Seaside Materials, Inc.
Seaside Materials turns tide on profitability

Growing pains can be brutal, especially when it comes to your business.

Anthony and Frances Damiano know only too well. In 1990, the couple started Seaside Materials, a masonry and stone supply company, with 22 years industry experience and ardent determination. Under their hands-on leadership, the Monmouth County establishment has expanded at an astonishing pace, becoming one of Central New Jersey’s largest distributors of interlocking concrete pavers while catering to an upscale clientele that extends as far north as Manhattan and south as Atlantic City. Sales have surged annually along with its product line that encompasses a diverse range of raw materials, stone countertops and finished architectural accents.

Ironically, this very success created unexpected challenges.

The Damianos were referred to Bartolomei Pucciarelli, a Lawrenceville-based CPA and business advisory firm, about three years ago by their portfolio investment advisor. At the time, Seaside Materials had severed ties with several accounting firms, all reputable but none broadly equipped to guide their thriving organization. Despite robust sales, the company was on the verge of financial distress. According to Anthony Damiano, “We were feeding the giant and clearly in danger of growing ourselves right out of business.”

“For Seaside Materials, it was not just about filing a tax return, but bringing the operation under control and building a profitable business,” explained Michael S. Pucciarelli, CPA, principal, Bartolomei Pucciarelli.

When Bartolomei Pucciarelli first came on board, Seaside Materials was squeezed by cash flow problems and pursuing a sizeable line of credit to keep them afloat. Mike Pucciarelli convinced them to put those plans on hold, getting their company back on its feet rather than crippling itself with debt. Their work began with an in-depth evaluation of the entire operation. “You can’t just look at total sales, you have to drill down to identify strengths, weaknesses, threats and opportunities,” explained Pucciarelli.

The diagnostic revealed compelling obstacles hindering the company’s viability. While their sales were climbing steadily, their inventory, overhead and accounts receivables were also increasing, ultimately stifling their profits and leading to a cash shortfall. “When those areas are not managed properly, a company can grow themselves out of business,” stated Pucciarelli.

One of the most dramatic improvements resulted from a detailed product analysis that highlighted how one of the company’s core products, concrete block, represented 35 percent of the company’s total sales but yielded little profit. Adjustments in pricing and bulk purchasing from a different manufacturer nearly tripled the block’s profit margin within one year. “That really opened our eyes,” asserted Damiano.

Seaside Materials assessed and restructured costs associated with each of its products, learning how to better manage and streamline an inventory containing well over 3,000 items supplied by nearly 200 vendors.

With assistance from Bartolomei Pucciarelli, the company also instituted more effective and aggressive procedures and systems for accounts receivable, reducing the average payment on outstanding invoices from about 70 days to 47 days. Furthermore, they trimmed overhead expenses and increased assets to posture the company for healthy growth.

“Bartolomei Pucciarelli taught us how to be more accountable to ourselves, to really understand the inner workings of our business and make more intelligent decisions on everything from bookkeeping to inventory control,” stated Damiano. Over the past two years, Seaside Materials has doubled in size and revenue while almost doubling its gross profit margin. “We’re not just growing bigger, we’re growing stronger.”

Recently, Seaside Materials secured its first line of credit and obtained a term loan to build a stone gallery that will expand its customer base and generate additional revenue. “They’re using credit wisely and fostering a solid banking relationship,” noted Pucciarelli. Bartolomei Pucciarelli also facilitated the company’s partnership with a professional marketing firm to develop a cohesive communications plan for promoting this exciting new initiative.

“We are experiencing a level of success and profitability that astounds us,” added Damiano. “There’s no doubt in our minds that we wouldn’t be here without Mike’s guidance.”