Indianapolis - Electronic systems
contractors (ESCs) who are CEDIA members enjoyed 13 percent revenue growth and rising
profit margins in 2010 despite the depressed market for new home construction,
CEDIA's annual benchmarking survey
The responding companies also
expect their revenues to grow in 2011.
Average revenues for a responding
company hit $1.32 million in 2010, up 13 percent, with installers expecting
2011 gross revenues to increase on average by 15 percent to $1.52 million. In
2010, most of the ESC's revenues again came from retrofit and remodeling
installs, both of which accounted for an average of 63 percent of gross revenue
Average net profit margin rose to
4.1 percent in 2010 from 3.5 percent in 2009, though the average margin is still
below 2007's 6.8 percent.
For 2011, the respondents expect
the number of jobs they do to increase from 2010, when the median number of
projects for ESC companies was 41, and they expect that number to grow to a
median 51 in 2011. The average 2010 project size was $32,000.
A stepped-up marketing effort was
the reason cited most often by installers for their expectations of rising
sales and profits in 2011. After the end of the first quarter of 2011, 93
percent of respondents indicated that they expect to be profitable at the end
Among project types, home
theater/media room installs accounted for a smaller share of respondents' gross
revenues, falling to 17 percent in 2010 from the previous year's 24 percent,
presumably because installers have been diversifying into lighting, security,
energy management, and systems integration. In fact, respondents called
"systems integration/control" their most profitable product category in 2010,
In addition, installers see
themselves offering a variety of products and services (see table) during the
next two years. Seventy-two percent expect to be offering energy-management
products, 24 percent expect to offer smart appliances, 33 percent expect to
offer home health equipment, 49 percent expect to be offering LED lighting, and
18 percent expect to offer alternative energy sources.
Survey results are designed to
help installers evaluate and improve operations, CEDIA said. The results also help
manufacturers, distributors and other companies interested in entering the
business to assess the state of the market. Results include financial
information such as cost of goods sold and operating expenses,
business/operational practices such as job costing and contract types, and
staffing levels and compensation.
For the 2011 survey, 112
companies completed valid survey responses for a response rate of about 8
percent. The companies employ a total of 932 employees. Results are
representative of CEDIA members and reported at a 95 percent confidence level,
The survey was conducted by
research firm Brand Ubiquity. Results are free to respondents and available for
purchase through the CEDIA
for $1,495 for CEDIA members and $2,995 for non-members. A
discount of 35 percent is available on reports pre-ordered before Sept. 11.
Indianapolis - Electronic systems contractors (ESCs) who are CEDIA members enjoyed 13 percent revenue growth and rising profit margins in 2010.