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| TURBOCHEF TECHNOLOGIES, INC. (Nasdaq: OVEN) |
| RESEARCH OVERVIEW |
| COVERAGE INITIATED: 11-05-02 @ *$3.24 (Price target *$22.50) (*Split Adjusted) CURRENT RATING: 7 CURRENT 12-18 MONTH PRICE TARGET $23.00 rating Increased from 2 to 4 and Target reduced from $22.50 to $21.00 on 06-07-04 Increased Price Target from $21 to $26 on 03-22-05 Increased Rating from 4 to 6 on 04-29-05 Increased rating from 6 to 7 and decreased Target from $26 to $23 on 03-17-06 |
TurboChef Technologies, Inc. ( NASDAQ: TRBO) is a Dallas, Texas based technology company focused on the development and sale of next generation high speed cooking devices for both commercial and residential applications. The company's commercial oven called the C-3 utilizes combinations of microwave energy and convection technologies that circulate air at as much as 60 mph, to cook food 7 to 10 times faster than a convention oven, but with equal or better quality. In September 1997, the company entered into an agreement with Maytag Corp. As one might expect, the market reacted quite favorably to this alliance, as the perception was that Maytag's resources would create measurable benefits to TRBO, which included manufacturing and marketing help as well as financial contributions. As a result, the Maytag alliance represented an attractive option for the company from the standpoint that Maytag could provide the type of support necessary to advance the technology, as well as market the product(s) once the technical barriers were addressed. To this end, the Maytag alliance resulted in the payment of research and development fees of around $12 million by Maytag. These fees were offset by research activities, which accelerated the development of the product base, which we believe largely, addressed many of the technical barriers that existed at the time. The company believes that Maytag may have spent an additional $70+ million internally between research, development, manufacturing and marketing. On the positive side, this lead to the C-3 model countertop commercial oven which is the model that the company is selling today. After a management change at Maytag, the company gave its North American licensing rights back to TRBO about 24 months ago. Since that time, TurboChef has been marketing the oven on their own and has been creating measurable sales traction amongst a number of large customers including Subway (franchised sandwich shops), BP a.k.a. "British Petroleum" (convenience stores), HMS Host (airport concessions), Loews Cineplex Entertainment (movie theatres), Publix Supermarkets and a number of others. When we add up the potential of the channels the company is already selling into, the numbers are very compelling. For example, with 850,000 restaurants in the U.S. alone, and an average wholesale selling price between $7,500 and $10,000 depending on volume, it doesn't take a great deal of math to realize that the company has a potential market(s) of several billion dollars. Moreover, we believe the company's breakeven to be somewhere between 400and 450 ovens per quarter. While the current C-3 oven is a commercial model, we know that the company also has a residential prototype. The company's recently announced managment change/takeover and its recent sale of 20,000 units to Subway have significantly enhanced the TRBO story. |
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| EDGEWATER RESEARCH PARTNERS LLC DISCLAIMER STATEMENT The information contained in this report has been written by David Lavigne of EdgeWater Research Partners LLC ("Edgewater") and has been derived from sources considered reliable, but cannot be guaranteed by us. Edgewater and Lavigne are not aware of any material conflict of interest known at the time of the publication of this report. Financial projections and estimates herein represent our independent analysis based upon information in conjunction with the Company's publicly available financial statements. Edgewater and Lavigne may maintain positions in the securities referenced, which may change at any time without notice. Edgewater does not receive fees, warrants or any other compensation from issuers in connection with its research. It does however, encourage issuers and it representatives to subscribe to Edgewater's research, and from time to time, issuers and or their representatives may also purchase individual copies of Edgewater's research products. Edgewater and Lavigne may own options, rights or warrants to purchase any of the securities of the Company. This report is for informational purposes only and is not to be construed as specific investment advice or recommendations, nor as an offer to sell or a solicitation of an offer to buy any securities. The securities referenced are speculative in nature and may not be suitable for your specific investment objective. For specific investment advice or recommendations, please consult with your investment representative. |
| Purchase TRBO Initial Coverage Research Report |
| $30.00 |
| Issuer Purchase Disclosure . In late 2002, Employees and or Directors of OVEN subscribed to 10 full annual subscriptions ($395) for Edgewater's newsletter and research information. The subscriptions were not renewed. In addition, OVEN has purchased 0 research reports from Edgewater at the standard price of $30 each. In July 2004, OVEN paid a fee of $10,000 to attend EdgeWater's "Fall 2004 Micro Cap Conference for Investment Professionals". In March 2004, they paid a fee of $8,500 to attend EdgeWater's "Spring 2005 Micro/Small Cap Conference for Investment Professionals". In September 2005, OVEN paid a fee of $8,500 to attend EdgeWater's "Fall 2005 Micro Cap Conference for Investment Professionals". |
| Purchase TRBO Fiscal 2002 Earnings Update |
| $15.00 |
| Purchase TRBO Rating Change/Update |
| $15.00 |
| Purchase TRBO 06-30-04 Earnings Update |
| $15.00 |