Every stage of the P&L, on a percent-of-revenue basis, tracked across 14 quarters and measured against specialty-trade industry benchmarks — built to be re-run each quarter.
Over the last twelve months Cascade grew revenue +31% to $81.4M — but gross margin fell from 27.0% to 19.8%, and operating margin from 10.5% to 5.8%. Roughly 80% of that erosion is materials inflation the company is absorbing instead of pricing through.
Net margin sits just above operating because other income currently exceeds interest expense — and interest is still parked inside operating costs (see restructure rec #2, which moves it below the line).
The good news: net margin at 6.2% is still squarely in the healthy 3–8% band for a specialty exterior sub, overhead leverage actually improved as revenue scaled (SG&A 16.5%→14.0%), and the two biggest divisions remain solid. This is a pricing-and-mix problem, not a broken cost structure — and pricing is the most fixable lever there is.
Three moves this points to: (1) restore pricing discipline / material-cost pass-through in bids; (2) address the two lagging divisions (St. George, Ogden) and integrate Vinyl Guys margin; (3) fix the bookkeeping issues that currently obscure the read (see P&L restructure).
Each cost stage as a percent of operating revenue, all 14 quarters. Read top-to-bottom: of every revenue dollar, how much is consumed by labor, by materials, and what survives as gross margin, operating income, and net. Figures rebuilt from QuickBooks leaf accounts; the connector's rollup double-counts COGS and is not used.
| % of revenue | 23-Q1 | 23-Q2 | 23-Q3 | 23-Q4 | 24-Q1 | 24-Q2 | 24-Q3 | 24-Q4 | 25-Q1 | 25-Q2 | 25-Q3 | 25-Q4 | 26-Q1 | 26-Q2 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (Operating) | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
| Direct Labor | 46.6 | 42.5 | 39.8 | 41.9 | 33.8 | 37.4 | 32.0 | 36.2 | 31.8 | 39.1 | 40.1 | 37.3 | 32.5 | 38.6 |
| Direct Materials | 50.2 | 44.1 | 39.9 | 52.6 | 38.9 | 38.3 | 37.1 | 41.4 | 42.0 | 31.7 | 42.2 | 39.3 | 43.3 | 46.9 |
| Total Cogs | 97.2 | 86.9 | 79.7 | 94.7 | 72.8 | 76.6 | 70.2 | 77.7 | 73.8 | 70.8 | 82.3 | 76.6 | 75.8 | 85.5 |
| GROSS MARGIN | 2.8 | 13.1 | 20.3 | 5.3 | 27.2 | 23.4 | 29.8 | 22.3 | 26.2 | 29.2 | 17.7 | 23.4 | 24.2 | 14.5 |
| Total Opex | 10.7 | 10.1 | 9.6 | 17.6 | 11.5 | 13.3 | 13.6 | 20.5 | 14.6 | 17.8 | 16.8 | 18.2 | 12.3 | 11.9 |
| OPERATING INCOME | -7.9 | 3.0 | 10.7 | -12.2 | 15.7 | 10.1 | 16.2 | 1.7 | 11.6 | 11.5 | 0.9 | 5.2 | 11.9 | 2.6 |
| NET INCOME | -5.8 | 3.3 | 11.0 | -12.0 | 16.9 | 11.2 | 17.4 | 2.9 | 11.6 | 11.5 | 0.9 | 5.2 | 12.5 | 3.0 |
Gross margin is shown on the reconciled (TrackVia) basis — the truest cross-checked view, since QBO's 2023 books are cost-mistimed (they'd show a false 2.8% Q1 collapse). Operating margin is normalized for depreciation, which QBO otherwise dumps entirely into Q4 and craters every fourth quarter. The shaded band marks the Vinyl Guys integration, where 2026 figures should be read as preliminary.
Two gross-margin bases, same story. This chart plots the reconciled (TrackVia) basis, which runs ~3–4 pts above the QBO common-size basis in the P&L walk and the headline (27.0%→19.8% TTM). Both are disclosed, and both show the same ~7-point slide — the reconciled line just sits a few points higher because of how job-indirect costs are classified. Judge the trend, not the absolute level, across the two.
Normalizing to a single home-equivalent strips out volume and mix and shows the real unit economics. The signal is stark: revenue per home is flat across three and a half years while materials per home keeps climbing. Labor per home is stable — labor is not the villain here. The margin is being squeezed from the top (no price escalation) and the middle (material inflation), not from the crews.
Gross margin only (division-level overhead allocation isn't yet set — see restructure rec #5). Orem is the anchor: ~60% of completed revenue at the best margin. St. George and Ogden lag — St. George is the most volatile (bid-discipline review warranted), and Ogden is the newest and most material-heavy (the Vinyl Guys book, a margin-improvement target as it scales).
Benchmarks are triangulated from CFMA specialty-trade contractor data and adjacent public installers (IBP, TopBuild), assembled by Porter. One critical caveat: "gross margin" is defined differently across sources (public installers count only materials+labor in COGS, ~30–34%; the CFMA survey loads more in, ~16%), so the only truly apples-to-apples lines are operating and net margin — lead with those.
| P&L stage | Cascade (TTM) | Specialty-trade range | Read |
|---|---|---|---|
| Gross margin % | 19.8% | 16–18% * | ⚠ Definitions differ — compare with care |
| Direct labor % | 36.6% | 30–40% (est.) | In band |
| Direct materials % | 43.5% | 35–45% (est.) | High end — the pressure point |
| SG&A / overhead % | 14.0% | 8–12% | Above median — scale opportunity |
| Operating margin % | 5.8% | 6–9% | Just below median |
| Net margin % | 6.2% | 3–8% (honest field) | Mid-band — solid |
* Gross-margin ranges use the CFMA specialty-trade definition and are not directly comparable to Cascade's gross line without aligning COGS definitions. Labor/materials ranges are estimates — Cascade's own job-cost data is more reliable than any external figure. Net-margin field reflects the real spread between CFMA (~6.9%) and NAHB (~2.2–3.5%) survey cuts.
Vinyl Guys jobs completed operationally in Oct 2025 → Jan 2026 (449 jobs for big production builders — Ivory, Meritage, Lennar, DR Horton), but the revenue was recognized in QuickBooks as a ~$9M spike in Q1-2026 — the quarter total company revenue roughly doubled to ~$26M. The full VGI book is best stated as ~$9–12M. Note the three lenses peak in different quarters because they measure different events: jobs completing (late 2025), revenue recognized in the books (Q1-2026), and jobs migrated into the job-cost system (the 2026 Ogden ramp below).
Honest caveats: Vinyl Guys carried no cost/revenue fields, so its standalone margin is unknown — Ogden's 19.6% gross margin and 45.7% material load suggest it's dilutive, but that's inference, not fact. Until the rest of those jobs migrate into the main job-cost table, 2026 division history is preliminary and will restate (some VGI subdivisions may re-tag to Salt Lake/Orem rather than Ogden). The tell in the books: the TrackVia↔QBO revenue gap, normally ~$2.7M/quarter, spikes to ~$11.8M in Q1-2026 — roughly $9M of VGI billing recognized at once.
The diagnosis points at one lever above all others. Growth has been volume-only while materials inflated — the fix is bidding and pricing discipline that passes input costs through, not cost-cutting on crews (labor isn't the problem).
These are bookkeeping-quality issues that currently distort the read — worth fixing before the next quarterly cycle, and most are Clara's (reconciliation) territory. They don't move the business by themselves, but they make the pricing problem — and division accountability — measurable.
The enduring set — refresh these every quarter. Current values are TTM through Q2-2026; trend is vs. the prior TTM.
| Metric | Definition | Current | Trend | Why it matters |
|---|---|---|---|---|
| Gross margin % | (Rev − direct labor − materials) ÷ rev | 19.8% | ↓ from 27.0% | The number to manage to; the model's bedrock |
| Direct labor % | Fully-burdened field labor ÷ rev | 36.6% | ↑ from 34.8% | Crew efficiency / piece-rate discipline |
| Direct materials % | POs w/tax ÷ rev | 43.5% | ↑ from 37.9% | The current margin leak — inflation not priced through |
| Overhead / SG&A ratio | Total opex ÷ rev | 14.0% | ↓ from 16.5% | Operating leverage as you scale |
| Operating margin % | Gross margin − opex | 5.8% | ↓ from 10.5% | Core business profitability |
| Net margin % | Net income ÷ rev | 6.2% | ↓ from 11.1% | Bottom line incl. other income |
| Revenue / home-equivalent | Rev ÷ homes completed | ~$27.7K | flat 3.5 yrs | Pricing signal — flat means no escalation |
| Materials / home-equivalent | Materials ÷ homes | ~$12.2K | ↑ ~20% since 2023 | Input-cost inflation, unit-normalized |
| Completed homes / qtr | Σ home-equivalents w/ final date | 882 (26-Q2) | ↑ | Real volume — strips price & mix |
| Division gross margin % | Per-division GM (TrackVia) | Orem 25.7 · Salt Lake 23.2 · St. George 20.8 · Ogden 19.6 | St. George & Ogden lag | Where margin is earned or lost |
Recommended additions once data is wired in: builder revenue concentration (customer risk) and revenue per field employee (org-level productivity — needs the piece-rate task-team crew roster as the denominator).