M&M Supply Co.

MM Supply picM&M Supply plans to enjoy healthy business in 2017. 

By Alan Dorich

Customers can depend on M&M Supply Co. to come through in a pinch, CEO Randy Trachtenberg says. “Our attitude is we don’t say ‘no,’” he states. “If a customer calls and says, ‘We need a two-inch valve at four o’clock in the afternoon,’ they will have a two-inch valve at 3:55.”

Based in Oklahoma City with corporate ofices in OKC and Duncan, Okla., M&M operates 13 stores in Oklahoma and Texas that sell oilfield and industrial supplies. The company started operations in 1948, but Trachtenberg acquired M&M in 2007, after gaining experience in oilfield supply.

“It was a family run business, which I’m well versed in,” he recalls, noting that he directed M&M to move towards a more disciplined corporate culture. “But we haven’t lost our core value, which is service.”

This allowed M&M to form alliances with major oil and gas players in Oklahoma, including those that operate on regional and international levels. “We’ve offered different types of incentives to [guarantee] their loyalty to us,” he says. “It’s allowed us to increase our inventory and buy at a much better level.” MM Supply box

M&M also has been fortunate to have its stores located in the South Central Oklahoma Oil Province (SCOOP) and Sooner Trend Anadarko Basin Canadian and Kingfisher Counties (STACK) plays, the two biggest shale plays in its home state. “They’re relatively inexpensive for the majors to drill,” he says.

Customer Breakdown

Ninety percent of M&M’s current revenue is based on oil and gas. Trachtenberg notes that this portion can be divided into three segments: new production, maintenance and infrastructure or pipelines.

“As these new areas develop, pipelines have to be developed to transport both oil and gas,” he says, noting that some of his clients will be laying branches into the Dakota Access Pipeline.

Another five percent, he notes, comes from industries such as asphalt processing and energy. “We’re also constantly trying to develop new industrial relationships,” Trachtenberg says.

“Oklahoma City has quite a lot of industrial work that goes on,” he continues, noting that many tire manufacturers, Tinker Air Force Base and printers use M&M’s products. “We’re actively pursuing those markets.”

Highs and Lows

M&M has survived business shifts over the past 11 years. When Trachtenberg bought the company in 2006, its revenues were at $35 million. “In ’07, when we took off, we grew to $51 million,” he recalls.

By 2014, M&M reached revenues of $80 million, but saw a slowdown in 2015. Although many regional and national competitors lost money, “We held firm,” he recalls, admitting that the company was not so lucky in 2016.

“It was impossible to make money,” he recalls, noting that M&M saw its profits decline by almost 50 percent and let go 20 employees. However, he kept the cuts to people it had to remove.

“We cut the fat but we never got into the muscle,” he recalls, noting that the company survived the year with a lean team. “We retained [approximately 108] very good employees.”

A few key customers also continued to be profitable even when oil prices dropped in ‘15 and ‘16. “That kept us going,” he says, noting that M&M expects to see growth this year.

“I’m hoping to see [revenue] numbers somewhere in the $55 million range,” he says, noting that the company will cope with an increase in commodity prices, particularly steel.

“It’s a difficult thing to pass onto the end-user,” he says, noting that the industry also will be impacted by tariffs placed on imported goods. “We’re going to see a lot less import material in the United States.”

Great Growth

M&M recently added a new, 25,000-square-foot distribution facility in Oklahoma City. Every day, two of its large vehicles travel from the facility to its northern and southern stores to keep them stocked.

“It’s allowed us to bring a lot of freight-allowed items in, so we save money on freight,” Trachtenberg says. “We’re doing large power buys to achieve better pricing.”

This has helped M&M bulk up and maintain large inventories of Balon Valves, Kimray Valves and Domestic Fittings. “Typically, when the market increases, deliveries become a challenge to many domestic suppliers,” he says.

“It’s paid off very well for us,” Trachtenberg says. “We’re not having delivery issues and our competitors are. In fact competitors call, wanting to buy from us.”

M&M also plans to open a new store in a location that its partners have identified as “a new, geographic hotspot,” he says, noting that the company is confident it can draw people in. “We’ve already started the due diligence on acquiring the buildings.”

The company also expects to grow beyond buildings. “I want to grow our partnerships with our best customers,” Trachtenberg says. “I’d also like to develop the industrial markets a little more so we are insulated, if oil drops again.”

M&M Supply also is proud to a member of Affiliated Distributors, an international buying group whose colletive sales exceed $4 billion.

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