Monthly Archives: December 2016

Clayton Homes Acquires Doyle Mobile Homes

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Clayton Homes, the nation’s largest builder of manufactured homes, has acquired retailer Doyle Mobile Homes.

Doyle Mobile Homes is a manufactured home dealer that exclusively sells the Clayton Homes brand and is located in Flemingsburg, Kentucky.

Started by the two Doyle brothers, Adrian and Russell, after they returned from military service in World War II, the enterprise originally focused on selling used cars until Russell Doyle noted that while buying used cars in North Carolina he was “quite often run off the smaller roads by these so called ‘House Trailers.’” Adrian Doyle went and purchased several 8-foot wide House Trailers and the company was on its way to becoming a manufactured home seller.

By 1975, Doyle Mobile Homes had become one of Clayton Homes’ top retailers, and they are one of only 7 Hall Of Fame dealers nationwide out of over 1,100 dealers.

CEO of Clayton Homes, Kevin Clayton, said. “We are so fortunate they have decided to join Clayton Homes. Their home center was inducted into the Hall of Fame in 2001 and their home center is achieving a 98 percent Customer Service Index score, which has rarely ever been done.”

In addition to manufactured homes, Doyle also sells underground storm shelters.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BYD to Enter Italy’s Pure Electric Bus Market

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Turin will be the first city in Italy to deploy BYD Company’s pure electric buses.

The Chinese battery and vehicle-maker also recently announced its buses will be purchased by transit systems in Iran and Korea.

The city of Turin is purchasing 19 BYD ebuses delivering zero emission transport on city streets.

BYD won the country’s first big tender for 12 metre pure electric buses which was awarded on September 23, 216. The contract has a total value of over €10 million.

The tender is for long range, full size buses to operate on Piedmont Region’s urban transport networks.

BYD will supply a fleet of 12m ebuses together with the provision of full service support for 10 years. The buses use BYD’s Iron Phosphate (or “Fe”) Battery.

BYD ebuses will begin serving the major cities of Piedmont in summer 2017, and the ebuses will connect the city centers with suburban areas.

“Thanks to the vision of GTT to make Turin green this order ensures that Italy, together with the UK and France, is a top market for BYD in Europe”, said Isbrand Ho, Managing Director of BYD Europe. “We have consistently said that we would have ‘lift off’ in Europe when our order book exceeded 100 ebuses. These Italian orders bring the current total to over 100 units: we have truly arrived. What a way to end the year!”

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million is now worth roughly $1.77 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

No Hope for Berkshire in FERC Market Rate Dispute

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The Federal Energy Regulatory Commission (FERC) has stuck to its June 2016 decision that requires Berkshire Hathaway’s NV Energy to redo its rates, including issuing revised rates that go back retroactively to Jan. 9, 2015.

On December 21, FERC declined to revisit the ruling stating, “The Berkshire MBR Sellers’ request for rehearing is denied.”

FERC’s June decision requires the affected utilities to provide consumer refunds. FERC found that NV Energy, and Berkshire’s other utility PacifiCorp, were not allowed to sell electricity at market rates.

In the June decision FERC stated, “…we find that the additional information supplied by the Berkshire MBR Sellers has failed to rebut the presumption of market power in the PACE, PACW, Idaho Power, and NorthWestern balancing authority areas. In the absence of reliable delivered price test (DPT) analyses rebutting the presumption of market power, we find that continuation of the Berkshire MBR Sellers’ market-based rate authority in these four balancing authority areas is not just and reasonable.”

FERC went on to order new rate plans.

“Therefore, we herein revoke the Berkshire MBR Sellers’ market-based rate authority in the PACE, PACW, Idaho Power, and NorthWestern balancing authority areas. Accordingly, the Berkshire MBR Sellers are directed to file revised market-based rate tariffs further limiting sales at market-based rates to areas outside of the PACE, PACW, Idaho Power, and NorthWestern balancing authority areas within 30 days of the date of this order.”

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Forest River to Locate New Plant in LaGrange, Indiana

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RV manufacturer Forest River, a subsidiary of Berkshire Hathaway, has purchased a 100-acre-plus industrial site in the town of LaGrange, Indiana. The move brings much needed activity to a facility that has been sitting empty for the past eight years, and much needed jobs to the community of roughly 2,700 people.

The site is the location of the former Dutch Housing plant and a special public hearing will be held on Jan. 16, 2017, at the Town Hall to designate the former Dutch Housing plant an economic revitalization zone.

It is expected LaGrange officials will approve Forest River’s request for a proposed 10-year $1.7 million tax abatement on the property and equipment at that time.

The move by Forest River to locate a facility in LaGrange will be a boost for area employment, with as many as 250 jobs expected the first year, and as many as 450 by the end of 2018.

Forest River has not announced exactly what it will be building at the new facility, but part of its production line from its Topeka plant is expected to be relocated to the facility.

The RV business has been brisk in 2016, and according to the Recreational Vehicle Industry Association, 2017 should be the eighth consecutive year of growth with shipments predicted to reach 404,800 units.

The RVIA cites “continued gains in jobs, incomes and household wealth combined with relatively low levels of inflation, unemployment and interest rates,” as the reason for optimism.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

MiTek’s New Atlanta Warehouse and Distribution Facility Offers Rapid Delivery Within 500-Mile Radius

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MiTek, a Berkshire Hathaway company, has opened a new warehouse and distribution facility in Atlanta GA.

The new facility is the third warehouse opened by MiTek in the past 13 months, and it joins other strategically placed manufacturing, warehousing, and distribution facilities already located in New Jersey, Florida, Indianapolis, Minnesota, Houston, Phoenix, and California.

The new Atlanta facility enables rapid distribution of MiTek building products to customers within a 500-mile radius. Fully functional on February 1, 2017, the new facility offers products that include USP Structural Connectors, USP Epoxy and fastener products, as well as MiTek truss connector plates. The facility will primarily serve MiTek’s two-step customers and support MiTek’s rapidly expanding sales network.

The new warehouse offers 45,600 sq. ft. of space, of which 3,500 sq. ft. will be dedicated to offices, training, and customer support. The address of the new facility is 4380 International Parkway, Atlanta, GA 30354. The warehouse has immediate access to I-75, I-285, I-85, and is one mile from the Hartsfield-Jackson Atlanta International Airport.

“This is the third new MiTek warehouse and distribution center we have opened recently. With its strategic location, it provides us with even more coverage areas for one-day or two-day delivery of MiTek products,” said Todd Asche, Senior Vice President of Operations. “This new warehouse and distribution facility is clear evidence that MiTek is ‘on the march,’ with a goal of distributing our products at an expansive geographical scale

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Dairy Queen Plans Major International Expansion in Korea

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International Dairy Queen, Inc. has signed a multi-unit development agreement to expand into the Republic of Korea with plans to open 50 DQ Grill & Chill locations within the next five years.

The agreement is with the privately held M2G USA Investment, Inc., whose diversified business portfolio includes ownership of restaurants, hotels, public storage businesses, household appliance manufacturing, shoes and an extensive global real estate portfolio.

“The DQ® brand continues to expand in new international markets,” said John Gainor, President and CEO of International Dairy Queen, Inc. (IDQ). “We are looking forward to working with M2G USA Investment to bring our renowned menu, signature treats and quality service to the Republic of Korea.”

The DQ Grill & Chill locations in Korea will serve a full range of food options including its signature GrillBurgers™, fan favorite chicken strip baskets, chicken sandwiches, a variety of salads and sandwiches. The DQ Grill & Chill restaurants will also feature the full menu of its world famous DQ treats, including the signature Blizzard® Treats, MooLatté Frozen Coffee Flavored Beverages, soft-serve cones with the signature curl on top, sundaes and DQCakes.

“Our goal is to be the most desirable QSR (Quick Service Restaurant) company in Korea that believes in the vision of people, product and process,” said John Park of M2G USA Investment, a partner in the ownership of Taco Bell restaurants in Korea and in the U.S. “DQ is one of the most respected, exceptional and popular brands in the world. We are thrilled to partner with the DQ system here in Korea.”

The DQ system has more than 6,700 locations with more than 2,200 of those units operating outside of the United States.

For more information on Dairy Queen’s world-wide plans, read a Mazor’sEdge special report on Dairy Queen.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

New MiTek Lab is “Quantum Leap” in Capability

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Heat Pipe Technology (HPT), a division of Berkshire Hathaway’s MiTek Industries, has opened a new laboratory at its Tampa location, expanding its ability to research, develop, and test new products, while expediting the time-to-market for such products.

With 3,800 square feet of new testing and research space, HPT now has the capability to test to the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) Standard 1060. Indeed, HPT’s facilities are comparable to those offered by Intertek (AHRI’s official test agency) for Energy Recovery Ventilator (ERV) testing. Although HPT’s products may still be subject to the third-party AHRI testing and approval process, HPT can now pre-test its products to AHRI standards. This not only dramatically compresses the product development cycle-time, it also opens up more time and capability for HPT personnel to create new product innovations.

Situated on-premises, the new state-of-the-art HPT lab is fully equipped to support heat pipes testing up to 16 feet in length. With a robust automation and data-acquisition system, this facility offers the capability to run tests overnight and on weekends without human oversight.

“This new lab is a quantum leap in capability for HPT,” said HPT’s Dr. Onieluan Tamunobere, a resident scientist and engineer. “Our capability to innovate has been expanded, and our time to move innovations from concept to market has been compressed to a fraction of what it was before we had the lab.”

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Hot Phoenix Area to See Blizzard of New Dairy Queen Outlets

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Add Phoenix, Arizona to the list of cities that will have an expanded presence for Dairy Queen. Five new DQ Grill & Chill restaurants are planned for the Phoenix metro area.

Locations already opening in the West Valley, and Surprise and Goodyear will be opening by the end of December.

The emphasis on the Phoenix area comes as the city of Surprise ranked number five on a list of fastest growing cities in the United States.

Additional locations will be opening their doors in 2017, including Laveen, which will open in January, and two restaurants in Chandler in March and October.

Other locations are planned in Tempe, Gilbert, Scottsdale, Mesa and Glendale.

All the new Dairy Queen’s will be franchises, in keeping with Dairy Queen’s strategy to avoid company-owned stores. The chain has only three company-owned locations among its over 6,000 locations worldwide.

Other cities and states that have seen the “Fan Food” and frozen treats chain announce big expansion plans include Massachusetts, South Carolina, California, as well as Upstate New York, Chicago, and Knoxville, Tennessee.

For more information on Dairy Queen’s world-wide plans, read a Mazor’sEdge special report on Dairy Queen.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

M&M Manufacturing Snaps Up Snappy Company

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Berkshire Hathaway’s MiTek Industries, Inc., through its subsidiary, M&M Manufacturing, has acquired Snappy Company, a leading supplier of metal duct systems for the residential HVAC market.

Snappy has manufacturing facilities in Detroit Lakes, MN; Medina, NY; and corporate offices in Marietta, GA.

According to MiTek, Snappy will complement M&M Manufacturing, a leading producer of sheet metal products, primarily servicing the air distribution and ventilation markets. M&M Manufacturing will invest in Snappy’s manufacturing capabilities, expertise, and infrastructure.

“We are excited to welcome Snappy in the family of MiTek companies,” stated Tom Manenti, Chairman and CEO of MiTek. “The experience and relationships of Snappy and M&M will be leveraged across all of our manufacturing platforms in order to expand capacity and customer service levels. Combining the manufacturing capacities of M&M Manufacturing and Snappy will allow both companies to better serve our customers and grow in the markets we serve together.”

“Snappy has been a market leader for more than 60 years,” added Rob Felton, President of M&M Manufacturing, “and Snappy’s reputation has been built on a heritage of great customer service, product innovation, and a focus on people. That’s a perfect fit for M&M Manufacturing, and we look forward to leveraging each others’ expertise and capabilities.”

Snappy is a leading supplier of metal pipe and fittings for the residential HVAC market, and the company is recognized for remarkable innovation, quality products, and impeccable service. Since 1955, Snappy has been a trusted resource to HVAC distributors and contractors. With a full line of components that fit together seamlessly and are safe for end users, the company manufactures approximately 4,000 SKUs of galvanized pipe, duct and fittings, as well as complementary accessories, including drain pans, aluminum and venting products.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Sonoco Products Company Creating Packaging Facility to Support Duracell

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Sonoco Products Company, a global provider of packaging products and services, is investing $20 million in a new packaging center that will provide packaging services for Berkshire Hathaway’s battery manufacturer, Duracell.

Sonoco’s Display and Packaging unit will be located in Duracell’s new leased facility in the Atlanta area. Sonoco will install and operate state-of-the-art primary packaging equipment at the new center and provide all packaging materials. In addition, the Company will produce retail merchandising displays which will also be packed out at the same facility.

“This unprecedented go-to-market packaging solution for Duracell is unlike any effort provided in our industry,” said Jack Sanders, Sonoco president and chief executive officer. “Because Sonoco is a solutions company which offers multiple packaging products and services, we are able to meet all of Duracell’s unique packaging and retail merchandising needs.”

Full production is expected in the fourth quarter of 2018. Sonoco’s sales of packaging and services annualized over the five-year contract period are expected to be more than $50 million.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.