Gayle Lackey and her husband, Richard, established a solid business plan and developed a stable demand for their product, then acquired the assets of St. Louis Blow Pipe. The couple merged the company with their Lackey Sheet Metal (www.lackeysheetmetal.com) company and within a few short years revived the struggling St. Louis Blow Pipe.
St. Louis Blow Pipe, now known as Lackey Sheet Metal/St. Louis Blow Pipe, was a 115-year-old company that had lost $400,000 the year before the Lackeys purchased it. However, 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.
The Lackey’s financial partner was Bibby Financial Services (www.bibbyusa.com), a financial services firm specializing in receivables funding, purchase order financing and other lines of credit for small and mediumsized enterprises across a wide range of industry sectors. The company purchases over $5 billion of receivables from more than 6,000 businesses worldwide via a global network of 24 autonomous operating companies in the United States, Canada, Australia and throughout Europe.
The business plan the Lackey’s 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 the company is one of the few femaleowned sub-contractors that both fabricates and installs.
The partnership with Bibby has helped Lackey Sheet Metal achieve what most bankers don’t estimate as possible – complete turnaround and profitability in less than three years.
“It was in our first year with Bibby that we turned a profit,” said Gayle Lackey. “We’ve recently re-signed a contract with Bibby and have moved to an assetlending program, which is a sign of our success and growth.”
Lackey Sheet Metal relies on Bibby for the capital it needs to operate and thrive. 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 HVAC systems. “We need to pay for the large rooftop units and pay the steel manufacturers quickly,” explained Lackey. “We might not see payment from our customers for three to six months, but 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 often considered volatile. According to Lackey, purchasing one of the HVAC units it often needs would probably exhaust the line of credit from a bank.
Bibby works with Lackey to determine the credit worthiness 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 those business partners that are slow to pay, Bibby aids in collections.
