TYPE OF BUSINESS :
Accessory Furniture Manufacturer - A prime turnaround candidate with excellent profit potential.
LOCATION:
DFW Area – Client base nationwide.
LIST PRICE :
$250,000, or investment opportunities of $50,000 or above.
TERMS:
The list price is $250,000 cash.
LEGAL ORGANIZATION:
C Corporation
Year End is December 31
IRS Business Code: 337000
BUSINESS ACTIVITY:
Manufactures, Designs and Distributes Accent Furniture and Decorative Accessories for the home and bath. This 17-year-old company designs, manufactures, paints and distributes accent furniture and decorative accessories for the home and bath. The product line includes over 250 items including: Accent Tables (25-30 designs), Bath & Linen products (30-35 designs), Baskets, Bookcases, Candleholders, Chests and Coffee Tables, Writing Desks, Entrance Tables, Etageres, Magazine Racks, Mirrors, Pet products, Planters, Side Tables (20 designs), Plant Stands, Sinks, Tole Cachpots, Trays, Umbrella Stands, Wall Pedestals, and Wastebaskets. Products are made of Wood, Iron and Tole. All pieces can be customized by painting any of the 20 designs on the 14 stocked or custom colors available. The company sells primarily to retail gift, boutique department and furniture stores, catalog and mail order companies, and especially interior and contract designers.
KEY STRENGTHS:
- The company has a loyal customer base and, despite market challenges, has been able to maintain solid sales during a post September 11 market.
- The proprietary products are well established in the market.
- The Company has the highest reputation for service and quality of products.
KEY WEAKNESSES:
- The company is undercapitalized and as a result is struggling to compete in the international marketplace.
- It has a higher than average cost of goods sold ratio (54%) due to the inability to achieve economies of scale. Large domestic companies are well below that figure (35%) and international companies are far below that figure (at 15%) when they utilize foreign manufacturing resources.
MARKETING STRATEGY:
The company has an excellent product catalog and Internet website. They attend 2 of several possible industry trade shows. They have show rooms in New York, North Carolina and Dallas. Otherwise there is limited marketing effort.
HISTORY:
The company has been owned and operated for 17 years by the two present owners. It was incorporated in 1994.
DAYS AND HOURS:
Monday – Friday 8:00am to 5:00pm.
SALES AND COST DATA:
All information has been provided by the sellers and agreed to their federal tax returns.
| Fiscal Year Ending | Actual Gross Revenue |
Actual Cost of Goods |
Actual Gross Profit |
2004 |
526,169 |
265,012 |
261,157 |
2003 |
729,178 |
382,600 |
346,578 |
2002 |
656,470 |
301,492 |
354,978 |
2001 |
799,394 |
375,972 |
423,422 |
ASSETS AND LIABILITIES:
- The sale will include all inventory, warehouse fixtures, and office furniture.
- The present owners will retain all accounts receivable and all liabilities identified at closing.
- The buyers will have all intangible rights to proprietary company designs.
- The buyers will have all rights to the current client lists, the company phone number, and website
REASON FOR SALE:
As stated previously in the Key Weaknesses section, the company is currently under capitalized. The owners realize that there is excellent potential for growth and profit but not within their present financial structure.
This business is an excellent acquisition for a company already in the industry and one that would be able to bring the business into their existing facility. The prospective buyer will realize their greatest success by offering a low cost alternative using existing designs and models through international manufacturing and importing. The company has had many requests for low cost alternative but has not been able to fulfill them. The prospective buy will also be able to lower cost of goods sold through economies of scale.
Proforma financial statements with 15% Cost of Goods
| Fiscal Year Ending | Actual Gross Revenue |
Proforma at 15% Cost of Goods |
Proforma Gross Profit |
2004 |
526,169 |
78,925 |
447,244 |
2003 |
729,178 |
109,377 |
619,801 |
2002 |
656,470 |
98,470 |
558,000 |
2001 |
799,394 |
119,909 |
679,485 |
CONTACT INFORMATION:
To apply, download the pdf Application Form and fax it to us with a recent Financial Statement. You can fill out the form within Acrobat Reader and then print the completed form.
Please call us at 214.803.3355 for a fax number.
Klay E. Rogers, CPA
Phone: 214-803-3355
Email: KlayCPA@comcast.net