Contractor Profile: Kalkreuth Roofing and Sheet Metal

Jun 07, 2023

Ahead of this year’s Independence Day weekend, Kalkreuth Roofing and Sheet Metal staffers gathered outside the company’s Wheeling, W. Va., headquarters for the firm’s annual company barbeque, mingling and enjoying the trappings these affairs offer: wieners, watermelon and corn-on-the-cob. The roughly 100 or so employees in the Wheeling office were an amalgam of top brass, mid-level executives, support staff and field crews.

Carousing started around noon and likely continued until, as the trades say, it was “time to roll up.” Among the revelers in the company’s parking lot was David Hesse, a Kalkreuth lifer and, since 2022, one of the concern’s co-principals.

Two hours in, Hesse nonchalantly walked toward the adjacent lot, hoping his absence wouldn’t be glaringly obvious. But, when you’re a boss, flying under the radar is a tall order. As he neared his car, he was stopped by his marketing director.

Apologetically, Hesse explained that to beat pre-holiday traffic, he needed to head home to his family in Maryland. It’s about a four-hour drive from the Appalachian foothills to his front door. Some friendly haranguing was the apparent exit fee.

With that, Hesse made his way out of the headquarters’ parking lot, leaving the laconic town of Wheeling, population 25,000, hugging the banks of the Ohio River behind.

Before hitting the freeway, however, the boss pulled off the side of the road and, likely to the consternation of his marketing director, took the time to speak with me about how his first job out of college is with the same company he now owns with his former divisional colleague, Pat Hurley, brother of the company’s president and majority shareholder, Jim Hurley.

More than three decades since Hesse’s first day, Kalkreuth Roofing now employs more than 500 people throughout six regional offices, generating approximately $120 million in revenue annually. The concern appears at No. 15 in Roofing Contractor's list of the Top 100 Roofing Contractors for 2023.

The Nationwide Children’s Hospital in Columbus, Ohio, was a new construction job; Kalkreuth worked with Turner Construction Co. as the project’s general contractor. Project scope: 135 squares, Hot Fluid Applied; 287 squares of PVC, and; four squares of louvers.

Roofing Contractor first profiled Kalkreuth Roofing in 2015, back when its eponymous then-owner, John Kalkreuth, was president and CEO of the firm; its roots date back to an earlier iteration, Kalkreuth Brothers Roofing, that John's grandfather and great-uncle founded in 1920.

By 1984, with the original firm all but defunct, the third-generation Kalkreuth and partner Jim Hurley as his wingman refashioned the foundered firm into the Kalkreuth we know today.

The two graduate degree-holding engineers were young and hungry to grow the business. As Kalkreuth described in that 2015 article: “[W]e had been doing a lot of small repair jobs, many for the Fort Steuben Mall … [until] the mall’s owners decided to do a reroof and we got the call; it was a big job for us then. It came at the right time and helped us get a positive [reputation] for our first year of business.”

The time-tested adage, “the rest is history,” rings true here. From that first reroof, Kalkreuth Roofing grew, and other than a fractional residential roofing department that operates exclusively in its hometown headquarters, the concern focuses solely on commercial roofing projects. In 2018, Kalkreuth transitioned from running daily operations to becoming the company’s chairman of the board, and Jim Hurly assumed the role of president. Company operations include its West Virginia headquarters with two regional divisions: Maryland and Pennsylvania, as well as offices in Maryland, Pennsylvania, Kentucky and Ohio. Hesse ran the Maryland operation as divisional vice president; Pat Hurley held the same position for Kalkreuth’s Ohio division.

By 2020, Hesse, living in Fredrick, Md. — a Kalkreuth office location — was feeling the tug of small-town Wheeling’s gravity; he prepared his family for a move from the Baltimore-Washington D.C. area to West Virginia. His wife, Susan, and daughter Logan, then a fifth-grader, seemed game for the new adventure until a world-disrupting pandemic stopped everyone — and virtually everything — in its tracks.

“My wife was retiring from her job, and Logan was going from fifth to sixth grade, so it seemed like a good time to make that move,” Hesse recalled. “And, you know, then COVID happened, so we didn’t move.”

Now age 12, Logan undoubtedly dodged a major social-changing bullet.

“Thankfully, COVID taught us that we can do a lot remotely, and so we didn’t have to move to Wheeling,” Hesse, 53, added with a sheepish laugh.

LEFT: Dave Hesse, executive vice president of Kalkreuth Roofing, has been with the company since college graduation. He is now a co-principal of the firm. MIDDLE: Pat Hurley, brother to company president Jim Hurley, is the vice president of Kalkreuth’s Ohio Division and a minority shareholder in the firm. RIGHT: Jim Hurley, president of Kalkreuth Roofing, has been with the firm since the mid-1980s, and is now the concern’s majority shareholder.

Like most white-collar workers during COVID, Hesse worked remotely — out of the Maryland office. As lockdown restrictions receded and the country reopened, the advent of Zoom and other online meeting platforms had made moving irrelevant, and by the start of 2022, Kalkreuth was preparing to retire.

Hesse and the Hurley brothers made their move: collectively, they found the wherewithal to purchase Kalkreuth’s shares and, with Jim Hurley now the majority shareholder, his brother Pat securing himself a minority stake, the three men assumed ownership. Wheeling’s gravity may have been vanquished, but Hesse says the tradeoff is plenty of road time traveling between Maryland and West Virginia.

“So, I'm traveling more now that I'm out of my day-to-day divisional responsibilities and traveling to the different offices and enjoying that part of it,” he said.

In terms of divisions of labor, Jim Hurley, as president, manages the firm’s day-to-day operations; his brother, Pat, is still a man of the field, managing the firm’s various projects in and around the Ohio market as division vice president. Hesse seems to have experienced the greatest evolution.

Now executive vice president, the days of field inspections and regional management have given way to the responsibilities one may expect from helping manage a firm of Kalkreuth’s size. He has essentially become to Jim Hurley what Jim was to Kalkreuth during that tenure — a right-hand man.

“I've taken over [several] of the business’s critical functions,” Hesse said. “Departments that I oversee include [information technology], marketing, human resources, purchasing and like operations. Pat is still running the Columbus division, and Jim remains president.”

Headquarters: Wheeling, W. Va.

Specialty: Large-scale commercial, industrial, military

Number of Employees: 560 full-time; 160 office staff; 400 unionized field workers

2022 Revenue: ~$125 Million

Website: krsm.net

Unlike many roofing contracting firms that offer “both commercial and residential” services, the practical matter is that most roofing contractors remain ensconced in the residential space. Firms like Kalkreuth which, according to initial data collected for RC’s 2023 Top 100 List, play in a league of their own. Based on previous Top 100 entries, Kalkreuth typically falls within the top 20 largest roofing contracting concerns nationwide and continued that trend in this year's list.

In practice, that means projects the company bids for and is hired to work on are typically large-scale, urban-centric and complicated. Given its size, the company’s field units are all union workers, usually offering better pay and allowing the firm entrée to compete for scaled-complexity projects.

“The type of work we perform varies by market,” Hesse explained. “The Kentucky-area market is very modified bitumen roof-centric whereas Maryland doesn’t use much of that type of material, but the [Baltimore-Washington D.C.] area has somewhere around 30 military bases. Plus, we do a ton of work for the U.S. Army Corps of Engineers in that space.”

The Columbus, Ohio area, Hesse said, is “on fire,” and the high-density urban market has several large commercial and industrial projects, including a forthcoming Intel semiconductor plant, under construction.

“And Wheeling,” he says with a chuckle, “... hasn’t built a building in downtown for 80 years, so [the West Virginia-based crews] have had to learn how to travel.” [Editor's note: For clarity, Hesse was being playful with this remark lest anyone in Wheeling is offended.]

Yet, given its rural home base, the outfit’s Wheeling field teams are highly specialized.

‘We're finishing up a nuclear power plant in Georgia,” Hesse said nonchalantly as if describing a shed roof. “We've been there for two or three years, and it's [one of] the first nuclear power plants slated to come online in the country since the mid-1990s.

“So, [Wheeling] crews learned to travel, and that's where, again, another part of being union helps is the portability of manpower,” Hesse said.

When I brought up the inflow of private equity within the roofing space, Hesse pointed out that the commercial side of roofing went through that type of consolidation years earlier, which is likely why firms like Kalkreuth are in a class of their own.

“I think in terms of private equity, there was significant consolidation in the commercial space, but that goes back 15 years, which produced some of the largest commercial contractors around, like Tecta,” Hesse explained. “There's still some private equity that's always been out there, but I don't think that we've seen the influx of private equity on the commercial side like what’s taking place on the residential side; residential is significantly more fragmented.”

Solar?

Nope. Even for a self-acknowledged engineering geek like Hesse, the appeal of solar holds little interest for Kalkreuth, at least for now.

“We've certainly worked on solar projects and had solar as a part of roofing projects,” Hesse said. “But for us, you know, we've just not ventured into that market at all.”

Vegetative Roofing?

Yep, and it’s big for Kalkreauth.

“Green roofing, plants and soil, growth media, particularly in the D.C. and Columbus markets where you have multi-use buildings in downtown areas is a sizable part of business for us,” Hesse said. “You know, using rooftops as amenity spaces with pools and dog walks and lounging areas, that's something that has been a huge trend over the past 10 years.”

Like any concern of its size, Kalkreuth Roofing recognizes that its success doesn’t happen in a vacuum; therefore, it has a role in helping better the society for which it builds shelter. To that end, the two principal charities it commits its resources and financial assistance to are Easterseals and the Roofing Alliance. The latter organization, which, at its core, is the philanthropic arm of the National Roofing Contractors Association, has a longstanding relationship with Ronald McDonald House Charities through which Kalkreuth has channeled its aid.

“We're part of the Roofing Alliance and, as you might know, [the group] sponsors all of the Ronald McDonald houses nationwide,” Hesse says. “Right now, we are currently putting the roof on the new Ronald McDonald House in Columbus, and when finished, it'll be the largest Ronald McDonald House in the United States.”

In the case of the Roofing Alliance, unlike Easterseals, where the company gifts direct financial aid, Kalkreuth is providing its labor and materials to the project, gratis. The company has also recruited some of its key suppliers to contribute to the effort.

“We’ve had a lot of donations from some of our important manufacturers in this project,” Hesse mentions. “You know, from GAF and IB [Roof] Systems, and also Hunter and American Hydrotech, they’ve each donated tons of roofing materials, and it’s great.”

For Easterseals, the firm holds a golf outing called the Kalkreuth Amateur Golf Championship, held the past several years at the OgleBay-Speidel Golf Course in Wheeling, which raises thousands of dollars each year for the nonprofit healthcare organization. In 2022, the company handed over a check for $60,000. This year’s classic was planned for July 22-23, 2023.

After 31 years of a career solely dedicated to the roofing contracting trade, Hesse, an industrial engineer by education, is a roofer by choice. Along with the Hurley brothers, the three men and their colleagues have taken a long-established, family-owned firm — mind you, of substantial size — and managed to further grow it beyond even what its founding family achieved — which was substantial.

“I think the thing that I've learned [the most] … in 31 years is what an unbelievable industry this is, the amount of civic and charitable work that the companies do and how down to earth and helpful; it's a brotherhood, a sisterhood within the industry,” Hesse says. “It's amazing, you know, you can go to regional or national meetings and be able to talk and shake hands and, you know, find common ground with just about anybody in the industry.”

This article was updated at 12:30 p.m. EDT on 08/07/23 to reflect the company's No. 15 ranking in RC's 2023 'Top 100' list

This article was updated at 5 p.m. EDT on 08/08/23 to reflect that Hesse was working remotely from the company's Maryland office, not from home as originally appeared. Additionally, Kalkreuth Roofing and Sheet Metal, with roots dating back to 1920, was founded, in its current iteration, in 1984 by John Kalkreuth and Jim Hurley.

Bryan Gottlieb is the Managing Editor of Roofing Contractor magazine. He previously worked for the Detroit Metro Times, the San Diego Daily Transcript and Adweek magazine.

Reach him at [email protected]