Sector
Niche Manufacturing
Case Study: Repositioning Stone Fabrication & Installation Services
PT worked with large home builders to design numerous residential alternatives for kitchens, baths and entrance choices for end-customer selection in new housing communities. The Company provided all stone needs (marble, granite and engineered stone) to meet the various price points desired by the builder. PT would handle all the sourcing, cutting and installation of materials across the home builders’ inventory of lots as homes were constructed to client choices. Additionally, the Company provided warranty maintenance service required by the state. PT had a small amout of commercial and industrial clients. Revenues drastically decreased during the great recession quickly resulting in large monthly loses The Challenge: The contracts in place with the current home builder customer base resulted in negative margins. The operating cost structure was not profitable at this new volume. The Work: We examined the historical customer upgrade rates and showed the building community why the current end-customer conversion frequency resulted in negative margins. Negotiated new pricing structures across the new design choices post-recession while maintaining the customer warranty repair business. Mapped the operation flow and restructured the business to minimize fixed costs and make the model more variable resulting in positive EBITDA. The Results: The company returned to profitability with strong margins and was successfully sold to a strategic buyer.