Potential Cash Flow
This highly attractive apparel related commissioned manufacturing company is engaged in the wash and dye as well as an additional niche segment of the clothing finishing marketplace – all critical value-add segments of clothing manufacturing that are oftentimes impractical to perform in lower cost locations. Due to the company’s stellar customer service the firm has managed to maintain solid year over year growth. Top line revenues have increased from $6.5 million in 2016 to $7.6 ml. in 2017. They are tracking to $8.2 ml. in 2018. In 2018, the two largest customers were at 30% of total revenues each, however the balance of revenues are spread over an additional 100 satisfied clients. While the percentage of revenues by service offering varies year over year, the revenues from wash and dye are nearly evenly split with other services – which provide a diversified revenue stream and a non-concentrated client base. In fact, less than 2 percent of revenues appear to be derived from clients who utilize both segments of the company’s services!
Accounts Receivable Included in Asking
The operation is managed from a 22,000 square foot facility that leases for $8,500 per month on a lease until May 2019. It has highly coveted water rights as well as the required sanitation / sewer permits to operate as a wash and dye house. All of the necessary furniture, fixtures and equipment will be included in the sale. The book value of the assets is just over $400k, but they likely command a fair market value in the $600k - $700k range.
As the apparel industry has traditionally been Los Angeles’s second largest industry employer after aerospace, there is a fair amount of competition in all aspects of it. With that said, many segments within the manufacturing value-chain have shifted offshore. Wash and dye may be completed offshore if manufacturing occurs abroad, but there is a bustling local wash, dye and finishing industry for those who manufacture, assemble or finish goods in the area. As the company’s financials attest to, while some wash and dye houses have struggled, this company’s diverse service offering and stellar customer service have allowed it to continue to achieve strong and steady year over year growth. With excess capacity and a diversified service offering that customers want, this operation stands out among the competition.
Growth & Expansion
New management may choose to add this operation to an existing wash and dye house, a commissioned fabric service company, a fabric converter, a manufacturer or any other value-added service providers in the apparel value chain. Alternately, with the company’s remarkable growth they focus on the company’s existing specialties. They are currently operating at 60% capacity to growth may be achieved without the need for any major additional capital expense investment. With a capital infusion and the addition of a sales force, however, tremendously bolstered revenues may be possible.
Support & Training
Reason for Selling
Available for $5,250,000