With a solid business plan in place and a relatively stable market demand for their product, Gayle Lackey and her husband, Richard, acquired the assets of St. Louis Blow Pipe and merged the company with Lackey Sheet Metal. The couple thought they could revive the struggling firm in a snap.
The truth of the matter is that they could – and did. The 115-year-old company, purchased four years ago and since renamed Lackey Sheet Metal/St. Louis Blow Pipe, had lost $400,000 the year before the Lackeys bought it. With the right financial partner and product mix, the St. Louis-based outfit has consistently beat industry sales expectations and continues to succeed in the marketplace.
“We had the opportunity to purchase the company and turn it around,” said Gayle Lackey, president of Lackey Sheet Metal, who worked as a consultant in the computer industry prior to purchasing the company. “Had we not enlisted the help of Bibby Financial Services, however, we would not be serving the industries the firm exists to support.”
Bibby, a financial services firm specializing in receivables funding, purchase order financing and other lines of credit, provides the Lackeys the necessary capital they need to operate – and thrive.
Indeed, for some of the commercial and industrial projects for which Lackey Sheet Metal provides special alloy ducts and other work, the company must part with upwards of $300,000 for the HVAC (heating, ventilation and air conditioning) system. “We need to pay for the large rooftop units and pay the steel manufacturers quickly,” said Lackey. “We might not see payment from our contractors for three to six months, however, as that’s how the industry works.”
Banks will not provide such extensive lines of credit to companies that have recently become profitable or are in a rapid growth phase, as they are considered volatile. “Purchasing only one of the HVAC units we often need would probably exhaust the line of credit from a bank,” said Lackey.
Bibby works with Lackey and its other clients to determine the creditworthiness of its contractors and then extends an appropriate line of credit to the company. Lackey attributes the company’s ability to secure necessary financing to the quality of her partners and Bibby’s flexibility. And for the business partners that are slow to pay Lackey, Bibby also aids in collections.
Lackey’s background is not in finance, but she familiarizes herself with the various financial solutions with the help of Bibby’s professional sales force. “It was our former banker who introduced us to Bibby as potential business partners”.
“From the very beginning, Bibby knew and understood our business needs,” she continued. “It was refreshing because as soon as we started working with Bibby, we began handling more of the jobs we’re designed to take.”
The business plan the Lackeys developed more than four years ago has proven to be feasible and fruitful, and the company continues to do commercial, architectural and industrial work covering stainless duct work, welding, coping, guttering, fascia, panels, siding and more.
And Lackey Sheet Metal is one of the few certified female-owned sub-contractors that both fabricates and installs. “With Bibby Financial on our side, we are confident we can take our business to the next level,” said Lackey.
The special partnership has helped Lackey Sheet Metal achieve what most bankers don’t estimate is possible: complete turnaround and profitability in under three years. “It was in the first year of our partnership with Bibby that we turned a profit,” said Lackey. “We’ve recently re-signed a contract with Bibby Financial Services and have moved to an accounts receivable line of credit, which is a sign of our success and growth.”
Bibby Financial Services is also growing, helping companies like Lackey Sheet Metal meet their financial obligations.