Berger Bros Company
Berger Bros Company
Wholly Owned Subsidiary of Berger Holdings Inc.
Sales: $44.6 million (2002)
NAIC: 332322 Sheet Metal Work Manufacturing
Berger Bros Company makes roof drainage products, including gutters and downspouts. The company maintains manufacturing facilities in Pennsylvania, Texas, and Georgia, and uses various techniques and materials (mainly copper, aluminum, steel, and zinc) to fabricate its products. In addition to gutters and downspouts, the company offers a selection of colored trim coils, roof flashings, roof edgings, snow guards, and the accessories needed for a complete roof-drainage system. Overall, more than 2,000 products are available to Berger's growing customer base of roofing distributors and building material centers and the individuals who shop there.
The origins of Berger Bros may be traced to the late 1800s. William H. Berger was born in Milton, Pennsylvania, in 1841. He learned carpentry before enlisting as a private in the Union Army during the Civil War in 1862. After the war, Berger moved to Philadelphia and began his life's work as a builder and contractor. In 1874 he founded William Berger & Company, manufacturers of tinners' and roofers' supplies. He was soon joined in the business by his brother, and the company name was changed to Berger Bros Company.
William Berger's brother died in 1898, after which the business was formally incorporated with William H. Berger as president. The company grew steadily, becoming one of the largest concerns of its kind in the United States. Berger also introduced several new products to the marketplace, including Berger pipe and Berger roof grippers, used in the sheet metal industry. William Berger served as president of the company until his death in 1934.
Berger Bros continued to develop and manufacture roofing products, remaining family-owned until the 1970s. During this time, another company that would figure prominently in the future of Berger Bros was established. Life Care Communities Corporation was established in 1979 as a private company engaged in developing, marketing, and managing residential retirement life-care communities on a fee basis for non-profit ventures. By 1983, the company had begun shifting the scope of its operations to include developing and constructing the Life Care facilities. At this time its name was changed to Inovex Industries Inc.
Late 1980s Bankruptcy and Reorganization
Real change in the course of Berger's business did not occur until the late 1980s. In 1989, the company was acquired by Inovex, by then aiming to exit life-care communities all together. Thus, in 1989 Inovex entered the business of manufacturing and distributing roof drainage supplies, acquiring the stock of Berger Bros, which became an Inovex subsidiary. The following year, Inovex was renamed Berger Holdings, Ltd., a holding company for its major operating subsidiary, Berger Bros Company.
A sluggish economy in the early 1990s caused sales at Berger to slump. However, according to a 1991 story in the Philadelphia Business Journal, Berger's management placed the greatest share of blame for its failing financial health on its lending institution, Meridian Bank. The bank had over the past year cut off funding to Berger and called in its loans, forcing the company to file for protection under Chapter 11 of the Bankruptcy Code. To protect its asset base and ongoing operations, the Feasterville holding company's two subsidiaries—Berger Brothers (roof drainage products), and Graywood Products Co. Inc. (vinyl house siding)—also filed under Chapter 11 in order to reorganize their finances. At the time, based on 1990's revenues, Berger Holdings was the 143rd-largest company in the Philadelphia area, according to the Philadelphia Business Journal.
The company continued to operate during its reorganization period, laying off about 60 of its workforce. By 1993 Berger had modernized and modified its production facilities, machinery and equipment; it had also expanded existing product lines and publicized the quality of its aluminum-based roof drainage products (RDP). A plan for emerging from Chapter 11 was approved in 1993, and by 1994, under the reorganization, Berger had paid off its outstanding loans to Meridian, having been granted a loan by The CIT Group/Credit Finance Inc. Berger Holdings formed a new subsidiary, Berger Financial Corporation, which, in turn, became parent to Berger Bros. The company reported net sales of $15.6 million in 1995.
1996–99: Increased Marketing in a Stronger Economy
Having had new life breathed into it, Berger set about preparing for the future. In early 1996, Berger upgraded its Unix computer operating system, thereby improving order processing and advanced reporting capabilities. Berger manufactured its RDP product line—gutters, downspouts, trim coil, and associated accessories and fittings—at its Feasterville facility. RDP sales were made principally to wholesale distributors for resale directly to roofers and general contractors for repairs and replacements of roof drainage systems, mostly in residential buildings. To manufacture RDP products, Berger bought aluminum, copper, and galvanized and painted steel. The company strictly scrutinized all raw materials and all finished products for quality control based on industry and internal guidelines and standards.
Berger had to compete with both small and large manufacturers and fabricators, primarily in the Northeast/Mid-Atlantic region, its major market. Berger began to implement an advertising and marketing program to expand its business to a more national level. Record sales for fiscal 1996 were $19.75 million, compared to net sales of $11.94 million in 1993.
During February 1997, Berger completed the acquisition of Real-Tool Inc., thus gaining a complete line of commercial snow guards and a line of specialties for protecting and preserving metal roofs. On January 2, 1998, Berger acquired all the assets of Benjamin Obdyke Incorporated, Berger's single largest competitor as a manufacturer of roof drainage and aluminum soffit products. This transaction was beneficial for both companies: Berger became a one-stop source for all roof drainage needs and Obdyke could further expand its offering of quality ventilation and other building products to a national market. The acquisition added approximately $14 million to Berger's revenue base in 1999, mostly from aluminum roof-drainage products. In December 1998, Berger acquired Sheet Metal Manufacturing Co., Inc. of Ridgewood, New York, and Waterbury, Connecticut—a manufacturer of roof drainage products and Berger's second-largest competitor. This Sheet Metal purchase was a major factor for an increase in sales from 1998–99. These acquisitions also Made it possible for Berger to penetrate the New York and New England markets.
Moreover, in an effort to grow the company and support future acquisitions, Berger arranged for additional financing and continued to search for immediately accretive acquisition candidates. The company built a solid infrastructure and increased the human resources needed to support future acquisitions. According to a 2003 article in the Philadelphia Business Journal, "A series of strategic acquisitions" broadened the company's "geographic reach and increased its manufacturing capacity." Berger believed that it had attained and could maintain a dominant position over many of the smaller manufacturers with whom it competed for business.
To assure that the company would always immediately fill special requests from the independent distributors who made up its core client base, President Joseph Weiderman continually bought new equipment and upgraded old equipment (investments ranging from $100,000 to $200,000 and up). This kind of service met with customer approval. By year-end 1999, Berger had expanded its product line to 2,000 individual items and posted higher revenues and income from operations than it had since it began to implement its 1996 acquisition strategy.
Once again, during this time, another company that would figure in Berger's future was planning to expand. United Kingdom-based Euramax International Ltd., a multinational company, completed a plan to establish headquarters in Norcross, Georgia. According to David Smith, president and chief executive officer of the American branch, Euramax International, Inc., Euramax required closer proximity to U.S. investors and capital markets.
2000 and Beyond
In 2000 Berger acquired CopperCraft, Inc., a manufacturer of high-end metal architectural products produced mainly at its suburban Dallas plant and sold directly to either distributors, major builders or general contractors for use in remodeling or renovating ornate sheet metal construction. This purchase gave Berger an internal source of specialty metal architectural products.
The company also completed the acquisition of Walker Metal Products, Inc., a manufacturer of roof drainage products with major business in the Southeast. Berger sold its products throughout the country, originally mostly in the Northeast/Mid-Atlantic region. With the acquisition of CopperCraft and Walker Metal Products, Berger gained greater national exposure in both the Southwest and the Southeast regions.
The company's mission is to manufacture the highest quality products and maintain maximum customer satisfaction through superior service and competitive pricing; promote a team atmosphere where employees will experience challenging and rewarding career opportunities; perform in an ethical and honorable environment while enhancing our employees' and shareholders' return on their investment.
CopperCraft's and Walker Metal's sales contributed approximately $3 million of the $5.8 million increase in 2000 sales. Subsidiary Berger Bros' ongoing marketing efforts to increase its customer base contributed about $2.8 million.
Inclement winter weather and excessively hot and dry summers usually reduced the level of building activity in both the homebuilding and home improvement markets, thereby affecting reductions in the company's sales and profits. On the other hand, the absence of snow and other storms might also lessen the demand for the company's products by alleviating some of the consumer need to replace or repair Berger's roofing products. For example, due to severe weather experienced in Berger's core markets during the first quarter of 2001, sales fell by 8.7 percent, compared to sales for the first quarter of 2000. Nevertheless, because of steady sales from CopperCraft and Walker Metal, and of growth within the existing business, in 2001 net sales peaked at $51.13 million, rising from $45.4 million in 2000.
Over the years, Berger had rebounded successfully from bankruptcy and won investor loyalty through steadily increasing sales. However, during 2002 a mild winter, summer drought and recurring heat waves, a weak economy, rising costs for materials, and increased competition contributed to a 12.8 percent drop of net sales to $44.56 million. Despite these loss factors, President and Chief Executive Officer Weiderman said that year-end net income was the second-best in the company's history. By year-end 2002 Berger had used its strong cash flow to reduce funded debt from $21 million to $13.5 million.
Reorganization, nevertheless, ensued. In October 2003, Berger Holdings and Euramax International Inc., through its subsidiary Amerimax Pennsylvania, agreed to a Plan of Merger. Euramax, a leading producer of aluminum, steel, vinyl and fiber glass products, seemed a likely fit for Berger Bros. When all the transactions were completed on November 17, 2003, Berger Bros Company remained a subsidiary of Berger Holdings Ltd., which became a subsidiary of Euramax International. In the spirit of its intrepid founding family, Berger Bros had weathered enormous change yet remained poised to honor its heritage of "maximum customer satisfaction through superior service and competitive pricing."
Alcoa, Inc.; American Buildings Company; Lamb & Ritchie Co., Inc.; Owens Corning Fiberglass Corporation; Royal-Apex Manufacturing Company; Southeastern Metal Products, Inc.
- William Berger & Company is founded as a manufacturer of roofing materials for builders.
- Company founder William Berger dies.
- Life Care Communities, later known as Inovex, is incorporated.
- Inovex Industries Inc. acquires Berger Bros.
- Inovex changes name to Berger Holdings, Ltd.
- Berger slips into Chapter 11 and reorganizes.
- Berger expands product line, intensifies marketing, begins era of acquisitions and geographic expansion.
- Berger's net sales peak at $51.13 million.
- Euramax International subsidiary Amerimax Pennsylvania merges with Berger Holdings.
Armstrong, Michael W., "Berger Holdings Slips Into Chapter 11," Philadelphia Business Journal, December 16, 1991, p. 1.
"Berger Bros Achieves Milestone 125 Years Supplying Quality Roof Drainage Products," Building and Remodelng News, October 1998, pp. 12–13.
"Berger to Be Bought by Georgia Firm Euramax," Philadelphia Inquirer, October 14, 2003.
"Euramax International, Inc. Completes Acquisition of Berger Holdings, Ltd.," Financial News, November 25, 2003.
Stone, Adam, "Berger Refocuses, Extends Its Geographic Reach," Philadelphia Business Journal, April 28, 2003.
—Gloria A. Lemieux