The Company is an economical one-stop shop for customers who can find design, machining, castings, tooling and painting and superior- quality finished products under one roof. The Company served about 90 + active customers over the past three years, most of who are
aerospace and defense OEMs or suppliers to these markets. There are five long-term agreements with key customers. The majority of sales are to U.S.-based companies, with about 5% from customers located in Europe.
The decline in 2016 was an anomaly due to the loss of one major program due to redesign and completion of a large military program accompanying heavy R&D investment in proprietary foam process. Going forward, the sales of foam products are expected to make up nearly 50% of the total product mix in 2018 and 2019. Accordingly, management expects gross margins to be 40% and higher due mainly to the foam sales but also because the casting and machining projects now in the pipeline are once again higher margin jobs.
The facilities are utilizing about 50-60% of their aggregate production capacity, offering an acquirer significant growth potential. In addition, management has identified several privately-held potential acquisition targets in North America that would collectively form a $150 million + business.
One of North America’s premier outdoor furniture brands, the Company designs and manufactures a recognized line of outdoor furniture and accessories. Products are sold through over 530 stores worldwide and on certain websites. The Company is forecasted to grow at a CAGR of 46.8% and outperforms competitors on pricing for high-quality products while delivering superior value to customers and consumers.
The Company owns several proprietary designs and processes and has achieved a high level of operational efficiency by investing in automation and limiting its product line. Virtually all raw materials come from the Company’s own waste, post-industrial waste, and wide-spec and off-spec resins supplied by resin producers. The owner is willing to stay post-transaction to assist with building a new facility to accommodate significant expansion and will work with a new owner on business development.
The Company provides reclaimed-wood products to prominent national client base of businesses, architects, interior design firms, affluent homeowners and upscale building contractors. The Company has served a large number of well-known retail and corporate clients including Starbucks, Wolfgang Puck restaurants, Holiday Inn, Red Lobster, Bass Pro Shops, Cabela’s, Pottery Barn, Winchester, Remington, Oakley Sunglasses and Costa Sunglasses. Retailers utilize reclaimed wood for store interiors, product displays and gifts, as well as other uses. The Company works with customers to define their needs and help with everything from design and selection to engineering and finance.
In 2018, the Company recently completed the world’s largest reclaimed-wood project. Known for the breadth and superior quality of its product offerings, the Company has completed over 4,000 reclaimed-wood projects. All orders undergo a 15-point inspection process as they pass through the plant, resulting in extremely low customer quality exception occurrence. The Company already has experienced identifying and penetrating prime markets for reclaimed-wood products, as was recently achieved in many states beyond its base location.
The Company sells thousands of SKUs to approximately 300 customers globally with very little concentration. Key end-markets are industrial automation (linear slides and ball screws), aerospace, automotive, medical devices and electronics. There are 200 customers in the U.S., 85 in Asia, 10 in Southeast Asia, and others in Mexico, Canada and Europe. While most components are produced from chrome and stainless steel, the Company has vast experience manufacturing tungsten carbide components, titanium components, soft stainless components, copper components, and brass components to meet other demanding applications.
The Company is strategically positioned to significantly expand sales throughout Asia. Its modern manufacturing facility in Asia has approximately 25,000 square feet and is set up to facilitate high volume, efficient processing of precision components in a broad range of materials. In 2017, the Asia plant accounted for 70-75% of total production. The Company is also well underway with initial plans to add a second Asia facility at minimal cost.
The Company is one of the largest stone fabricators in the Southeast and among the top 10 custom stone fabricators in the country. The Company operates a state-of-the-art stone production facility, a custom cabinetry production facility and several showrooms. There is an annual customer base of about 300 commercial and residential builders. In early 2018, management expects to enter into a new contract with a developer that will generate $1.5 million in revenue going forward.