Luminous Lighting Inc.

Kwantlen University

ENTR 3120 – Managerial Accounting

Take Home Case #1 - Luminous Lighting Inc.

Luminous Lighting Inc. sells a wide range of residential, commercial and industrial

lighting products including lamps, ceiling lights, metal floor lamps, discharge lamps,

ballasts and lighting fixtures. Located in Vancouver, British Columbia, its products are

sold around the world, but primarily in Canada and the United States.

Company Background

Partners Craig Regensburg and Paul Smith were life-ling friends who grew up in Surrey,

British Columbia. After graduating high school in the 1990’s Craig went on to get his

electrical certificate from BCIT and worked at a reputable commercial electrical

contractor firm for a number of years. Paul, having worked in the office furniture supply

business, encouraged Craig to invest in a small office furniture and supply re-sale

consignment business. The store was moderately successful and after two years the

partners sold the business, generating a modest profit for themselves.

In 2011, Craig and Paul purchased Luminous Lighting from a retiring baby boomer. At

the time of purchase, the company offered a wide range of products in both the

residential and commercial/industrial lighting markets. Since the acquisition, the partners

have opted to expand the business in the area of commercial and industrial lighting

because it offers attractive, sizable contracts, healthy profit margins, and a growing

market place. In 2013 total sales for Luminous Lighting equaled $18,250,000 with

commercial sales representing 75% of the total business. Sales to the United States

represent 68% of total commercial and industrial sales.

Industrial lighting is the company’s most profitable division and has seen significant

growth in the last year. Since 2013, the company has developed a niche in vintage style

industrial lighting. Many of the products have been salvaged from industrial sites and

reworked to meet safety standards....