The achievements and stealable ideas of 2013’s Big50 class definitely make them notable, but the group’s collective numbers also contain some tales worth telling, both on their own and in comparison with previous Big50 groups.
This year’s Big50 posted average gross margins around 33% and net profits of roughly 9% for 2012. That’s not only the best showing for any Big50 group since 2006, it also knocks the socks off the 26.8% margin and 3% net profit recorded in the latest NAHB Remodelers’ Cost of Doing Business study. Gross profit within the Big50 group ranged from a low of 12.5% to a high of 59.3% and a median (half above, half below) at 32.8%, while the range for net profit was from a negative 1.2% to a robustly positive 25.6%, with a median of 7.3%.
Historically, gross margins for Big50 classes hasn’t varied by more than a percentage point since 2006, but the net profit percentage for 2012 was about half again better than it was during the hard times of 2009.
The rise in revenue per employee from previous years combined with the decline in average number of employees partly reflects the varying composition of each Big50 group. But it also buttresses anecdotal evidence that remodelers’ business has rebounded to the point where many remodelers will increase staff this year.
Revenue amounts for 2012 ranged from $370,376 for No Problem Builders to $65 million for 1-800-Hansons. The latest Big50 class has seven companies with revenue under $1 million, 18 in the $1 million to $2 million category, seven between $2 million and $3 million, eight between $3 million and $5 million, five between $5 million and $10 million, and five above $10 million. The average for the group was nearly $5.4 million, but excluding 1-800-Hansons the average is $4.1 million. (Note: The numbers in the accompanying charts exclude Hansons’ numbers for 2012 as well as those for two $30 million-plus Big50 members for 2009.)
For the 46 Big50 members that reported salaries, the average was $121,635, with a range from $39,000 to $662,796. Roughly half the Big50 executives also paid themselves a bonus. It ranged from as little as $2,000 and as much as $242,875. The average bonus paid was $67,799. Put the salary and bonus together — and in at least two cases, the bonus was the only compensation paid the owner — and the average was $153,291, with a range from $48,982 to $662,796.
As one might expect, the paychecks get bigger as the company gets bigger. The 2013 Big50 firms with revenue under $1 million paid average salary plus bonus of $70,327. For firms between $1 million and $2 million, the average payout was $112,793, and for companies between $2 million and $3 million the reward nudged up to $125,597. Then came bigger leaps: Companies with revenue between $2 million and $5 million paid $224,818, between $5 million and $10 million paid an average of $201,421, and the $10 million-plus businesses paid an average compensation of $343,848. The percentage of revenue devoted to executive compensation was as little as 0.2% and as high as 26.3%.
-Craig Webb is editor of PROSALES, 202.736.3307, firstname.lastname@example.org