Margins & Operations

Net profit $26/stair in 2025. Up from $-2/stair. Breakeven requires >15,800 stairs/year at current economics.

All-in cost per stair rose from $332 (2014) to $506 (2025). Average selling price rose from $288 to $531. The gap is net profit — $26/stair in 2025. 2024 was a loss year (-$2/stair).

Materials COGS % tracks lumber price inflation. Rising materials % compresses net margin even when revenue grows.

Operating cash flow consistently exceeds net income — reflects non-cash charges (depreciation). 2024 net income went negative; cash flow stayed positive.

White oak material costs grew from $224K (3.6% of revenue) in 2018 to $637K (14.1%) in 2025 — a 184% increase. Total materials as % of revenue: 36% → 49%.

Standard box stairs are 71% of production but only 47% of revenue. Specialty and custom products generate disproportionate revenue — and all the profit. Box stairs are at or below breakeven at current pricing.

Straight stair gross margin compressed from 48% (2013) to 18% (2023), partial recovery to 25% (2025). Specialty margins reported at ~65% but overstated — QB uses monthly round-number journal entries, not actual job costing.

0.0% of revenue in T4-T5 band (avg mult 0.44–0.48). 89 customers above 0.50 contribute only 5.6% — limited pricing upside in premium segment.

70% of revenue in the 0.44-0.48 multiplier band (T4-T5). 77 customers above 0.50 account for only 12% of revenue.

Factory is NOT the bottleneck. 25-35% capacity headroom means $3-4M revenue growth possible without capex.

The capacity target is 850 rises/day. When orders rise while production stays flat, the business has a demand problem, not a production problem.