# TLC Customer Concentration Risk Analysis
**Date:** March 26, 2026 | **Data Source:** Epicor Customer Sales By Month Roll (as of 3/18/2026)

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## Executive Summary

TLC has **1,004 active customers** generating ~$7.2M in trailing 12-month sales. Customer concentration is moderate at **44.9% from the top 25** — down from what was likely 50%+ in 2024. However, the real risk isn't concentration itself — it's the **systemic decline across nearly every major account**.

**The headline:** Your top 15 customers lost a combined **$1.8M in sales** year-over-year. Not one of them grew. This isn't a customer problem — it's likely a market contraction signal for LBI construction activity.

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## Top 25 Customer Concentration

| Metric | Value |
|---|---|
| Total active customers (2025 sales > $0) | 1,004 |
| Top 25 customers — 2025 sales | $3,233,677 |
| All customers — 2025 sales | $7,196,585 |
| **Top 25 concentration** | **44.9%** |
| Top 10 concentration | 26.7% |
| #1 customer (Callan & Moeller) share | 8.8% |

**Assessment:** 44.9% concentration in top 25 is *acceptable* for a regional lumber yard. The Callan & Moeller dependency at 8.8% is the only single-customer risk worth watching.

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## 🚨 Critical: The Decliner Problem

Almost every major account is down 35-60% year-over-year. This is the biggest operational risk on the board.

### Top 15 Declining Accounts (2025 vs Prior Year)

| Customer | 2025 Sales | Prior Year | $ Lost | % Change |
|---|---|---|---|---|
| **Callan & Moeller** | $630,881 | $1,221,701 | **-$590,820** | -48.4% |
| Tiber Co. | $148,527 | $340,655 | -$192,128 | -56.4% |
| Bartlett & Sons | $227,607 | $416,183 | -$188,576 | -45.3% |
| Handyman Gio | $154,174 | $309,591 | -$155,417 | -50.2% |
| Johnson Darling | $103,268 | $249,770 | -$146,502 | -58.7% |
| Andev Corp | $87,661 | $234,069 | -$146,408 | -62.5% |
| Maina Enterprises | $113,380 | $223,932 | -$110,552 | -49.4% |
| Gotcha Covered | $116,763 | $215,860 | -$99,097 | -45.9% |
| John T Harquist | $86,780 | $176,319 | -$89,538 | -50.8% |
| Danko Brett | $85,247 | $174,229 | -$88,982 | -51.1% |
| North End Property Mgt | $150,051 | $230,061 | -$80,010 | -34.8% |
| KHE Construction | $70,440 | $148,847 | -$78,407 | -52.7% |
| Reynolds Landscaping | $50,835 | $125,555 | -$74,720 | -59.5% |
| Preferred Paint Customer | $87,476 | $157,268 | -$69,792 | -44.4% |
| Wibco Construction | $89,303 | $158,218 | -$68,915 | -43.6% |
| **TOTAL LOST** | | | **-$1,785,864** | |

That's **$1.8M in evaporated revenue** from just 15 accounts. Given TLC did $16.5M in 2025, this represents a **10.8% headwind** from top account erosion alone.

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## 2026 Q1 Early Warning System

Some accounts are recovering in 2026, others are falling further. Here's the Q1 pace vs Q1 2025:

### ✅ Recovering (Q1 2026 ahead of Q1 2025 pace)
| Customer | Q1 2026 | Q1 2025 | Pace |
|---|---|---|---|
| **John T Harquist** | $105,202 | $22,146 | **+375%** 🔥 |
| **Danko Brett** | $21,042 | $6,367 | +230.5% |
| Tiber Co. | $38,773 | $23,113 | +67.8% |
| Handyman Gio | $65,608 | $39,660 | +65.4% |
| Bartlett & Sons | $65,245 | $41,795 | +56.1% |
| Callan & Moeller | $146,627 | $124,451 | +17.8% |
| Preferred Paint | $15,946 | $13,637 | +16.9% |

### 🚨 Falling Further (Q1 2026 behind Q1 2025 pace)
| Customer | Q1 2026 | Q1 2025 | Pace |
|---|---|---|---|
| **Lake Custom Builders** | $76 | $1,685 | **-95.5%** ⚠️ |
| **Joe Hartley Construction** | $5,900 | $94,618 | **-93.8%** ⚠️ |
| Denning Enterprise | $3,055 | $11,670 | -73.8% |
| G.K. Construction | $11,250 | $33,155 | -66.1% |
| William D. Hodgson | $11,541 | $34,206 | -66.3% |
| JS Pro Construction | $6,528 | $17,009 | -61.6% |
| North End Property Mgt | $16,984 | $37,505 | -54.7% |
| Johnson Darling | $35,745 | $47,051 | -24.0% |

**⚠️ Joe Hartley Construction** is the biggest red flag — went from $94.6K in Q1 2025 to $5.9K in Q1 2026. This was a $207K/year account. Neal or Denise should be calling them THIS WEEK.

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## Risk Assessment

### What's Really Happening

The uniform ~50% decline across almost all major contractors suggests this isn't about TLC losing accounts to competitors — it's likely:

1. **LBI construction cycle cooling** — post-Sandy rebuilds and renovation wave may be tapering
2. **Interest rate impact** — higher rates slowing new construction starts and renovation financing
3. **Project completion** — major builds wrapping up without comparable replacements in pipeline

### Key Risks
- **Single large project dependency** — Callan & Moeller at $631K suggests one or two large projects drove their volume. When those wrap, what replaces them?
- **No growing accounts** — Zero customers with >$5K in prior year showed meaningful growth. The pipeline isn't refilling.
- **Seasonal window approaching** — March-August is the residential margin opportunity. If these contractors don't ramp, 2026 could be significantly worse than 2025.

### Recommended Actions

1. **Neal/Denise Priority Call List (This Week):**
   - Joe Hartley Construction (down 93.8% Q1 pace — what happened?)
   - Lake Custom Builders (down 95.5% Q1 pace)
   - Johnson Darling (still declining, was $250K account)
   - G.K. Construction (down 66.1%)

2. **Strategic Accounts to Protect (Monthly Check-ins):**
   - Callan & Moeller ($631K → recovering but fragile)
   - Bartlett & Sons ($228K → recovering nicely)
   - Handyman Gio ($154K → strong Q1 recovery)

3. **New Account Development:**
   - 2025 data shows essentially zero new major account acquisition
   - Outside sales must prospect beyond existing base — Amon, Pagnotta targets need acceleration
   - Consider a "win-back" campaign for dormant accounts

4. **Pricing Strategy:**
   - With volume declining, margin preservation is critical
   - March-August seasonal window: hold pricing discipline on residential walk-ins
   - Do NOT chase contractor volume with aggressive discounts — that's a death spiral

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*Analysis by Rob Lobster 🦞 | Source: Epicor Customer Sales By Month Roll 3/18/2026*