Description

The Company is a well-established metals trader that has developed a solid network of product sources (purchasing from over 8,000 machine shops and scrap traders), and sells materials to companies involved in diverse manufacturing activities as well as to other metals recyclers. Over the last 12 months, the Company has also begun to deal in high temperature alloys (such as high speed steel, inconel, and molybdenum).
In addition to dealing in scrap metal, the Company sells new cutting tools, both as a dealer / distributor as well as on a consignment basis (from machine shops with excess stock).
The Company has built a solid reputation in its niche market, and is known for its ability to source quality products in a timely fashion and for its overall technical knowledge related to cutting tools.

* Industry Knowledge and Contacts: The Company has significant industry knowledge related to its product lines, and in particular about cutting tools. As a result, the Company has developed extensive industry contacts that ensure a steady supply of product for its customer base.
* Increasing Revenue: Over the historical period, revenue increased from $3.2 million to $3.8 million, or 9.4% per year on average.
* Rising Gross Profit Trend: From 2012 to 2014, gross margins increased from 12.5% to 14.6% as management focused on diversifying into higher margin products and changed its transaction practices (moved away from large volume – low margin sales).

Posted Jul 7, 2015

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