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Asphalt and Paint Paving the Road to Profitability for Junior Services Contractor
By: AllPennyStocks.com News
February 7, 2012
With roughly 15,000 companies traded publicly on U.S. exchanges, investors certainly aren’t limited in picking companies in virtually any sector. Small and micro-cap investors have far and away the vast majority to choose from with more than 10,000 companies falling into the “penny stock” category, typically referenced as a stock carrying a price tag under $5. Within certain industries, though, there are always some developmental companies that are well-positioned due to high levels of fragmentation within the industry that allow for rapid growth potential.
Fireman’s Contractors, Inc. (OTCBB:FRCN), a Fort Worth, Texas-based full-service contractor providing professional services for commercial and government clients, falls into a highly fragmented sector with its current offerings. The company currently offers a wide array of services related to interior and exterior painting, road improvements, pavement maintenance, seal coating, parking lot striping, pavement marking, asphalt maintenance and repair, and ADA compliance. The painting industry alone is a $20 billion annual industry that is growing at about a 3 percent clip each year, but is made up primarily of very small companies with less than five employees or large companies with more than 200 employees. This leaves plenty of room for Fireman’s Contractors to start grabbing market share as a burgeoning firm.
Incorporated in 2009, the company went public through a direct public offering of 20 million shares and began trading on the OTCBB in September 2011. The balance sheet leading into 2012 is not the type that is going to knock anyone’s socks off, but the company is not burying itself in debt either, as so many juniors do. Co-founded by a former firefighter, Aaron Gilmore, the company seems to be employing a “built from the ground-up” approach (no pavement pun intended) to keep expenses in check and maintain core values associated with firefighting professionals. Revenue from operations and the initial offering have provided enough operating capital to build upon.
According to the video on the company’s website, clients already have included Tyson (NYSE:TSN), JC Penney (NYSE:JCP), government agencies and universities such at Southern Methodist University in Texas.
Today, Fireman’s Contractors reported the signing of a commercial contract with Riverbend Properties, a premier business park comprised of 32 buildings and 1.5 million square feet of office space in East Fort Worth, Texas. After recently completing onsite pavement maintenance for Riverbend, the company has now been selected for additional parking lot maintenance for the service park. "The Riverbend contract further solidifies our strategic initiative to expand Fireman's professional services for commercial and government clients. We're glad to have the opportunity to expand our scope of work with Riverbend Properties,” said Renee Gilmore, CEO of FRCN.
Fireman’s Contractors’ business model sets itself apart in several ways. First off, its initiatives to brand and license the name for franchises could expedite growth outside of the Texas region in the mid-term. The company is showing a commitment to this effort by recently joining the International Franchise Association and partnering with the Veteran Transition Franchise Initiative (VetFran) to bolster growth and offer opportunities for franchises in small business ownership to veterans returning home after serving our country. “We will be targeting small, ‘Mom & Pop’ type of organizations for franchises in our paving and parking lot maintenance business,” said Danielle O'Neal, Chief Marketing Officer and Executive VP at Fireman’s Contractors, in a phone interview with AllPennyStocks.com. “It is our grass roots and how we got this business off the ground. We intend to stay within that business model initially.”
Secondly, the company is donating one percent of its net profits to firefighter associations, which will be used to the benefit of local communities. Similar to DigitalTown, Inc.’s (OTCQB:DGTW) announcement yesterday of the commencement of a revenue-sharing program with local schools, corporate motivations driven to help important parts of society that are languishing because of lack of funding is a breath of fresh air from publicly-traded companies.
Fireman’s Contractors’ share price is sitting just above its low since it began trading. At only 8 cents a share, a market cap of less than $6 million and cash left from the initial offering, the corporate growth strategies appear to be taking shape leaving a considerable upside for FRCN. As a company with around 15 employees that’s building a solid reputation, they fall into a niche in a massive industry that makes them attractive to clients, foreseeably allowing them to start taking a bigger chunk of the market as they begin to leverage franchises to further generate revenue. Proper due diligence is, as always, encouraged.
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