CrossRoads – DD
Rapidly growing Builder of custom outside decks in the greater Spokane, WA area. With forecasted sales of $4 million in 2021, an enviable 20% EBITDA margin, and a formalized management structure that is built on a decentralized model of work crews reporting to a non-owner operations manager, the Company is poised for continued growth in one of the most dynamic housing markets in the United States.
The Company has averaged a 47% growth over the last two years with no end in that growth foreseen. Estimated sales growth in 2021 is expected to be 44 % from sales levels in 2020 with a large majority of this revenue coming from the residential sector. Given the high demand for its services, the Company has been able to expand its operating margin in 2021 at a time when the home construction industry has experienced a great deal of margin pressure due to an increase in raw material from lumber prices and other material used in the industry.
The Company was founded over a decade ago and has developed a reputation within the Spokane region as an honest and forthright company that delivers value to its customers.
The Company attributes its impressive growth to the quality of its work and the skill and respectfulness of its employees, as well as the Company’s image as a clean, responsible, and moral company. Adding to its following in the Spokane market is the Company’s consistent spending on “drive time” radio advertising and social media platforms over the last several years.
The Company installs mostly synthetic wood decks given the significantly better wear and tear of synthetic wood decks compared with natural wood decks, particularly in the Spokane region where decks are exposed to hot summers and cold winters, with the decks often under snow and ice during the winter months. The higher cost of synthetic decks has also narrowed over the last year with higher lumber prices.
The Company has an excellent market Growth Potential. Given the high demand for the Company’s residential product the Company has not ventured into marketing to the commercial sector in the region. This is due in large part to the fact that the Company has not been able to keep pace with the residential demand for its product. In fact, during the COVID pandemic period which has covered most of the last couple of years shown above, the limiting factor for the Company has been finding enough experienced or even entry level labor to allow it to expand its sales further.
Part of the Company’s growth can be attributed to the growth and economic vitality of the greater Spokane area. Per the Spokane City Economic Development Department, the population of Spokane County is 491,000 people, and the Spokane – Coeur d’Alene area has more than 745,000 residents and is ranked 71st among combined metro areas in the nation between Lexington, Kentucky and Syracuse, New York. The housing market in the Spokane region has been one of the fastest growing in the nation over the last couple of years. In fact, Coeur d Alene, ID (25 miles from Spokane), where the Company has a market presence, was recently listed (May 2021) by the Wall Street Journal as the fastest rising home prices in the nation, and Spokane was not far behind at #5 in the nation.
I look forward to staring a conversation. Email me directly at georgiouv@crossroadsbusiness.com, or call me on my Cell#: 949-292-6718.