This week Dixie Lee International Inc., the parent company of the “Dixie Lee” brand name, announced that coverage of their stock had been initiated by Reovest Growth Research. The research analyst gave the company a Speculative Investment Merit rating and stated the stock had a price target between $3.00-4.00 per share. The company currently has 80 Dixie Lee Chicken & Seafood stores open across Canada after beginning to sell franchises in 1988. The report also took into consideration the future endeavor of the company’s concept of the Dixie Lee Diner.
The Reovest Growth Research report read that; “If we utilize a $1.50 price bench mark for the company’s proposed initial round of equity financing, this would increase shares outstanding by 3.3 million shares to a total of 42.43 million. Cash flow generation would be approximately $9 million annually, or $0.21/share. Given an industry multiple average of 43.50 X, and heavily discounting this by 50 – 60%, we believe that a projected P/FCF (price to free cash flow) multiple range of 17 X – 21 X is warranted. Based upon these parameters, the intrinsic value of the company should support a fundamental market price of between $3.65 – $4.55 per share. Execution and timing issues aside, the company is certainly on a fast track internationally, to expand franchise roll outs. Once the USA program gets underway — this company could really fast track and get on some visible radar screens.”
The new President and CEO of Dixie Lee Food Systems, Joe Murano, has brought extensive experience to the team. Murano brings 32 years of business knowledge to Dixie Lee, and has already led the company to gross sales in excess of $60 million. As President of the recently public company, Murano has an aggressive management style and hopes to move to company forward in the upcoming years with help of his management team. Dixie Lee’s management team includes the owner of the company, David Silvester, and Mark Graham, who was at one time selected by McDonalds to open the first McDonalds restaurant in Moscow.
The Dixie Lee brand name started with the opening of the first Dixie Lee Chicken & Seafood restaurant in 1964 in Belleville, Ontario, Canada. Building on an old Louisiana chicken recipe, the Dixie Lee name has grown to include subsidiary and affiliated companies accounting for more than 80 branded restaurants open and more than 20 in development. Dixie Lee restaurant concepts include full service, fast casual and take-out. Dixie Lee is not only growing in North America, but also has locations in Ukraine and now Dubai.
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