Henny Penny Corp.’s decision to become an employee-owned company was intended to keep the Eaton-based global restaurant equipment manufacturer in the family, so to speak, allowing the firm to remain privately held and headquartered in Preble County, company officials said.
Founded in 1957, Henny Penny designs and produces commercial grade cooking, holding and display equipment for clients that include KFC, McDonald’s, Wendy’s and Chick-fil-A restaurants.
Last month, the company’s 600 area employees were transported by bus to Eaton High School, where they learned that Henny Penny had become employee-owned through the sale of its stock to a newly formed Employee Stock Ownership Plan.
“It is a wonderful way to be able to share in the success and the long-term commitment to remain privately held,” which the company views as a competitive advantage, Chairman Steve Cobb said.
Henny Penny received “weekly” inquiries about its availability for purchase, Cobb said.
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An ESOP is an employee benefit plan that provides workers with an ownership interest in a company. There are about 10,000 ESOPs in place in the U.S., covering 10.3 million employees, according to the Washington D.C.-based ESOP Association.
Henny Penny’s stock is now owned by a trust account that will hold the shares until an employee retires or goes on disability, when they receive a lump-sum payment. There is no employee contribution for the incremental benefit program, which is offered along with the company’s other retirement savings plans.
The company’s leadership structure, announced in October, remains in place with Cobb as chairman and Rob Connelly as president and chief executive.
Henny Penny has annual sales of about $185 million, with an additional $15 million or more from Wood Stone Corp., a Bellingham, Wash.-based stone hearth cooking equipment manufacturer the company acquired in January 2014.
Cobb said the company has enjoyed decades-long relationships with clients such as KFC, Chick-fil-A and Wendy’s because its equipment is “built to last.”
“If you’re running restaurants all over the world that rely on 16-, 17- and 18-year-olds cooking and handling the equipment and ultimately the food, you want to make sure that the equipment that they’re using is worry-free,” he said.
Nearly half of Henny Penny sales are outside the U.S. through a global independent distribution system.
Henny Penny also employs 60 workers at a facility in Suzhou, China, that manufactures equipment for that market.
“We have the scale to be able to support these customers around the world,” Connelly said.
Officials declined to disclose the number of fryers, holding cabinets, rotisseries, combi ovens and heated merchandise cases the company produces annually.
Cobb’s family had owned Henny Penny for 40 years. His father, Jack Cobb, who was hired in 1959 as the company’s fourth employee and retired in 1996 as president, purchased Henny Penny with another colleague in 1974 after founder Chester Wagner died.
“Family” plays an important role in Henny Penny’s corporate culture. A large wall in the Eaton campus’ manufacturing and engineering building is lined with photos of employees and their families at company events. Office plaques bearing workers’ names read “Family since …” with the year they were hired.
Henny Penny has never laid off a manufacturing employee in its 58-year history. Sixty percent of employees have been with the company for at least a decade, and 30 percent have worked there 20 years or more.
Employees receive an average of 40 hours of training time annually in such areas as job skills, finance and wellness “to invest in our people and help them reach their potential,” Connelly said.
Connelly said the ESOP, effective Dec. 30, 2014, capped an “exciting” year for the company.
Henny Penny started 2014 by acquiring Wood Stone, whose customers include California Pizza Kitchen, Outback Steakhouse, Carrabba’s Italian Grill and Wolfgang Puck restaurants.
The purchase helped balance Henny Penny’s product portfolio, reducing the frying equipment share to 68 percent from 80 percent.
“It wasn’t like we don’t see lots of opportunity in frying, and there will continue to be lots opportunity. We just felt we would be stronger with a broader portfolio,” Connelly said.
In September, Henny Penny announced a $7.5 million expansion to add 44,000 square feet of new office, manufacturing and training space to one of the three buildings at its world headquarters in Eaton. Currently under construction, the addition is scheduled to be completed this summer.
While no new jobs were tied to the expansion, the project is intended to match company growth plans.
Henny Penny has hired an average of 12 workers annually over the last 5 years, officials said.
“We know we are going to continue to invest in our people and our capabilities, and add people as we need them. But our focus really isn’t on adding jobs; it’s on growing and then the jobs that will be needed to support that,” Connelly said.