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Monthie Mechanical

Kim M. Monthie - CEO
Dear Barry:
 
As I sit here reviewing my November Financials, I am forced to reflect back to May of this year.  That is when Jeff and I attended your Labor Management Class in Detroit.
 
I recall the level of fear and trepidation felt by everyone in attendance due to the state of the economy, the continued slump in the new housing market, the change in leadership in the White House and the general state of affairs in the world.  We all paid close attention in that class and there was an unspoken commitment to implement the practices you preached as never before. This class was not vender sponsored so the atmosphere was more open and less formal.  I particularly appreciated the opportunity to visit with you in small groups during the evenings where we could talk specifics and look for solutions. 
 
Upon our return, we went about implementing as much as we could humanly put in place.  Jeff took over Production Management (having let the previous manager go) while I de-hired our general ledger accountant, taking back those tasks, including payroll.  This put me closer to "the numbers management".  We began tracking cash flow daily and stayed on top of our receivables.  We added 2 service technicians, re-vamped our maintenance program to a monthly installment and eliminated overtime charges. 
 
With that done, we went into a summer that was record breaking.  Unfortunately, the records broken were for summer months where the temperature never reached 90 degrees.  It hasn't happened in over 100 years.  Then, just to add insult to injury, winter did not arrive until this week.  November was in the 60's and December has been in the 50's.  We have watched one by one as our competitors have had to close their doors, some of them 30 and 40 year old companies.
 
We structured our marketing plan around tax incentives and manufacturer rebates.  We looked under every rock for ways to cut overhead, negotiating every contract, changing suppliers and bidding out all services.
 
We are truly blessed.  I am looking at a 10% increase in sales over 2008 with Jamie selling over $1.5 million to date.  Remember when we needed you to tell him he could sell a million.  Commercial sales are way down and we have decided to eliminate all but replacement work as it comes to us.  Service is only down by 2% but it is more profitable as I did not have the same levels of overtime (by adding the 2 technicians).  My combined Loaded Labor % is just under 12%, my overhead is at 28.7% (under 30% for the first time ever) and I have double digit net profits of 10%. My line of credit is paid off and we were able to bonus our people for tomorrow's Christmas Party.
 
Our "boots" as I call our revenue generators have suffered a shortage of hours due to the weather and even our sales pattern.  Although residential sales have been up, we have actually sold about the same number of jobs, the big difference being that we have had two install crews all year.  The technicians are the ones who have been suffering all fall.  They have manned the phone lines mining for gold in our customer files generating tune-ups and planned maintenance sales and I am glad the phone has started ringing again. For them tension is running high going into the winter months and we will continue to look for ways to generate demand service.  So all is not perfect, but it is good.
 
It is actually so much better than I could have imagined back in May.  You gave us not only the tools with which to combat the negatives but the confidence that we could thrive during a down turn.  Most importantly, you showed us that you cared.  I wanted to take the time to let you know how much you have helped us over the years, with a head butt or a hug, whichever we needed most at the time. Jeff and I have boundless respect and appreciation for you and your staff.  I look forward to our continued participation in your classes and the opportunity to visit. Maybe I'll even take you up on a fishing trip.
 
Here's wishing you and your family the Happiest of Holidays and a Joyous New Year! WAHOO!
 
Kim M. Monthie  
CEO