ATTENTION................................................................................................ 2
NOTE TO READER ...................................................................................... 2
EXECUTIVE SUMMARY .............................................................................. 3
BACKGROUND ........................................................................................... 3
COMMUNITY AND MARKET ...................................................................... 4
THE OPPORTUNITY .................................................................................... 6
LOCATION AND FACILITIES ........................................................................ 6
OPERATIONS ............................................................................................. 7
HUMAN RESOURCES ................................................................................. 7
FINANCIALS AND COSTS ............................................................................ 8
INVENTORY ............................................................................................... 8
EQUIPMENT .............................................................................................. 9
SUPPORTING DOCUMENTATION ............................................................ 10
COMPANY DATA...................................................................................... 10
CONTACT DATA ....................................................................................... 10
APPENDIX A ............................................................................................. 11
British Columbia and Vancouver Island ......................................................... 11
Vancouver Island ........................................................................................... 11
ATTENTION
This material is composed of valuable information owned by Modern Doors
and Hardware Ltd., herein known as the Company. Modern Doors will allow
you to review this material only on the understanding that subsequent use of
the material for your own account, or subsequent disclosure of the information
by you to any third party whatsoever without Modern Doors’ prior expressed
authorization, is strictly prohibited. This material may not be reproduced
without permission.
By accepting the delivery of this document the recipient agrees to keep the
information herein confidential, and to return this document upon the request
of Modern Doors.
NOTE TO READER
This is not a securities offering. This document is intended to present the
opportunities and viability of the business.
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EXECUTIVE SUMMARY
Having operated in the Comox Valley for over 20 years, Modern Doors &
Hardware Ltd. has established an exemplary reputation. The company
provides conventional and custom doors to the new construction, commercial,
institutional and retrofits markets. The Company’s services also include the
provision and installation of quality door hardware, including electronic keyless
entry systems, as well as the servicing of the commercial/institutional doors.
Modern Doors and Hardware Ltd. is offered for sale at $400,000.
BACKGROUND
Modern Doors has developed a solid reputation for reliable product and quality
installation, and has become the principal supplier to a number of quality home
constructors in the area.
The company provides mounted doors (encased) from spec to custom, at rates
that are competitive with other suppliers. Having a precision door (milling)
machine that cuts out the placement for hinges and passage sets, the company
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is able to mount doors in frames that meet the specifications of the contractor
or home owner. Doors may also be retrofitted to existing frames in renovation
projects.
Modern Doors purchases from commercial suppliers of stock door blanks (such
as JELD-WEN, BC Doors, and Richardson) and specialty door equipment
manufacturers (such as EMTEK and Schlage). A complete suppliers’ list will be
provided upon completion of a sales agreement.
Commercial and institutional building owners rely on Modern Doors to provide
equipment and service, while competition in the residential sector is primarily
from the large building supply firms (Home Depot, Windsor Plywood, and
Home Hardware). Although offering the same product and hardware to the
home construction market, Modern Doors is known for quality craftsmanship
and superior customer service.
Modern Doors has operated from the same location for over 15 years, and is
well known and respected in the commercial and residential construction
community. The owners who are about to retire, are placing this successful
operating business up for sale.
COMMUNITY AND MARKET
The Comox Valley is located on the East Coastal plain of Vancouver Island. The
Comox Valley encompasses over 100,000 acres of arable land, moderate
marine climate and well established air, water and highway transportation
corridors. The area is serviced with hydroelectric power generated on
Vancouver Island and augmented with underwater hydro electric transmission
services from mainland British Columbia. Natural gas comes to Vancouver
Island by way of an underwater gas service that was installed in the early
1990s. The major urban centres, Courtenay, Comox and Cumberland are fully
serviced with municipal water and sewer, BC Hydro electricity and Fortis
natural gas.
The Comox Valley is served by 5 commercial airlines. Since 1999, the Valley has
benefited from the WestJet Service to Calgary and Edmonton. Two flights per
day to and from each of the Alberta cities bring business passengers to
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Vancouver Island. Comox Valley real estate is promoted to these passengers
and their purchases of Island real estate over the past 12+ years have fueled
the home construction sector. There is no indication that this market is
saturated.
Comox Valley was settled in 1862. Since the early settlers arrived, the Valley
has seen a steady increase in population. The early economy was dominated
by coal mining, agriculture, fishing and forestry. In recent years, the presence
of the military at CFB Comox, the agriculture processing industry, the shellfish
sector and four-season tourism has become the primary economic drivers. This
is augmented by destination urban retail centres (box stores like Costco, Home
Depot, Wal-Mart and Real Canadian Superstore) that draw extra-regional
shoppers to the area.
Statistics Canada notes the population of the Comox Valley Regional District as
63,538 in the 2011 Census. This is a growth of 6.8% from the 2006 census
which noted 59,482. Private dwellings also increased substantially from 27,885
in 2006 to 30,156 in 2011. BC Stats predicts population growth in this area to
be between 26% and 35% between 2011 and 2036.
Service infrastructure provided throughout the Comox Regional District will
enable moderate growth to continue.
The new home construction industry has been relatively stable in the Comox
Valley. The development of the Crown Isle Estates and Aberdeen Heights
subdivisions, among others, has provided ongoing opportunities for
homebuilders.
Modern Doors, being in the construction sector, has benefited from the steady
economic climate in the area. While the construction industry is cyclical, the
peaks and valleys have not been overly pronounced in the past decade.
Modern Doors has served the construction sector in the Comox Valley for over
20 years, building a reputation for quality product and excellent customer
service. The principals work cooperatively with other door shops in the area
and the owners and managers, at times assist one another on large projects or
when added expertise is required.
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THE OPPORTUNITY
Modern Doors offers a solid business opportunity in a dependable growing
market. The owner is prepared to stay on with a new owner providing
introduction to key suppliers and clients and insights to best practices of the
business, supporting a seamless ownership transition.
There are opportunities to expand the business by offering windows and
window installation as a supplementary service to the door component.
Additionally, the overhead door market is under-serviced in the Comox Valley
as is the commercial and institutional door service market.
These
opportunities represent untapped potential that would realize greater
revenues and profit without significant additional overhead costs. As well,
exposure of the business would be enhanced by an on-line presence, or at least
at minimum - a business card web-site.
Modern Doors is offered for sale at $400,000. The owner is prepared to discuss
options that will benefit both parties.
LOCATION AND FACILITIES
Modern Doors is located at 2040 Guthrie Road, Comox, BC, in a 3,800 square
foot leased facility which is transferrable to a new owner. The location is well
situated to serve the rapidly growing subdivisions including Crown Isle and
Aberdeen Heights. The business is easily accessible for building contractors
working throughout the valley.
The facility was custom built for the business and has a well-appointed display
and sales area that showcases the custom products and high-end electronic
hardware. The attached manufacturing and warehousing area is laid out for
convenience and efficiency.
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OPERATIONS
Modern Doors operates the sales and display portion of the business Monday
to Saturday 7:00 AM to 5:00 PM. Door manufacturing and installation occurs
between 8:00 AM and 4:30 PM, Monday to Friday.
HUMAN RESOURCES
One full time employee works in the retail and shop area. There are two parttime employees that include an office worker and a versatile assistant that can
help where needed. Installation is sub-contracted out, but could be done inhouse. The addition of an outside sales representative would benefit the
business.
The business model regarding human resources is not currently suited to a
family-run model and would require some changes should that become the
case. There is currently a custom contract installer in place, as the owner
concentrates on the manufacturing end. This allows the operation to save
money by using the installer only for the jobs on the go. With that said, this
model is suitable and stable. The current crew has been with Modern Doors
for over 5 years.
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The Principal is prepared to continue with the company until the new owner is
fully trained. There may be a need to replace part-time employees once the
new owner is in place.
FINANCIALS AND COSTS
The company has achieved average annual sales of over $600,000 per year for
the past 3 years, with a gross margin of approximately 67%. Net adjusted
income, is approximately 22.5% of sales, thus providing an attractive return on
investment.
Common average annual operational costs:
Accounting
Insurance
Licenses
Office Supplies
Shop Supplies
Telephone / Yellow Pages
Telephone
Utilities
Facility Rent
$ 1,600
$ 3,600
$
260
$ 4,000
$ 3,500
$ 5,000
$ 5,000
$ 3,200
$ 49,726
Detailed financial information for the past 3 years created by the company
accountant will be made available to qualified buyers.
INVENTORY
Inventory of door stock-in-hand as of February 29th, 2012 is approximately
$45,000. Another $12,000 is found in hardware. Displays and decorative
touches are an additional $12,000. Inventory is not included in the asking
price. A full inventory list along with a description of the types of inventory in
hand will be provided when requested.
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EQUIPMENT
The equipment, which is all in good working condition, is included in the sale
price. Approximate replacement at current market value is $135,000.
2 Door machines
Forklift
Panel Table Saw
Hand Tools
Drill Press
Sander/Shaper
Band Saw
Jointer
2 Air Compressors
Air Tools and Equipment
Dust Collection System
Door and Frame Jigs
Computer Equipment/POS
Point-of-Sale
Shop Vehicle (Dodge Ram Truck)
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SUPPORTING DOCUMENTATION
Based on the last 3 years of financial statements, the business has been valued
using the income approach method and normalizing the income and expense
sheet. The document is available from the Owner at his discretion.
COMPANY DATA
LOCATION ADDRESS
2040 Guthrie Road
Comox, BC
V9M 3P6
CONTACT DATA
CONTACT
David Jones
(250) 339-1877
[email protected]
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APPENDIX A
British Columbia and Vancouver Island
British Columbia (B.C. or BC) is the westernmost of Canada's provinces and is
known for its natural beauty. Its name was chosen by Queen Victoria in 1858.
In 1871, it became the sixth province of Canada. There are 10 provinces in
Canada.
As well as being the westernmost province of Western Canada, British
Columbia is also a component of the Pacific Northwest, along with the US
states of Oregon and Washington. The province has strong cultural and
personal ties to the Prairie Provinces and Ontario as well as to the West Coast
of the United States and to Alaska and the Yukon.
The capital of British Columbia is Victoria, the 15th largest metropolitan region
in Canada, named for Canada's Queen at Confederation. The largest city is
Vancouver, the third-largest metropolitan area in Canada, the largest in
Western Canada, and the second largest in the Pacific Northwest. In 2009,
British Columbia had an estimated population of 4,419,974 (about two and a
half million of whom were in Greater Vancouver).
British Columbia's economy is largely resource-based. It is the endpoint of
transcontinental highways and railways and the site of major Pacific ports,
which enable international trade. Less than five percent of its land is arable; the
province is agriculturally rich (particularly in the Fraser and Okanagan Valleys)
because of its mild weather. Its climate encourages outdoor recreation and
tourism, though its economic mainstay has long been resource extraction,
principally logging and mining.
Vancouver Island
Vancouver Island is a large island in British Columbia, Canada. It is one of
several North American locations named after George Vancouver, the British
Royal Navy officer who explored the Pacific Northwest coast of North America
between 1791 and 1794. While the city of Vancouver is located on the North
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American mainland, Victoria, the capital of British Columbia, is located on the
island.
The island is 460 kilometers (290 mi) in length and 80 kilometers (50 mi) in
width at its widest point. At 32,134 km2 (12,407 sq mi), Vancouver Island is the
largest Pacific island east of New Zealand, the largest island on the western side
of North America, the world's 43rd largest island, Canada's 11th largest island,
and Canada's second most populous island after the Island of Montreal. The
Canada 2011 Census population is 759,366. Nearly half of these (344,630) live
in Greater Victoria. Other notable cities and towns on Vancouver Island include
Nanaimo, Port Alberni, Parksville, Courtenay, and Campbell River.
Further information is available upon request.
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