- Acquisition Based Business Focused on Cabinetry and Countertops for Customers in the Western US.
- Projected Revenues of At Least $24 Million for 2021 Fiscal Year.
- New Acquisitions Expected to Additionally Boost 2022 Fiscal Year Results.
- Planned Up-listing to the NASDAQ Within Next 24 months.
- Grand Opening of New Showroom for Davis Kitchens of Tucson, AZ.
- Hiring of Chief Financial Officer Seasoned in Operating Public Companies and Executing M&A Strategies.
Third Bench Holdings, LLC, formerly New America Energy Corp. (OTC: NECA) contains five subsidiary companies operating as an architectural millwork and dealers in the cabinetry, kitchen and bath areas. NECA offers products in several categories: Residential Cabinets and countertops and commercial millwork throughout the Western U.S. for customers from California to Texas. NECA also provides installation services as a part of its vertical offering. The company provides its products and services through its architectural millwork and retail facilities, currently located in Albuquerque and Las Cruces, New Mexico and Tucson, Arizona.
NECA employs over 160 people and had revenue in excess of $18.8 million in 2020. NECA is on a run rate of about $24.0 million for 2021 and is cash flow positive. These projections have been provided by management and do not include the additional acquisitions that are currently under review.
- Third Bench Makes The FDMC 300 List
On February 10th NECA announced it has been recognized on the Woodworking Network’s Furniture, Displays, Millwork & Cabinets “FDMC” list of North America’s 300 largest woodworking manufacturers, which represents a $62.4 billion industry. With over $24M in revenues in 2021, Third Bench has grown over the past several years to become one of the largest suppliers of residential and commercial cabinetry in North America.
NECA CEO David Fair states, “We have grown significantly over the past two years, both organically and through acquisitions. Given our historical growth rate and trajectory, our goal is to be in the top 100 within the next 18 to 24 months.” David Fair goes on to say, “We are experiencing a historically high demand in the housing sector with most of the metropolitan areas that we service. We are here to provide our customers with quality cabinets and countertops at the highest level of service.”
The FDMC 300 is the woodworking industry’s oldest recognized ranking of the largest North American producers of furniture, cabinetry, architectural millwork, windows/doors, retail fixtures, home organization and other wood-related products. This year marks their 36th annual report.
- Financial Statement Overview
On February 1st NECA issued an announcement regarding the company’s financials which covered the most recent 10K and 10Q statement.
10K Comments:
- NECA year-end financials through the Fiscal Year ending August 31, 2021 only include financial performance for the full year for one of the company’s four operations (OGB Architectural Millwork). Three of the companies were acquired during the fiscal year, and as a result only represent financial performance from the time of acquisition.
Below is a representation of the full year of revenue for each of the operations:
10Q Comments:
- Davis Kitchens was acquired in October 2021 and therefore it was not included in the NECA September financial performance which accounts for about $354,899 in revenue. Full operational revenue from current operations will be reflected in Q2.
- Finance charges are associated with Black Oak ($8,333 monthly) and other bank related charges.
- NECA is in the process of moving all accounts to Chase Bank which will reduce all bank related charges to a flat $300 a month. NECA also anticipates refinancing its debt to a single low-cost lender within the next several months.
- One-time operating expenses
- $100K in professional services in September.
- $38K in a one-time payout of PTO. (NECA has adjusted PTO for all employees as of February 2022).
- $4.4M Interest Expense
- $4.2M of interest is associated with convertible notes. It is important to note that these figures do not represent actual cash interest payment requirements. When convertible notes are issued below market price the difference between the conversion price and the current market price is taken as interest expense with an increase in Additional paid in capital as seen below. NECA does not anticipate issuing any additional Convertible Notes.
- The remaining $177,453 is associated with other NECA debt facilities.
Anticipated Expense Reduction: The 10Q and 10K do not reflect recent expense reductions.
NECA anticipates realizing the full impact of its healthcare premium coverage, PTO and salary reductions will be realized by Q4 22/Q1 23.
NECA anticipates the changes to have the following reduction in annual expenses:
- PTO/Holiday Adjustment $250K
- Salaries Reduction $500K
- Reduction in Healthcare Premium $250K – $500K
- Total Expense Reduction $1.0M – $1.25M
NECA will continue to identify additional expense reduction opportunities. In addition, NECA plans to initiate another price increase across all operations to combat increasing labor and material cost as well as increase its operating profit.
- January Corporate Update
On January 10th NECA issued a letter to shareholders from CEO David Fair with an overall corporate update. The letter included the following:
Dear Valued Shareholders,
We are now shifting our focus to the pipeline of acquisitions we developed in 2021 and now look to execute in 2022. We believe that with the potential targets and organic growth, NECA can more than double its revenue this year and possibly much more.
Over the last few months, NECA has received recurring questions from several shareholders which I have addressed in the outline below.
NECA plans to up-list to the NASDAQ within the next 24 months.
NECA plans to officially complete its name change to Third Bench Holdings, LLC within the next 30-60 days.
NECA has have completed paperwork to make changes to the OTC Markets profile page and we are waiting for the profile to be updated.
NCEA has completed several initiatives to drastically reduce expenses. Below are some of example of reductions in key annual expenses:
Reduction in excessive management employees reduced labor cost by ~$500,000
Normalization of PTO/Holiday reduces expenses by ~$200,000
Health Insurance adjustments reduced expenses by ~$250,000
NCEA continues to reduce expenses through the centralization of key operations and leveraging the size of our organization as we grow operations. We also maintain a pipeline of targets that would be very synergistic, and we believe we can complete at least two targets in 2022.
Regarding the NECA new authorized share count, it is our intention to raise additional funds to support the acquisition of additional synergistic target and supply working capital for the business, all of which will ultimately increase value for all shareholders. Given the current NECA pipeline of business and acquisition target we believe achieving $50M in revenue in 2022 is a conversative estimate.
- Grand Opening of New Showroom for Davis Kitchens of Tucson
On December 13th NECA announced the opening of its new Davis Kitchens showroom in Tucson, Arizona. Davis Kitchens is a long-time regional provider of cabinetry and a sister location to NECA portfolio company Davis Kitchens in Albuquerque, New Mexico. Davis Kitchens is a large provider of residential cabinets and countertops throughout the state of Arizona.
NECA CEO David Fair stated, “The Arizona home builder and remodel market is exploding with growth, and we are excited to be in the middle of it! Our new showroom will be a great representation of Davis Kitchens as a staple of the Arizona cabinet industry for retail and home builder customers.”
Since 1975, Davis Kitchens has been a leading kitchen cabinet distributor in Arizona for both new construction and remodels. Davis Kitchens provides professional cabinet design and installation for kitchen remodels, bathroom remodels, room additions, and new home construction.
Davis Kitchens takes pride in their sales support staff including their highly competent order department, administration and operations group, customer support representatives, and warehouse and delivery personnel. Every Davis Kitchens employee is encouraged to communicate fully and frequently with customers and with each other to assure timely and accurate completion of every job. See more at: https://www.daviskitchens-az.com/
Visit the Davis Kitchen Showroom at: 5355 E Broadway Blvd. Tucson, AZ 85711
- NECA Strengthens Management with Hiring of a Chief Financial Officer
On November 30th NECA announced the expansion of the Company’s finance oversight with the retention of James B Turk as its new Chief Financial Officer effective Nov 8, 2021. James has an extensive career as an executive, operating public companies, and executing M&A strategies.
Mr. Turk stated “I am excited to hit the ground running. The personnel here at Third Bench, LLC and its subsidiaries are incredibly talented. I have enjoyed watching the Company grow as a spectator in a 3rd party professional service provider role. With the team that is in place and a little tailwind behind us as the pandemic recovery strengthens; I see great things coming our way.”
David Fair, NECA CEO, stated, “We are thrilled to add James’ extensive experience and wealth of knowledge to the Third Bench executive team! We have known James as our long-time CPA and believe this a great opportunity to continue to build a strong operating company by including a well-known financial expert like James to the team!”
For more information on Third Bench Holdings (NECA) visit: https://thirdbench.com/
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