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Custom Trailer Manufacturing & Fabrication with 24% Profit Margin

Average sale size is $52k per trailer!

CASH FLOW
$124,517

Specifications

  • Price
    $420,000

  • Revenue
    $509,232

  • Cash Flow
    $124,517

  • Multiplier
    3.40

  • Profit Margin
    24%

  • Down Payment
    15%

  • Employees
    4: 1 owner, 2 FT welders/fabricators, 1 FT office/shop assistant

  • Service Area
    Southern Saskatchewan, Canada

  • Location
    Regina, Saskatchewan (205km away)

The average sale size for this custom trailer manufacturing business is $52,500 per trailer! Boasting a 24% profit margin in 2020, this custom trailer fabrication company serves a wide variety of clients, including rural municipalities, farming communities, road-pavers, and gravel haulers. Operating out of an 18k sq. ft. facility in Southern Saskatchewan, the highly skilled team does custom trailer engineering and fabrication,  along with trailer maintenance, refurbishing, and supplying fabricated replacement parts. Trailers include gravel, belly dump, clam shell, flat decks, and more, each with a variety of dimensions that can be customized. Refurbishing work consists of sandblasting, painting, and general welding repairs, and the company also supplies fabricated replacement parts such as stoppers, fifth wheel replacements, air cylinders, and tarps. Included in purchase price is over $313,354 worth of assets, including equipment such as band saws, jigs, a forklift, hoists, a payloader, welders, a shearer, an iron worker, a hydraulic press, trailer rotisserie stands, bench grinders, a paint system, and a Caterpillar 950 Payloader.

 

Sales are conducted by two dealers in Canada and the owner, with most sales being done over the phone and no travel. Personnel includes four experienced employees: 1 owner, 2 full-time welders/fabricators, and 1 full-time office/shop assistant. The current owner oversees operations, conducts some sales, and assists in the shop when needed.

 

The ability to customize dimensions for various trailer styles sets this business apart from competitors. Opportunities for growth include expanding the current website and social media presence to attract a wider range of customers. There is also an opportunity to take advantage of a more streamlined process through the Alberta government; instead of doing a bid system, the business could get on a short list to be approved to provide services/products on request. Priced at $420,000 and nearly 75% collateralized, a buyer can expect a 113% return on investment in the first year after debt payments.

Business Highlights

  • Year Established: 1965
  • Location: Regina, Saskatchewan (205km away)
  • Service Area: Southern Saskatchewan, Canada   
  • Services: Custom trailer fabrication, trailer painting
  • Clients: Rural municipalities, farming communities, road-pavers, gravel haulers
  • Building: 60x300 ft. located on 22 acres of land; shop, office space
  • Reason for Selling: Retirement planning, pursuing other (non-competitive) interests
  • Personnel: 4: 1 owner, 2 FT welders/fabricators, 1 FT office/shop assistant
  • Seller Training Period: 6-12 months 
  • Growth Opportunities: Expand website & social media presence
  • Current Owner’s Responsibilities: Oversees operations, some sales, and assists in the shop when needed

Financial Highlights

  • List Price: $420,000 CAD

  • 2020 Cash Flow: $124,517
  • A/R: $7,498

*amounts may vary

Profit Margins

Cash Flow Analysis

Description of Financial StatementP&L Statement
Nov. 2019-Oct. 2020
P&L StatementP&L StatementP&L StatementP&L StatementNotes
20202019201820172016
GROSS SALES$509,232$616,039$1,160,169$810,352$1,093,263
Net Income Shown on Financial Statement$20,670$9,274$-22,155$-42,116$-35,512
ADDBACKS
Compensation to Owner$84,000$76,622$82,500$70,751$88,260
Amortization$0$14,000$17,711$22,562$18,394
Interest$18,617$15,854$16,289$15,999$18,505
Non-Business Telephone$1,080$1,080$1,080$1,080$1,080$90/month
Donations$150$0$0$0$0
TOTAL ADDBACKS$103,847$107,556$117,580$110,392$126,239
Seller's Cash Flow = Total Addbacks + Net Income$124,517$116,830$95,425$68,276$90,727
Profit Margin24.45 %18.96 %8.23 %8.43 %8.30 %
2020 Profit Margin: 24%

Clients

  • Rural Municipalities
  • Farming Communities
  • Paving Companies
  • Gravel Haulers

Services

  • Fabrication of custom trailer parts
  • Assembly of trailers
  • Painting of trailers
  • Ability to customize trailer dimensions to fit specific needs

Personnel

4: 1 owner, 2 FT welders/fabricators, 1 FT office/shop assistant

  • 1 Owner: oversees operations, some sales, and assists in shop
  • 1 office/shop assistant: does accounting/office services, assists as welder in shop when needed
  • 2 welders/fabricators: create custom trailer parts and assemble trailers

Growth Opportunities

  • Expand website and social media presence

Valuation Details

Funding Example

Purchase Price:

$420,000

$
%
OR
$
%
OR
$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

Funding Details

Business:

Offer Price: $

% Buyer Cash Down at Closing: $

% Seller Carry Back via Promissory Note: $

year term at a rate of %

% of Purchase Price secured by Buyer and Seller

Total Bank Loan Need: $

% of Purchase Price

Desired Loan Type:

Desired Bank Terms: year term at a rate of %

Total Business Assets, Inventory, and A/R: $

Total Undercollateralized Loan: $

Loan Payments

Monthly Payment to Bank: $
Yearly Payment to Bank: $
Monthly Payment to Seller: $
Yearly Payment to Seller: $
Total Monthly Debt Service: $
Total Yearly Debt Service: $

Conclusions

Fixed Charge Coverage Ratio

The bank will require a minimum ratio of 1.5 to be lendable.

Cash Flow:
2020 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2020 Cash Flow
$
Annual Debt Service: -$
NOI:

Buyer's Return on Investment (ROI)

The rate of return on the Buyer's down payment.

Down Payment: $
NOI:
ROI: %

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210 N 78th St. 2nd Floor
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The Firm is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.