side as well. The fruit processing, which is more of a capital equipment purchase of some of the products, you tend to see some deferral right now, but some of it is just driven frankly by quarter-to-quarter variability too. We have larger orders in that business and the timing of one of those can spike up or down in orders.
If you remember in the fourth quarter the sales growth in that business was up double digits, so I think you see some variability there, but I would also say both businesses are slower right now due to the economic conditions.
Peter Lisnic - Robert W. Baird & Co.
Okay and how do we get comfort that deferrals aren’t necessarily just, but they actually are deferrals instead of people just never ordering in this environment, Are you still hearing your customers talking about new equipment, there is just the uncertainty in the first quarter that is causing them to buy equipment in the second, third and fourth quarter?
Tim Fitzgerald
I think that’s our general feel. As it relates to the food processing business, there are a number of projects that, you see specific quotations out there and I don’t think it’s a situation where projects are being cancelled, you just see them being delayed of taking longer for finance departments to make a decision on those.
Peter Lisnic - Robert W. Baird & Co.
Do you have, can you give us maybe color commentary on what April looked like in terms of either orders for the commercial food service business and food processing and/or if you have like a backlog number?
Tim Fitzgerald
Well we don’t, we have always indicated the backlog we don’t think is meaningful overall to Middleby because our backlog tends to be three weeks out, and we don’t want to get in the habit of reporting what our quarterly order rate is, we haven’t done that in the past.
Peter Lisnic - Robert W. Baird & Co.
I understand that, but I’m just trying to get a sense as to what gives you the comfort that these deferrals will actually be realized in terms of revenue in the second quarter and the back half of this year, because I’m not sure the macro environment is getting a whole lot better.
- To read the full transcript on Seeking Alpha, click here »
