For those who follow PDGE, there was a nice post by tomrox98 over on the iHub board:
Other Comments
I am a contractor and was sitting in a job meeting yesterday.
The project is a remodel of a state mental health facility.
The mold remediation contractor (not PDGE) was going on about his progress and my ears perked up. After the meeting I cornered him and asked if he had heard of PDGE. His eyes lit up and he said ohhhhhh yes.
Basically,
PDGE used to have a Chicago office but it was closed a few years back. This guy has some dealings with them and said that PDGE was a pleasure to work with in all regards. They were very well organized, and stayed on top of all of the details inherent in the construction / services industry. Most important, they were fair and up front in their business dealings. Bills were paid on time when submitted, without a bunch of hassles. Everybody knew what was expected of them at all times. The jobs ran smoothly, and PDGE would get their hands in a lot of things. Mold removal, asbestos removal, demolition, even some big window jobs. This guy was very sad to see them close the office. Perhaps the way things are done in Chicago was too much to deal with. (Yes, it is enough to drive you absolutely crazy) But the long and short of it is that Corporate wants decent margins. (40%) If the magic isn't happening they will make a few personnel changes and if necessary exit a market. Corporate really insists on acceptable margins.
I like this strategy a lot. Try new things, and if it works, go for it. If it doesn't...move on. If a particular market is too competitive (on price) or has too many players, get out. You won't know until you try. Through tight controls and solid corporate support, good things in many branches will happen company wide.
As I review the facts surrounding PDGE, most compelling are:
The company has figured out how to make $ recently.
Backlog is solid.
We are converting better than ever. Notice the spike in sales and very flat corporate overhead as a % of sales.
We cover most of the nation, and can capture some national accounts.
The industry trends are very favorable. IT IS MUCH LESS COSTLY TO REMOVE THE MOLD THAN TO LOSE A TENANT OR LITIGATE.
Most people are terribly afraid of mold because they don't fully understand it. They DO know that it is bad. (kind of like cancer. cancer is never good, always bad)
This is a good business to be in all things considered. I imagine that purchasing liability insurance is a real wild card, but every business has that wild card. For some of us it is the cost of steel, for airlines it is the cost of jet fuel.
I like this industry, and PDGE in particular.
I am ok with acquisitions, but would much rather prefer that they buy a proven winner than a turnaround story. The turnaround stories are very difficult and take years to complete. The "hairy" operators usually get a lot "hairier" as problems are uncovered.
Further cause for excitement surrounds how this company will perform once the stuggling offices get their act together. The potential will be amazing.
Also, the T&M portion of PDGE's business is high, and growing.
This is the gravy work, people. It is hard for me to describe this type of work other than to say that performance (speed and quality) is more important than price.
In my business, I have had the $100,000 contracts make $65,000 gross profit, and the $700,000 ones make $5,000 gross profit. You've got to do your best at balancing the 2 types of work and making sure your bids on the big ones are carefully prepared.
One final key point is...if the backlog of work is rising in the offices that are doing well....look out. much better times ahead. :)
Tom
