By Corey Davis Reporter, Memphis Business Journal
Unlike a lot of companies, business has gone moderately well for Cornerstone Systems during COVID-19.
Matt Miller, the company’s area VP of sales, said the Memphis-based third-party transportation and logistics provider has gained some new undisclosed customers during the pandemic. In addition, the amount of business from existing clients has experienced a surge.
“What has been most interesting is the steady pace — and even increase — in volume with our essential shippers in industries such as wine and spirits, household goods, and construction materials,” Miller said. “Those customers continue to entrust Cornerstone with cargo and goods that are vital to our country.”
Last February, Cornerstone became 100% employee-owned. The company’s 193 employees have neither been furloughed or laid off due to the pandemic.
CEO and president Tim Clay stressed there is no disadvantage to being an Employee Stock Ownership Plan (ESOP) right now as employee-owned companies tend to perform better and at a higher level than non-ESOP.
“The alignment we have with our company’s culture and being an ESOP helps whether in recession, pandemic, or growth,” Clay said. “Our people are highly committed to their work and to this company. Our performance has stayed high.”
The multimillion-dollar company — with employees and branches spread out across the country —invested heavily in a disaster recovery plan. That investment allowed Cornerstone’s staff to be ready to work remotely when stay-at-home orders were implemented.
“Eighty-five percent of Cornerstone’s employee base was mobile ready with laptops and had complete functionality including phone capability,” said Mike Cathcart, network manager of Cornerstone. “We were able to reuse some older equipment to get the remaining 15% working remotely. Our smooth transition to working from home has allowed Cornerstone to serve our customers with very little interruptions if any.”
Guy Wallace, Cornerstone’s SVP of sales, said one of the company’s biggest challenges from a sales perspective has been the restricted travel requirements as sales — along with revenue — has seen a drop.
“As a company that prides itself on developing long-term, mutually beneficial relationships, doing everything by phone and email takes a bit of the relational piece out of the equation,” Wallace said. “With additional training, weekly engagement amongst the sales groups, and ongoing support amongst a collaborative group of sales-solution providers within many of sales teams, we have been able to adapt successfully in a more telemarketing environment.”
In 2019, Cornerstone grossed $309 million in annual revenue and was projected to increase that this year to $326 million in annual revenue, pre-COVID-19. Clay said this year’s revenue total could be down 10% to 15%.
“There is still some uncertainty as [to] what level of business will return and what capacity will look like as the businesses reopen,” said Seth King, Cornerstone’s director of finance. “While our first two quarters will likely be below our original projections, disruptions to the overall supply chain as a result of reopening the economy will provide us with some opportunities for the third and fourth quarters to outpace projections.”