Opportunities
CCTV Pipeline Inspections & Flow Monitoring Services
Sold
Over $2M in sales and 55% profit margin!
Specifications
With over $2M in sales and a 55% profit margin, this sewer pipeline inspection company in Honolulu has been established for over 15 years! Specializing in CCTV inspections of pipelines, their top-notch equipment and vehicles allow their well-trained PACP-certified staff to meet the needs of their client base, 90% of which consists of engineers for construction companies, municipalities, or consulting engineers. They also provide manhole/corrosion inspections, smoke testing, flow monitoring, and sewer/pipeline cleaning. Over $1M worth of vehicles including 3 CCTV trucks, 3 cleaning combo trucks, and 4 pickup trucks are part of the nearly $2M in business assets, as well $500k worth of generators, hand tools, computer equipment, and camera equipment, making the bank loan nearly 50% collateralized. The team consists of 10 full-time employees, including 1 Director of Operations, 1 Quality Control Supervisor, 1 Salesperson, and high skilled CCTV and Vactor Operators and field technicians. The owner currently manages business development, accounting, operations, administration, and IT and is willing to stay on for 2-3 years post-sale to ensure a smooth transition.
The company’s average sale size is approximately $20k, with an average of 10 work orders per month. Currently, the business has $478k worth of work in their pipeline. The company was deemed essential during COVID, allowing them to increase their rates due to the increase in the need for PPE gear and adding trucks to accommodate social distancing guidelines.
Priced at $4,100,000 and with a well-established reputation already in place, a new owner could easily boost sales by pursuing other areas in the general industry, such as construction and storm sewer system services. A 12.5% down payment of $512,500 returns $478,292 in the first year after debt payments – a 93% return on investment!
Business Highlights
Year Established: 2005
Location: Honolulu, Hawaii
Service Area: Big Island
Services: CCTV Inspections, line cleaning, manhole/corrosion inspections, flow monitoring, smoke testing
Clients: Primarily engineers for construction companies, municipalities, consulting engineers
Certifications: NASSCO PACP certified
Lease: 4,000 sq. ft. facility; 80% warehouse, 20% office
Reason for Selling: Approaching retirement
Personnel: 12: 10 FT, 2 PT; 1 Owner + 1 Director of Operations, 1 Quality Control Supervisor, 1 Salesperson, along with CCTV and Vactor operators and field technicians
Seller Training Period: 2-3 years
Growth Opportunities: Pursue more projects in the construction industry, expand services to include storm sewer systems and pipeline repairs/rehabilitation
Current Owners’ Responsibilities: Business development, some accounting, operations
Employees
- 1 Owner
- 1 Director of Operations
- 1 Quality Control Supervisor
- Field Supervisor
- CCTV Operators
- Vactor Operators
- Field Technicians
Operations
- Average Sale Size: $20k
- Average number of work orders per month: 10
- Value of recurring monthly revenue: $30k
- Value of work in the pipeline: $478k
- Value of backlog: $680k
Profit Margin
Average Profit Margin: 44%
Financial Highlights
List Price: $4,100,000
- Gross Sales
- TTM March 2020-Feb 2021: $2,087,431
- 2020 (July 2019-June 2020): $2,360,891
- 2019 (July 2018-June 2019): $2,230,416
- Cash Flow
- TTM March 2020-Feb 2021: $1,155,757
- 2020 (July 2019-June 2020): $905,929
- 2019 (July 2018-June 2019): $946,151
- 3-Year Average Cash Flow: $1,002,612
- A/R: $389,990
- A/P: $13,000
- Working Capital: $376,990
Assets of Business
- Assets: $1,561,720
- Equipment: $496,529: Generators, hand tools, computer equipment, camera equipment
- Vehicles: $1,042,916: 2 CCTV trucks, 3 cleaning combo trucks, 4 pickup trucks
- Furniture & Fixtures: $22,275
- Intangible: Well-established in the industry, long-standing client base
Cash Flow Analysis
| Description of Financial Statement | P&L Statement March 2020-Feb 2021 | Tax Return July 2019-June 2020 - Accrual | Tax Return July 2018-June 2019 - Accrual | Tax Return July 2017-June 2018 - Accrual | Tax Return July 2016-June 2017 - Accrual | Notes |
| TTM | 2020 | 2019 | 2018 | 2017 | ||
| GROSS SALES | $2,087,431 | $2,360,891 | $2,230,416 | $3,005,813 | $2,182,201 | |
| Net Income Shown on Financial Statement | $-317,304 | $24,809 | $13,557 | $43,489 | $73,632 | |
| ADDBACKS | ||||||
| Compensation to Owner | $230,981 | $507,692 | $571,846 | $524,308 | $516,923 | Owner |
| Other unrelated salaries | $541,442 | $224,615 | $224,615 | $120,000 | $120,000 | Owner's wife: office admin |
| 11% Tax on total W2 Salaries | $84,979 | $55,846 | $87,611 | $70,874 | $70,062 | |
| Depreciation | $123,010 | $11,725 | $431 | $528,137 | $49,081 | |
| Interest | $4,866 | $10,433 | $14,854 | $2,583 | $0 | |
| Contributions/Donations | $10,256 | $2,766 | $0 | $250 | $40 | |
| Cell Phone | $3,600 | $3,600 | $3,600 | $3,600 | $3,600 | $300/month |
| Pension & Profit Sharing | $0 | $158,138 | $122,656 | $118,746 | $127,649 | 97% Personal |
| Meals | $0 | $1,305 | $1,981 | $0 | $0 | |
| Replacement 1 | $-25,000 | $-25,000 | $-25,000 | $-25,000 | $-25,000 | |
| Replacement 2 | $-70,000 | $-70,000 | $-70,000 | $-70,000 | $-70,000 | |
| Holiday/Vacation Expense | $60,000 | $0 | $0 | $0 | $0 | |
| Long-Term Health & Disability Insurance | $6,095 | $0 | $0 | $0 | $0 | |
| Covid Cost | $12,716 | $0 | $0 | $0 | $0 | One-time cost |
| Bonuses | $306,000 | $0 | $0 | $0 | $0 | Family Members: Non-onward going |
| Rent Adjustment | $23,135 | $0 | $0 | $0 | $0 | $6,278/month onward going |
| Qualified Retirement Plan | $160,981 | $0 | $0 | $0 | $0 | 97% Personal |
| TOTAL ADDBACKS | $1,473,061 | $881,120 | $932,594 | $1,273,498 | $792,355 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $1,155,757 | $905,929 | $946,151 | $1,316,987 | $865,987 | |
| Profit Margin | 55.37 % | 38.37 % | 42.42 % | 43.81 % | 39.68 % |
Valuation
Funding Example
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857