2023 Wrap-Up What Lies Ahead for 2024
After a great 2023, I thought it might be a good time to talk about our plans for 2024. I’m sure there will be twists and turns along the way, but our goal is to be the best at what we do. We help to keep our communities safe, play a critical role in construction projects, and help our customers keep their buildings and systems functioning. Being the best involves more than just growing over the prior year or beating the budget. As I mentioned on our last quarterly call, we did both of those things in 2023, but many of our competitors performed even better. We lost bids twice as often as won them and our EBITDA margin - a measure of how much value customers place on our services and how well we perform - was 30-50% less than many similar companies in our industry. You may be thinking - if we had such a good year, when is it enough? That’s a fair question to ask, and it definitely took a huge effort from everyone to achieve the results we did. Finding qualified team members has been our single biggest challenge, which is why we quintupled the bonus for referrals! However, there are many reasons for us to continue our efforts to grow. I’ll talk about the role of acquisitions in the next issue, but getting bigger is not just an end in itself. It helps us to fund annual raises, enables us to negotiate better healthcare rates, gives us the latitude to provide corporate services such as Training, and the list goes on. Most of our success in getting better will come from a continued focus on the small things we do every day. Negotiating with vendors to get an extra point or two of margin and making sure our field installers have the right products to get the job done in a timely fashion are just a couple of examples. However, there are three key strategic initiatives that we are going to focus on this year: • Enterprise Accounts is the next evolution of our national account strategy. While in the past we focused on identifying customers with a national footprint to provide primarily D8 products, we now have an entire business development team focused on specific verticals and we are emphasizing the
sale of our full suite of products. This will require the support of our entire branch network as we leverage our unmatched in-house expertise and geographic coverage. It should also be a good source of new business for all of our locations. • Sales Effectiveness is a broad term that essentially means using data to improve our win rate. While we have introduced some tools over the past couple of years, this is no longer optional with our new owners. They require us to provide this information regularly. You’ll see more news about training and feedback opportunities to make sure we are not creating extra work, but this is meant to help you make smarter decisions every day and benefit from the full breadth of opportunities that exist throughout our network of branches. • Pre-Hung is meant to address an end market (multi-family) where we have historically been under-represented. Now that we have in-house experience in manufacturing these products, we should be able to overcome the past limitations that resulted from unreliable vendors. We are investing in more manufacturing capacity to make sure we can service all of our locations and increase our presence in this space. I hope this helps you understand our key goals and initiatives for 2024. These ideas originally came from discussions with many of you, and I appreciate all the input. As you know, we’ve launched our new Elevate program on Connect for other ideas you may have. This is a team effort and everyone must understand what we are trying to accomplish. I encourage you to ask about our strategy when I’m in your branch or feel free to reach out to me directly if you have any questions.
David Eisner Chief Executive Officer
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