Financing structured for $12M CEC expansion

Cutting Edge Countertops (CEC), a Perrysburg-based countertop fabrication company, completed a $12 million-plus expansion project at its Perrysburg headquarters to provide additional capacity required for its anticipated business growth over the coming years in response to an increased demand for its products and services.

CEC received a 504 loan from the Small Business Administration (SBA) through the Toledo-Lucas County Port Authority in partnership with the company’s bank – First Federal Bank – which was used for the build out of the real estate ($8 million) and all of the company’s new equipment ($4 million).

Financing

According to Brian Burns, one of the company’s principals, the long-term fixed financing offered in the 504 program gave CEC a lot of stability in the unpredictable world of business and real estate.

“Without the financing, the project would probably never have gotten off the ground. It was an aggressive project quadrupling the size of our building in Perrysburg and the SBA backing allowed First Federal Bank to offer very competitive rates and terms for the rest of the project, which included a portion of the real estate and financing for all the new equipment,” said Burns.

Brian noted that the Port Authority was instrumental as the conduit to the SBA in making sure the proper steps were taken, as the Port Authority came out and discussed the business plan that the financing was being used for. In addition, the Port Authority collaborated with First Federal Bank to make sure that it came up with a package that worked for all parties.

“First Federal Bank has been an amazing partner of ours since 2017. They want to grow with their clients and wanted to grow with us. Being a mid-sized bank allows direct communication with local decision-makers and gives it a small town feel. First Federal financed 40% of the real estate expansion and 90% of the new equipment that was purchased for the new plant. We were at a point where we couldn’t stop production long enough to move the old equipment, so with their financing, we were able to replace all the old equipment with new and start fresh,” said Burns.

When speaking of any guidance that Burns would offer to other small businesses considering financing, he said, “Don’t go strictly for the best deal with rates that are presented to you. There are a lot banks out there that lend money. The key is to find a bank that aligns with your company’s goals and objectives. Size, risk tolerance, decision-making process, industry experience, relationships, the account representative, etc., all go into making an all-inclusive decision,” said Brian.

Aerial view of Cutting Edge Countertop's expanded facility

History

CEC began its operations in 2006, led by founders Brad Burns, Brian Burns, and Jeff Erickson, all of whom are all still active in the business today. According to Brian, the mission was to create a countertop company that delivered on quality products with exceptional customer service.

“All the owners come from family-owned business backgrounds. Brad and I grew up working at Burns Electric in Tiffin, which was started by our grandfather in 1964. The evolution of a small electrical store grew into a full-service supplier of lighting, appliances, cabinets, countertops, and flooring with a small construction arm,” said Brian Burns. “When we began struggling with quality and service from several countertop suppliers in 2004, the idea of getting into the countertop business was born. Jeff also was part of a family-owned business with his father at Erickson Glass and Stone. He brought the manufacturing experience to the startup along with deep-rooted relationships to get the business out of the starting blocks quickly.”

According to Brian, Perrysburg was selected for the company’s headquarters based on the availability of a large facility, as well as the logistical benefit of being able to move in all geographical directions.

“Logistically, our Perrysburg location near expressways going north, south, east, and west allows us to reach a large area with the company’s in-house fleet of box trucks, flatbed trucks, and tractor trailer semi-trucks. Our measure and installation team are strategically placed in each region to provide local services to those communities and customers,” said Brian.

In 2012, CEC expanded into the Michigan market with its first satellite service center in Brighton. In 2016, the business expanded through the acquisition of a company based out of Macomb, Michigan that had operations in Wixom, Michigan, as well as Noblesville and Indianapolis, Indiana. After completing its large expansion project in Perrysburg in 2018, CEC closed the Macomb facility and opened a new showroom in Troy, Michigan. Over the years, according to Brian, Cutting Edge Countertops has continued to bring its dedication to quality and customer service to more customers.

CEC services a wide variety of customers, including builders, kitchen and bath dealers, designers, commercial contractors, big box retailers, and retail customers, among others out of its five showrooms. The company is a full-service countertop provider able to handle everything from the slab selection process from its large slab showrooms to the final installation and everything in between.

CEC has approximately 180 employees with about 140 working in Ohio, 20 in Michigan, and 20 in Indiana.

Expansion and growth

CEC completed the expansion project at its Perrysburg headquarters in 2018, with Rudolph Libbe Inc. serving as the design/build contractor and Rudolph Libbe Group’s SiteLine services helping CEC evaluate expansion options.

The project entailed a new 71,400-square-foot Varco Pruden pre-engineered metal building addition, which increased CEC’s existing 24,000 square foot Perrysburg facility to more than 95,000 square feet, quadrupling its operation space. In addition to expanding production, the business also increased the company’s workforce by approximately 20%, allowing CEC to support growth in its existing locations across the states of Ohio, Michigan, and Indiana, as well as new markets in the future.

The expansion included a two-story office with high-end finishes; manufacturing, warehousing, and shipping and receiving areas with 10 top-running bridge cranes ranging from one to five tons, and 1,000 feet of trench drain in the manufacturing area.

In addition, machinery and equipment was also purchased to outfit the facility, including two CMS North America custom Brembana cutting lines featuring semi-automatic shuttle tables, a 16-inch cutting blade, and a 5-axis waterjet head. The space also houses five 4-axis CNC router machines, material handling systems from Bohl Engineered Handling Systems, and high-capacity water filtration systems from Water Treatment Solutions.

“This is an exciting time for our company,” said Brad during a previous interview with Toledo Business Journal. “We’ve experienced rapid growth in the last few years and this expansion is a necessary part of our long-term strategy for ensuring that our business can continue to prosper and create high-quality countertops for years to come. Having this project literally in our backyard is so rewarding.”

CEC also consolidated its hard surface products into the expanded Perrysburg facility, which continues to serve as the company’s headquarters where warehousing, manufacturing, and logistics operations have been centralized. This, according to Brian, has ensured the company’s value proposition of safety, quality, and service are uniform across all state lines for its customers.

“Our company believes the safety, quality, and experience we provide our employees and our customers are the number one priorities for our business,” said Erickson. “Due to the growth of our operations and business, we expanded into a completely new state-of-the-art facility in Perrysburg that allows us to uphold our service promise, centralize efforts, and create efficiencies that will help put our employees and our customers first.”

“We are at the center of an economy that is driving our business in a positive way and requires us to look for efficiencies during a time where demand and supply are both high,” added Erickson. “Our customer base is strong and will continue developing, but in order to remain competitive during a thriving economy, we are setting a stage for our business to be operationally savvy for the next few decades.”

“The loyalty of our employees and customers are what continue to motivate us to keep getting better. We will never stop improving on the fundamentals of high quality and exceptional customer service that have made Cutting Edge Countertops an industry leader. We look forward to what the future brings and will continue to grow as new challenges and opportunities arise,” said Brian.

Article edited August 26, 2019 with updated total investment figure