Opportunities
60% Collateralized - Maui AC and Refrigeration Service and Installation
With $1.5M in assets and $2M in pipeline!
Specifications
With $1.5M in assets and $2M in their pipeline, this leading air conditioning and refrigeration company has been serving the island of Maui for more than 23 years! The businesses sees an even split between service and installation; 75% of their maintenance and repair clients are recurring while about 50% of their installation clients are recurring. This company provides their AC, refrigeration, and sheet metal services to even the farthest areas of the Maui island and their average monthly revenue is $400k. Their service projects range from $200 to $50k while installations range from $30k- $500k. There are 16 employees on staff including service and installation managers, technicians, a sheet metal expert, assistants, and a bookkeeper. They are known as the #1 refrigeration and air-conditioning company on Maui because of their excellent customer service and prompt quality repairs.
The owner has built a solid customer base and provides services to commercial clients like condos, shopping malls, retail stores some of which have relationships with this company spanning 20+ years. Operations are managed from a large 6,000 square feet location in the Kahului area. The office has 2,000 square feet of space and the remaining 4,000 square feet is dedicated to their warehouse and sheet metal shop. The owner currently focuses on general financial and business oversight as well as the bidding process.
Priced at $2,450,000, there is tremendous growth potential for a new owner. The company does no marketing; the only advertising they do is from their website and ads on their trucks. Over the years, all of their business has come from word of mouth due to the excellent service they provide. Implementing a marketing strategy would certainly boost sales.Business Highlights
- Year Established: 1997
- Location: Maui, Hawaii
- Service Area: Entire Maui Island
- Services: AC Repair & Installation, Maintenance, Commercial refrigeration repair & Installation
- Clients: Commercial (Condos, shopping centers, restaurants, office buildings), Residential – premium private homes
- Lease: $6,800/month; 6000 square feet (Offices, warehouse, sheet metal shop)
- Reason for Selling: Retirement Planning
- Employees: 16; 1 owner, 2 mangers, 10 technicians, 2 assistants, driver, sheet metal expert
- Seller Training Period: 1 year
- Current Owners' Responsibilities: Financial oversight, general management - has trained personnel who can manage the business in his absence
Employees
This company has 16 employees including the owner.
- Founder / CEO (1)
- Service Manager (1)
- Installation Manager (1)
- Office Manager (1)
- Service Technicians (5)
- Installation Technicians (5)
- Assistants (2)
- Sheet Metal Expert (1)
- Lead Technician (1)
Financial Highlights
List Price: $2,450,000
- Gross Sales
- 2020: $3,677,379
- 2019: $3,818,256
- 2018: $4,302,304
- Cash Flow
- 2020: $528,666
- 2019: $723,503
- 2018: $682,068
Assets: $1,500,000
- Vehicles: $1.2M ;15 trucks
- Equipment: $195K; Forklift, Sheet metal equipment, Misc. tools, computer systems
- Inventory: $105K
- Backlog: $800K
- Pipeline: $2M+
- Intangible Assets: Reputation for excellent customer service and quality prompt repairs
*52% Collateralized
Cash Flow Analysis
| Description of Financial Statement | P&L Statement Jan-Dec 2020 | Tax Return Cash | Tax Return Cash | Tax Return Cash | Notes |
| 2020 | 2019 | 2018 | 2017 | ||
| GROSS SALES | $3,677,379 | $3,818,256 | $4,302,304 | $3,941,775 | |
| Net Income Shown on Financial Statement | $355,437 | $293,663 | $668,315 | $538,167 | |
| ADDBACKS | |||||
| Compensation to Owner | $136,189 | $134,769 | $134,638 | $123,914 | |
| 11% Tax on total W2 Salaries | $14,981 | $14,825 | $14,810 | $13,631 | |
| Depreciation | $0 | $47,018 | $50,094 | $16,444 | |
| Interest | $11,171 | $13,725 | $15,323 | $18,356 | |
| Rent | $-825 | $-6,437 | $-5,545 | $-7,354 | |
| Cell Phone | $1,379 | $1,379 | $1,379 | $1,379 | |
| Meals & Entertainment | $1,203 | $1,035 | $998 | $620 | |
| Travel | $4,078 | $8,573 | $7,103 | $6,452 | |
| Pension | $4,953 | $4,953 | $4,953 | $4,953 | |
| Donations | $100 | $0 | $0 | $0 | |
| One Time Cost | $0 | $210,000 | $-210,000 | $0 | |
| TOTAL ADDBACKS | $173,229 | $429,840 | $13,753 | $178,395 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $528,666 | $723,503 | $682,068 | $716,562 | |
| Profit Margin | 14.38 % | 18.95 % | 15.85 % | 18.18 % |
- 2018 was an anomaly – they got big deposits at the end of the year and the jobs didn’t get done till 2019.
- Sales are down ~$150K in 2020 due to Covid. Some of their service jobs were stopped due to closures of restaurants, retail stores, shopping malls and other commercial clients that they work with
- 2021 pipeline is greater than $2M and business is expected to pick up.
Valuation
Funding Example
Funding Details
Business:
Offer Price: $
% Buyer Cash Down at Closing: $
% Seller Carry Back via Promissory Note: $
year term at a rate of %
% of Purchase Price secured by Buyer and Seller
Total Bank Loan Need: $
% of Purchase Price
Desired Loan Type:
Desired Bank Terms: year term at a rate of %
Total Business Assets, Inventory, and A/R: $
Total Undercollateralized Loan: $
Loan Payments
| Monthly Payment to Bank: | $ |
| Yearly Payment to Bank: | $ |
| Monthly Payment to Seller: | $ |
| Yearly Payment to Seller: | $ |
| Total Monthly Debt Service: | $ |
| Total Yearly Debt Service: | $ |
Conclusions
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
|
Cash Flow: 4 year average |
$ |
| Annual Debt Service: | $ |
| RATIO: |
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
|
Cash Flow: 4 year average |
$ |
| Annual Debt Service: | -$ |
| NOI: |
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
| Down Payment: | $ |
| NOI: | |
| ROI: | % |
Attachments
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