Sheridan Equipment Combines Excavating Machinery and Truck Equipment Sales

June 1, 1998
SHERIDAN Equipment makes truck equipment sales as an offshoot of the company's main business - heavy equipment sales. Truck equipment is sold as a service

SHERIDAN Equipment makes truck equipment sales as an offshoot of the company's main business - heavy equipment sales. Truck equipment is sold as a service to Sheridan's heavy equipment customers in addition to landscape/property contractors.

Sheridan's truck, municipal, and environmental division sells truck equipment manufactured primarily in the United States, says Ed James of Sheridan Equipment near Toronto in Mississauga, Ontario, Canada. In its truck equipment division, Sheridan sells large quantities and a wide variety of snow and ice control equipment.

The company is the largest Meyer distributor in Canada and each winter sells 650 Meyer and Diamond snowplows, James says. About 80% of the snowplows are sold and installed by Sheridan's 11 branches in Ontario and independent sub-distributors network. Sheridan installs one-third of the snowplows in its 10,000-sq-ft shop in Mississauga.

Sheridan is relocating the light truck equipment shop on site into the 20,000-sq-ft former heavy equipment shop because of the company's rapid growth. A 20,000-sq-ft addition for heavy equipment will make Sheridan's shop space total 50,000 square feet.

Sheridan is a master distributor for Diamond and Meyer snowplows, James says. Sheridan distributes several products manufactured by Monroe's Snow and Ice Control division including snowplows, heavy-duty underbody scrapers in lengths up to 12 feet, V-box-style material spreaders for pickup trucks, and the Performer material spreaders for medium- and heavy-duty trucks.

Moldboards on the underbody scrapers are made of heat-treated carbon steel one inch thick and 20 inches high. The heavy-duty underbody scrapers are hydraulically operated and are well-suited for use on municipal trucks.

During the winter, Monroe's underbody scrapers remove hard packed snow and ice from roadways during high-speed plowing, James says. During warm seasons, the scrapers can maintain gravel roads and berms.

Building Truck Bodies. Sheridan builds about 200 landscaper and special-purpose truck bodies each year used by property and utilities contractors, James says. Meyer tailgate spreaders, as well as Monroe replacement tailgate spreaders for salt and sand, are mounted on the rear of the landscaper bodies.

Landscape contractors service their customers during the entire year, which includes snow removal in the winter, James says. Most of the landscaper bodies are built for Class 4 and Class 5 trucks such as the new Ford Super Duty cab chassis.

The landscaper bodies are eight feet wide and eight, nine, or 10 feet long depending on the cab-to-axle dimension of the truck chassis, James says. One side of the landscaper body is hinged to drop down for easy access when manual handling of cargo is desirable.

To further expand its truck equipment market, in early 1997, Sheridan purchased the factory outlets in southern Ontario of Case Power of Racine, Wisconsin.

Customers who purchase Case skid steers and rubber-tired backhoes are likely to purchase truck equipment, James says. Case customers often are small contractors with one-ton pickups or chassis that pull utility trailers to transport machinery.

The pickups and chassis usually are equipped with truck bodies and equipment that Sheridan installs, James says. The company sells other truck equipment besides truck bodies, snowplows, and material spreaders. Sheridan is the largest truck equipment distributor in Canada for Delta Consolidated toolboxes.

Even though Sheridan is expanding its market for truck equipment, those sales account for only 10% of the company's total dollar volume. Sales of heavy construction equipment represent a greater portion of Sheridan's total revenue.

"But profit margins on truck equipment are substantially higher than for construction equipment," James says. "Inventory turns for truck equipment are also higher. It takes a year to turn construction equipment inventory."

Truck Equipment Profits On heavy construction equipment, the profit margins are in the 10% range, James says. The profit margin is up to 35% on retail truck equipment sales.

The heavy equipment line sold by Sheridan includes crawlers, loaders, and excavators manufactured by Hitachi, Volvo, and Case. Smaller landscaping equipment includes the Case skid steers, tractors, backhoes, and Volvo compact articulated wheel loaders.

A series of acquisitions and expansions have contributed to Sheridan's growth, James says. The company expanded several times at its 14-acre location near the Lester B Pearson airport in Toronto.

To finance further company growth, Sheridan's parent company, STRONGCO Inc, made an initial public offering of company shares on the Toronto and Montreal stock exchanges in 1994, James says. Strongco's annual sales revenue grew from $190 million (Canadian) in 1994 to $451 million in 1997.

James offered a historical perspective on Sheridan Equipment's growth. Over the years, the consolidation of several equipment-distribution companies led to the formation of Sheridan Equipment.

Marmac Hydraulics was formed in 1965 by Herb Sparrow and Herb Brown which eventually became Sheridan Truck & Environmental Equipment, James says. At the same time, a competitor, Wheels, Brakes and Equipment, opened in Hamilton, Ontario, where Ed James was a principal shareholder and sales manager.

Marmac first opened as the H E Brown Supply Company Ltd in North Bay, Ontario, which is about 270 miles north of Toronto. H E Brown later incorporated its Toronto operation as Marmac Hydraulics in order to expand its truck equipment business throughout southern Ontario. Company Expansion.

At Meyer Products in Cleveland, Ohio, Tom Meyer, along with Canadians Brown and Sparrow, decided to establish Marmac Hydraulics as a master distributor in Toronto of Meyer snow and ice control equipment for light- and medium-duty trucks. Subsequently, Wheels, Brakes and Equipment became a sub-distributor for Marmac, which grew from $1 million in sales in 1965 to $13 million in gross sales from 1965 through the mid-1980s.

Marmac's expansion was accomplished through direct fleet sales and its sub-distributor network, James says. In the mid-1980s, Marmac was purchased by Strong Equipment Corporation (STRONGCO Inc) of Toronto.

Dwight Tremblay began working for Marmac while studying marine biology at the University of Toronto. At the university, Tremblay met and married Sparrow's daughter. Then in 1972, Ed James met Dwight while working as an equipment salesman for Marmac.

Dwight is now the vice-president and general manager of Sheridan Equipment's Central Division. Sheridan has other sales regions but currently sells truck equipment only in Ontario (Central Division).

In 1991, Strong Equipment Corporation (which primarily sells heavy construction, mining, and forestry equipment) acquired Sheridan Equipment. Marmac then became an operating unit of Sheridan Equipment and was renamed Sheridan Truck & Environmental Group.

About the Author

Mark Nutter