Bufetico
The people who build roof trusses at a plant on East Fremont Street in Stockton, California, found out last month that their jobs end in October. There are sixty-five of them. The company is Stockton Truss, and it has been making the wooden frames that hold up roofs since 1977. Stocktonia, the local news site, reported it last week. The notice it filed with the state on August 18 calls the layoff permanent and sets the date at October 18. Stocktonia asked the company for comment and got no answer.
You can see the reason from the road anyway. A truss gets sold to somebody building a house, and fewer houses are getting started. In the builders’ own survey for August, 35 percent of them said they had cut prices to move homes, and their confidence index has been under 40 for sixteen months straight.
So the Stockton crew is finding out the hard way what anyone with money in building products wants to know this year: is this a cycle at the bottom, or a business that’s shrinking? They look the same for a year or two and then go completely different ways, and the profit line can’t tell them apart. I’ll show that with two real companies that sit above a truss plant in the chain: a manufacturer that sells the steel plates and the design software truss shops use, and a much bigger supplier that builds roof trusses in factories of its own. The figures come from their filings, and I picked them on purpose: one that looks steady and one that looks like it’s sinking.
Twelve years of profit that never showed a downturn
The manufacturer’s net income, in millions of dollars, for twelve straight years:
63.5, 67.9, 89.7, 92.6, 126.6, 134.0, 187.0, 266.4, 334.0, 354.0, 322.2, 345.1.
That’s close to a straight line. Only one year goes down, 2024, and it’s by nine percent. Nothing in it looks like a company that gets hit by a housing cycle, and if you ran a truss shop, you’d want a supplier that steady.
The cash its operations produced looks different. It fell from 207.6 to 151.3 in 2021, which is twenty-seven percent, and later from 427.0 to 338.2 in 2024, which is twenty-one percent. I start that cash series in 2017, because before that the company changed the earlier years’ figures from one annual report to the next. Those earlier years have a smaller dip too: from 117.9 to 99.0 in 2016, sixteen percent, as the 2017 report restated them. So the company has had downturns that the profit line never showed, or barely did.
What profit leaves out
Profit is calculated after spreading some costs over years and counting some sales before the money arrives. Cash is what came in and went out. In a business that carries a lot of inventory and buys steel, the usual suspect is working capital: stock and money owed by customers swelling when prices rise and unwinding when they fall. I haven’t gone through those lines year by year, so take that as a guess that fits the shape.
The opposite case
Now the bigger supplier, the one that builds trusses itself. Revenue: $16,400 million in 2024, $15,191 million in 2025, and lower again in the first half of 2026. Net income: $1,078 million in 2024, $435 million in 2025, and a loss of $51 million in the first half of this year.
From those two you’d say the business is in trouble. Revenue falling two years in a row and profit turning into a loss is what a business in decline usually looks like. Now look at the cash its operations produced in that same half, the one with the loss: $155 million, and it’s positive. A company running out of money doesn’t usually produce cash, though some do for a while. So this looks like a company at the bottom of a cycle. Profit went negative, and I take that as fixed costs spread over fewer sales. The business itself kept collecting more than it spent. The payables line behind that cash number needs its own look, and that’s another article.
What I look at instead of the profit line
So the two lines disagree at both companies, in opposite directions. The profit line doesn’t settle it, and one year of anything doesn’t either. The most recent year is the one that gets taken for normal. I work from the cash series averaged across the whole stretch, best year to worst, and I look at three things: whether the cash comes back, whether the company controls its own timing, and whether the fall is in volume or in price. Only one of the three is a number.
Any company’s cash drops some years. I want to know whether it goes down and comes back to where it was, or higher. In the manufacturer it did, 151.3 and later 399.8. A business in decline produces a cash series that falls, recovers less than it lost, and falls again from the lower level. One downturn doesn’t tell you much. Three usually do.
Whether the company controls its own timing is easy to skip, and it matters more than the cash test. A cyclical at the bottom is only a cyclical if it can wait. You’d look at cash on hand first, but at a company the size of the supplier that doesn’t settle much. Look at when the debt falls due and how much credit it has left undrawn. The supplier’s own annual report puts the first of its notes due in 2030.
In the revenue line you can’t tell volume from price. A company selling the same number of trusses at a lower price has a margin problem, and that reverses when prices do. One selling fewer trusses at the same price has a demand problem, and that demand may not come back. If the company breaks out volumes, its own commentary separates the two, and when a company stops breaking them out, that tells you something too.
Where this breaks
I’ve used the cash line as the reliable one and the profit line as the misleading one, and real accounts aren’t that tidy. Cash can be managed too, and more easily than you’d think. A company that stops paying its suppliers on time shows a beautiful cash flow statement for one period. Inventory run down to nothing looks like a windfall right up until the shelves are empty. And the statement doesn’t flag either one. So the cash series is one more witness, and it doesn’t settle anything on its own. If the two disagree, spend an hour on it. If they agree, don’t relax, because they can agree for bad reasons too.
And none of this works on a company that hasn’t had a downturn yet. “It’s never had a downturn” can mean one of two things: a business that holds up, or a stretch of years that never tested it. Twelve years of data that start after 2008 isn’t a long record in an industry where the cycles run that long. You can’t average across a cycle you’ve never seen.
What gets published before the Stockton plant’s last day
The Stockton layoff takes effect on October 18. Before that, two things this piece leans on get updated. The Census Bureau publishes housing starts for August next Thursday, September 17, and there’s a sentence about that series in the manufacturer’s own annual report. U.S. housing starts, the company says, have been falling year over year since 2021, and in 2025 its sales volumes tracked that decline closely. The market shrank for four years, and the profit line went up in three of them. Its third quarter closes at the end of this month. When its third-quarter numbers come out, I’ll go straight to the cash from operations for the nine months and set it next to the same nine months a year earlier. The last two years those numbers came out in the second half of October, and the full quarterly filing followed in November. Last year’s was filed on November 7.