In this episode we finish the series we started to help prepare folks for the ESOP site visit. The focus of the episode is to understand in covering first the financial highlights and how they connect to points you will want to make with the trustee and their valuation firm. In addition to the financials - the remaining part of the presentation will be to cover the ESOP deal structure and anything specific to the transaction.
In this episode we finish the series we started to help prepare folks for the ESOP site visit. The focus of the episode is to understand in covering first the financial highlights and how they connect to points you will want to make with the trustee and their valuation firm. In addition to the financials - the remaining part of the presentation will be to cover the ESOP deal structure and anything specific to the transaction.
[0:10] Hello world this is the theesopguy hopefully you're having wonderful.
Weak wherever you find yourself in tuning in today on our journey to an ESOP.
[0:21] We're going to kick off with this and hopefully explain what this means tax-free tax-free IRS can't touch one cent.
[0:31] Do the SMART Banker would kill his wife aren't you why should I believe a smart Banker like you what end up in here with you it's perfectly legal guy CRS the sin the same thing.
Actually I feel stupid telling you this.
[0:44] So what this episode is going to be about even though that sounds like it's about the tax-free nature of Aesop's is more about explaining the.
Ins and out of your ESOP site visit so in this case we are exploring that topic.
As it relates to, understanding the financial highlights and also the potential transaction itself with the trustee and the valuation firm as part of the ESOP process.
So within that process of course we have this step called the site visit and as I've talked about in the.
Previous episodes the site visit really is designed to.
[1:28] Explain multiple things that are really important to the trustee and the valuation firm primarily how the company function so we did what we did some work on the industry we did some work on the company overview last two episodes.
And in this episode is when we tie out the ESOP site visit presentation it will be really.
Focused on the financial highlights of the company and the potential transaction so as we think about this topic, I did choose Shawshank Redemption and the topic today is is really explaining financials, two other people now in the setting that we have within the site visit it's really important that this is done well and I think what what I'm trying to get to with the Shawshank.
Movie is is how obviously indeed if Reese in this movie is very very sharp Banker like he's Sharp, tax person in the bottom line is that it's important to be able to explain really clearly the financial how the financials work.
Of your business to not only the for my trustees perspective but also from evaluation person's perspective.
[2:38] And I think this is really part of understanding that this the ESOP sell-side process itself is, important in terms of who you work with as the advisor because they're going to be able to guide you through the best possible presentation not in any way to miss shape or or.
Transform your financials in a something that they're not but in order to get deeper into the financials and understand those and so what, as we talked about this topic today we're going to talk not only just about how do you how do you get into the financial highlights and didn't connect that into the transaction but getting into, the support related to the financials as well and why it makes they make sense when you get down to, the full analysis or the due diligence that the trustee and evaluation firm are going to have as always, please go to our website at journey to an ESOP.com to check out other episodes if you are new to today welcome this is actually.
Fourth in a series of episodes real regarding the ESOP site visit so you may want to go back and check out the other episodes.
[3:50] So as we start this I wanted to kind of say that in the importance if we start with the end in mind what we want to do is we want to make sure just the highlights of.
[4:02] What our goals are when we get to the section so, Canada to go back through the buildup of the presentation you know as I said we talked about the industry highlights the trends, related to the gov to the companies.
[4:17] Experience in the marketplace like where they fit in the market what's their business model who are their customers a lot of that stuff we dealt with in the first episode as we go into the depth of the company we're going to get into more in the company overview of, of how the company actually functions in the marketplace who they are, who's your team what are their business processes all of this is kind of continuing to build the stage for.
How we're going to actually explain the financial part of it, so one of the things that I would do normally in this part of the presentation is to start off with just some high level overview of the companies, Revenue.
As a whole And discussing as we've already kind of talked about the customers likely in the company overview we've already talked about the revenue probably composition.
But that's going to be important and what I mean by composition is is is first off, how much revenue if it's concentrated versus not concentrated so if it's Diversified Revenue that just means that it's.
It's in among you know multiple different types of customers what are those customers who are those customers as we talked about in the company overview and.
[5:31] When we think about the revenue the percentages are going to be important in terms of who their customers are and it could be the products and services that those those revenues.
In some cases some companies have both products and they have services so what's the breakdown of all those so the composition of Revenue is important.
[5:50] I think it's also important to dealt to delve into, as we start to think about the historical part of the financial statements is to delve into the fork the historical Revenue track like where's the company bin.
Revenue-wise of course we're thinking as we're talking through that, part of the presentation about the growth of the company so if the growth of the company over the last say five years as we start to deal with historical.
If the growth of the company has been pretty solid maybe percentage-wise from year to year or it's been.
[6:26] Up and down topsy-turvy like there's been you know hey we grew one year and we came down another year.
One of the things that we want to talk about is the story behind the revenue numbers like what does it mean like what happened.
If it's five years ago were we dealing for instance with, some some issues related to some some events that happen that we're outside of the company's control which.
Namely one of the main events that we've been talking about for the last couple of years is covid in some cases covid totally ruined revenue for some companies it just, trashed the revenue part of the company and the company was left surviving and, in those cases maybe they did survive primarily on the pp money that the government.
[7:10] I was able to provide through the banks in the the necessary means maybe the other side of that coin is the covid actually, bumped up the numbers in all these people are at home and they're buying more of this and that and so we talked about the covid bump as part of the revenue Trend in history, so there's going to be these abnormalities to revenue that were we would just say the outside forces that kind of are not normal.
To the revenue history that might have been outside of of a normal type of economic Trend that would happen.
Interesting like revenue on the revenue side to some companies have gone through this this transformation in the marketplace like because in some states they've received you know the states themselves have become economic powerhouses of the next last five years because there's been a migration of people not not a.
You know not a like.
[8:12] You know just kind of come came you know they bought you know like with covid there was a spike in say products and services that were kind of related to people being at home but another part of the trends could be that the they actually economic proposition of the geographic part that the companies in just ended up growing, so because of that permanent growth the company is now in a different level and so so the reasons behind the revenue, changes are going to be important and I'm dealing with those from an economic.
Impact as far as the actual company in the environment there are but the other part of that is to go internal so those are more external types of issues to think about with Revenue.
The internal things about revenue or going to be things like you know how is my company changing its infrastructure to meet.
The growth and the demand of our the growth of Revenue and then also to meet the demand of the work, that comes in from growing the revenue as well so I'm kind of steering towards growth but of will the same is true for other things like, you know as a company Story Goes On Revenue it could be other things that happen internally that we need to think about.
[9:24] So let's just say part of the story of as we talked about the five year history Revenue might be that the company internally.
Created a strategic plan that then funded a new sales department, funded a new marketing campaign funded a new Google search campaign or some type of specific nature.
When one of the things I look for when you see some cyst some robust growth from one year one fiscal year to another I think that you just need to start really asking the question like what really happened you know there would be you know it five years ago or last couple years what's really the source of growth and it's going to be like I said it's going to fall on the external and the internal or a combination of the both and what we are trying to do is create the history, that helps us to determine what the future is because we're what I would say about the financial highlights is we're going to have this continued build up towards what I would usually end with is the forecast.
Everything that we're doing here is has a reason why we're not wasting time by talking about, other things that they we need to be strategic about the time that we're spending here in going through it.
[10:38] So so one of the things about an ESOP transaction to is that we want.
To have a good sense for a stability a sustainable and a stable economic environment for the company.
[10:53] And we want to be realistic about what those Trends are and from a revenue perspective then there's certainly going to be as we talked about external and internal forces that will help us to contribute to it now, is it sustainable as we talk about sustainability, one of the questions that might come up from the valuation firm on the other side that represents the trustees is this let's talk about the same Dynamics like are there different people now are they the same people, you know we'd covered probably in the company overview the leadership team but What's led to their success if we talk about these internal.
These internal elements of the infrastructure that have led to more and more Revenue we need to go into as well that.
They're all they're still or we're changing those or so really when you get down to the forecasted level and sustainability level what's going to be important as if those infrastructure pieces are their part primarily the people but also the processes then one could one could also conclude that hey we're going to continue on the same path that we've been on, for other reasons so could be.
[12:00] Not only a spike in the demand for the product and services but it also is this combination of things that are happening and so we want to nail down, what exactly those two reasons why we've had the growth in the past now the other side of it I kind of don't need to say this but if you if there's been a downturn, an economic downturn and now we're in a rebound we really need to understand the downturn like what was it if it wasn't an external environment maybe there was something internal that the company did so so, the positives of the minuses and all that kind of kind of Blends into what I would say is the real Revenue story behind it and so you can see I've spent a lot of time on Revenue it's such an important element to the understanding the financial highlights and making sure, that the the detailed information has Israeli there and we're not there at the forecast yet we're going to come back to this as well.
[12:55] Now the next thing I'm going to drive into with the, good presentation is going to be dealing and now with the detail behind the income statement so what are we seeing in the historical.
Gross margin so obviously we've talked about Revenue now the composition of gross margin.
Now let me just say historically let's just say that you have a very.
Low gross margin over the last five years but it's just creeping up Jen you know genuinely speaking it's going UPS if that's the scenario good scenario by the way this really positive having more and more gross profit, something's the some reason is happening like within the financial so it's not we're not presenting just the financial numbers right if you really get what I'm saying you're going to get into the detail of the story behind the numbers.
And so let's just say the the scenario is that the company has continued to grow gross margin multiple points a year so you know to 2 percentage points and gross margin can lead to a lot more profitability.
[14:02] So it could be the only reason you have more gross margin is a couple factors right we in car increasing our ability for pricing, that we hadn't had in the past so we have pricing differentials on our on our business that we didn't have before so we'll more profitable per.
Per sale of business product or business service or whatever we have.
And then the other part of it is what we're gross margin is improving because our cost of goods sold or cost of revenues or the direct costs that were engaging in our work creating either more cost efficiencies.
[14:37] Now which to be honest in the last five years has been much more difficult because of, the inflationary pressure we've seen on on on products and services and that kind of thing so so direct costs are difficult but the it is possible to become more efficient or what one of the things that I see.
When I get into some of the details regarding the composition of Revenue and the composition of cost of goods sold is that the mix of.
Gross margin gross profit schedules.
Might be the company might be finding hey this is way more profitable we're doing less of this and more of that.
[15:20] So this is just a good bulb good thing to stop and talk about a little bit as far as potential benefits of.
[15:27] Really understanding your numbers and in some cases you know I you have to know that some companies don't dig into the details sometimes because they're so busy growing the business that they don't actually look at.
Why they're growing or what they're targeting this is a very good place to kind of look and stop and look at the details so.
If I have a whole combination of opportunities on the table as a business and I can I can now because of my analysis of.
Growth of profitability by product or service I can look at.
I know my company does way better profit-wise then the other side of the coin the Spectrum where there are may be really really razor-thin margins on some other products and services or even in some cases when you analyze profitability, across the spectrum of Prof of products and services you might find that there is even losses on some of these but.
[16:27] Again I'm trying to say this in this in a very nice way that there's some companies that don't really look at that and then they wonder why.
[16:36] They're not ever making the kind of money they should be making when you do some benchmarking and say well compared to these other companies.
But when you get down to the business strategy I've seen companies say alright well our business plan our business strategy is we're going to take some of these as lost leaders but we're going to.
You know discipline ourselves to get that up to the margin we want or we're going to cut bait we're going to get out of that.
So there's a lot of number like stories behind the number but the business strategy needs to make sense and we're having with this great opportunity to explain you know where we're going, keep again keep in mind again as we talked about the revenue side were doing a good job here of planting the seed to support, what's going to be in the forecast so both from a forecasted revenue and a forecasted gross margin which is really going to be important, so what what I said this what I've say about the forecast all the time is that history for companies does repeat itself.
[17:33] Unless there's a unless there's a change and A disruption or way of doing things that hasn't been done history does repeat itself, and so maybe there's new a new management maybe there's a new strategic plan, but those types of things need to be evidenced in a lot of ways by the historical financials to show that we're actually making progress towards that type of future, potential success and again the same thing I kind of go into the positives but on the negatives if the gross margin is declining over the night last five years.
Because you know it could be for a number of reasons could be inflation pressure on wages direct cost could be increased you know with Supply supply chain all these things can be a problem.
When we go back to the forecast if we're showing a downward Trend in our historical financials for gross margin then we need to be aware of the forecasted Trends and if we're showing a downward trend for the last five years and then suddenly in the next five years work showing a positive trend, well be prepared to explain that right we need to understand why we were and then come back and say all right this is what was happening and we addressed it and we're back on track the way we should be.
[18:49] The third area here is we're just kind of breaking out the GNA are that the income statement is the G and a expense the general and administrative expenses.
Or some people say sgna but the bottom line is our overhead expenses that the company has, created are they are that part the representing part of like the, the reality of just running a business right so you have your rent you got your marketing expenses you've got your insurance expenses and a lot of these are just fixed cost that that you're going to have to pay no matter what.
In some cases some DNA expenses are related to the Strategic plan or the growth plans of marketing expenses could be you know historically could have been, I've had situations where marketing expenses were really much higher five years ago but the company figure out a better way to mark it and didn't actually grew and the company's revenues and they were able to kind of reduce the actual marketing expenses because they did a lot of, trial and error type of things so again how we explain this is really important because we're getting at, a lot of the thoughts in the questions behind Finance the way Finance people think and the way valuation people think which is for an ESOP site visit is how we need to orient our conversation.
You know its Financial.
[20:12] Related to the valuation which is going to come down to risk itself in all of those things are kind of overlapping it's themselves in a in a, Venn diagram type of idea so you're touching on all of these things as you go through each of these topics so if G and expense is flat great if it's going down as a percentage of sales great because we're able to control more costs in what we want to say about DNA is this is the company is at that.
[20:40] You know there's some kind of point where they've really kind of leveled the G and expenses off so that all the growth of the revenue, and the gross margin that hope that hopefully is healthy can just kind of water what I would just say water fall down and become profitable.
Annette and more and more net income that is where cash flow is created and.
In some cases there's other DNA expenses that are coming like for instance we're changing the succession plan process and we're going to hire some key people that we haven't had before, that are really over head.
And in order for us to get to this this next level quote and quote that's different now that's going to help you know I mean that that's going to be important to be able to explain.
When we get into the the understanding of the how the actual.
[21:33] Really to explain how the actual profits created in the company and how that's repeated over and over again.
[21:40] So once you've got all through that you know I'd say that if again if DNA is going up you need to explain why and what's going to happen differently all of this is going to bridge into the forecast as we get there, so the other part of the the conversation behind the income statement is going to be just breaking down any any.
Other income items that that seemed kind of obviously maybe out there so normally other income can be pretty nominal but if you have things like big BPP money or E RT c-- money or things like that or big gains on Lost gains on investments and or unrealized gains those things just need to be identified and then when we get to the next part of the presentation it's just about normalizing that internet income into, cash cash flow and so when we go through the normalization discussion it's just really to Stew.
Go back through those schedules and in really looking at what's the potential add backs or deductions relative to the company and.
How do those do those make any sense so normally what we would do is just make sure that we would have some kind of schedule that ties out.
Historically those ad backs so that we can really go back and look at those now.
[22:53] The normal ones that you're going to find typically are going to be depreciation and interest and then capex so depreciation is a non-cash expense.
Interest expense because we're doing a cash read every transaction is just added back to cash flow and then Capital expenditures of just your fixed asset purchases the company has two to purchase some companies are more Capital intensive than others and, so but there's a real there's usually a relationship between obviously capex and depreciation that can sometimes be pretty pretty clothes and other times there's spikes in capex for other reasons that have happened for different purposes and then these those could potentially be normalized out as well just depends on the circumstances but not to get too hung up on all of those elements but they do you do want to really think about several things here with normalization what is what is the owner cop, going forward after the owner compensation after the transaction.
[23:53] And how would that how would that actually look at if we looked at the owner comp, being like that person is either replaceable and not really being he's being he or she's being paid possibly by the company but not necessarily needing to be paid because it's it's a, part of the company salary position but we don't necessarily have a functional, they don't they don't necessarily have a responsibility in the day-to-day things that have to be done or so if there is somebody that you're having having to hire back into the company to replace that there's going to be some kind of net differential on the owner compensation, other things could be outside of that could be the owner benefits that they have and just balancing those out as well there might be in the historical there might be some non-recurring, expenses of course p p p is a non recurring income item that has to get normalized out at a hundred percent of whatever it was.
And but there also might be some expenses that the company has.
Has been having to pay out and they're really not truly real expenses so those will be examples of.
Non recurring expenses could be like a lawsuit that company went through settled the case and did not have you know any major issue.
[25:10] So that's really the normalization there's a lot to normalization in this this episode is really not going to get too deep in that but I do want to cover that that's going to be something that will be, discussed in highlighted in the financial section of the presentation.
[25:23] The next thing I usually go through is really dick detailing the bout the balance sheet and the components of the balance sheet from a current asset long-term asset current liability long-term liabilities make sure that those are really.
Explain well over the last five years in how those Trends need to make sense as we think about the forecasted as you think about the historical revenue and the historical requirements of the company.
[25:51] Helps us to kind of also look at the debt of the company ongoing debt that the company has and, how much that that is going to continue in the future depending on now we're leveraging the company as an ESOP so so there's a those are some things I would be really focused on when we're going through the balance sheet section there might be some I like to look at the five-year Trends to just to see if there's anything that would that kind of Sparks anybody's interest related to some changes recently some of the changes were seeing on the balance sheets just because of the new accounting Provisions are the operating lease.
Liabilities that are now being put on the liability section and then there's the right of use part of the asset that's being put on so, these are just, accounting provisions and they're not really make a main dish main change in the valuation world but there are things that you have to put on the balance sheet and look at and understand as you go through it.
[26:48] So the main thing to of the balance sheet is it is understand that the transaction itself is going to have really two components to the negotiation you're going to have the Enterprise Value piece which is really representative of the cash flow value of the business, it says we as we go through valuation episodes we always talk about the process of doing the forecast and create a discounted cash flow model but the other side of the equation is what is on the balance sheet that doesn't need to be there, which we would all call and, excessive excess working capital or in addition to that you might have this non-operating asset that could be representative of a long term asset that's not really needed so that those things need to be normalized as well and so thinking about the components of the balance sheets going to be important because it's going to set up the conversation for, what's really going to be needed in some cases there's about there's life insurance on their cash value of life insurance might be obviously canceled at the time of closing so that would add to the purchase price.
[27:52] So really the the trustee in evaluation form are going to want to understand those accounts and make sure that that makes sense if there's something in there that we have.
Um represented correctly this is why I'm going to digress for a second this is why though when you have a company that has an audit CPA independent audit report a company that has a CPA prepared reviewed financial statement.
Those are really helpful when he gets to this because it really does help to be able to nail down from an accounting perspective those the proper way to present those.
Some of the issues that come about in esab deals is because you have.
[28:34] Internal financial statements that are not generally accepted accounting principles or not under gaap and so in like I had talked about gross margin and some cases some companies don't book cost of Revenue.
Our cost of goods sold and so they put everything in direct costs and it can be confusing in some ways it's not like it's wrong and then that numbers are going to be right at the end of the day and I've certainly have not saying that that you shouldn't do an ESOP deal with you know without having it's nice to have the audit in the review as we go through this discussion because it's going to be, a lot more solid and so it's just something to kick around a little bit in terms of your advisor as you start thinking about.
Possibly doing an ESOP whether you should just go ahead and get a financial statement you know I'm not, I'm an advocate of wasting people's money but at the same time I do think it does make a better deal when you get down to it in a lot of cases we end up upgrading, the bank financing they end up wanting to get a reviewed statement so that comes as well down the road as well so it's just sometimes easier to be prepared for that.
[29:44] Once we've done with the balance once we really work to the balance sheet what we want to now do is funnel the conversation into the actual estimated required working capital.
And so what's important about this is that we're going to negotiate the target work the target required working capital and and what here's where we're going to get the opportunity to kind of show the valuation firm and the trustee how we're thinking about the working capital as.
There's multiple methods to determine what the required working capital is so my advice is just to go through that on a higher level.
And just kind of give an indication of what you're what you're thinking that's should be it does create a little bit of a good upfront dialogue I think for what could be we don't want a big surprise when it comes to working capital so if the trustee.
And the valuation firm Are anticipating a lot more working capital at least we can have the conversation early in the process and nail down the thought process behind what is the actual working capital needed for the company.
So in in that I mean one thing I'll just say about this is that this is where it gets kind of confusing for people when you get to the discuss valuation is the the buyer.
We think about fair market value the hypothetical buyer and this situation which is the Esau.
[31:04] Is buying the cash flow of the company and the cash flow is basically generated because the company has a certain certain.
Elements of resources that are all kind of in alignment right some of those are in their balance sheet.
The way it takes you know maybe the assets that they have the inventory that they have some of the equipment maybe they have all of these things work together in.
In terms of being able to produce a certain amount of Revenue that produces cash flow so the buyers buying cash flow.
And because of that they're going to need the buyers going to need a certain amount of working capital which is defined as current assets minus current liabilities.
To help the make sure the company is able to continue to create that cash flow.
So if that actual working capital at the time of closing is lower than the, required working capital then that purchase price is too high because the buyer is going to have to now inject more Capital into working capital to get the same amount of cash flow.
So and the opposite holds true to if there's more working capital that needs to be there then that should increase the purchase price because the buyer actually.
Getting the benefit of more working capital as part of so they would have less cash flow to have to invest so so that's why that those two those two pieces are so important in thinking about.
[32:30] So the other thing I like to do especially if I have an audit or review I like to go through the cash flow statements over the last five years and just show the operating portion of the cash flow, the in the financing and the investing activities and just run through those trend-wise and see if there's anything of course you want to do this before you do the trustee in the valuation me.
But you want to run through those and just see if there's anything really strange about what's happened in those cash flow statements.
And so that would kind of help complement some of the historical cash flow analysis you're doing through the income statement and the normalization and just make sure that that those things kind of in are somewhat in line and make sense.
[33:09] So once that's done we have set the set all of the stage for the really discussing the forecast so the forecast here.
Is I would say as we build the momentum and it's kind of the its kind of the.
What everybody's been waiting to kind of talk about and see because really when you get down to the ESOP valuation a lot of the avout a lot of the value is going to hinge around the forecasted cash flow which what we're saying is.
Is that under a DCF model thus the present value of those cash flows is what the buyers buying so.
Presenting a good forecast is really important in all of the things we just talked about in the last three episodes regarding ESOP site visit have been gearing towards, substantiating this in I kind of talked about this really at the front end with the income statement historically but it's kind of the same conversation with, the forecasted income, and so we're going to go back into the revenue and now we've built a case for the revenue going forward the sustainability that Revenue their business development plans all the things that go into creating a solid Revenue in the future.
Same thing with gross margin discussion some kind of working through this relatively quickly because I spent so much time talking about the historical but it's the same discussion but now we're just getting more in detail about why why is the forecast going to hold true.
One of the things about the forecast that you know you need to think about.
[34:36] That that's really I'd say is a standard ESOP consideration on the trustee side is going to be the question of who prepared the forecast.
[34:45] So who prepared the forecast is important because the company needs to prepare the forecast if the sell-side advisor.
In a black box prepared the forecast and told the client their client hey we're going to sell your business here's your forecast that you want to go with that's not so good for an ESOP deal because.
That means that the people that are really responsible.
For understanding number one understanding the background the company understanding the potential customers the new opportunities, if those people were not in integrally involved in the forecast then there's definitely an issue and in the same issue is like that maybe the shareholder at the top that's not that involved in all these if that person just prepared a forecast, then it's not going to have as much credibility and the valuation firm is going to have no choice but to Discount that forecast so as we go through that.
[35:38] The final part of the forecast is just to kind of go back through the same thing we talked about the income statement is just get to the through the.
Through the product the gross profit margins and the ga expenses and then just deal with net net income.
And then from there you really need to just go back through the any potential future adjustments that, you're going to find in the forecasted cash flow to get you and it could be again the change if you've if you've estimated the forecasted salaries to include the owner comp then you can just add those back into the bottom, of the adjustments if you've estimated, other things that are in the built in there that are going to be add back so you can always take those out some cases in the forecast we just adjust in the forecast for each line items for real.
Potential costs.
The other thing that helps is to try to do some kind of capital expense budget if you have a capital expenditure that significant might really really be helpful to show, what that looks like what the company is going to need in relationship to Future Revenue, so that's going to get us a cash flow line that can then be managed for the process of evaluation forms going to go through and really look at.
[36:52] What is what exactly they're going to need so with all of that we're going to kind of finish with the ESOP transaction and just go really through, Brick by Brick what is what are we really trying to accomplish with the sale and that's going to include so that there can be conversation around it the closing date if we go backwards, that's going to include whether or not we're going to have warrants and stars on the transaction that's going to include, again with the percentage of what we're actually selling are we going to have Bank financing is there only going to be seller financing.
[37:23] And so that so as we go through that really the conversation with the transaction is really kind of more of a back and forth between the trustee, the valuation firm and just to making sure they really understand the components of the deal and make sure that they feel like the they are, up to speed on all that so in with all of that we were able to kind of just start to settle in on the you know the next steps of the ESOP process which is always been always fun that the ESOP site visit to me is like the most.
Eventful part of the process because it brings everybody together in person I always think that's fun and it's also really fun to be able to talk about the company and really highlight some of the things you know in that in that meeting so, so it's really when it's done really well I think it's an integral part of the ESOP process and sets up, for due diligence in negotiation really quite well so that there's a very smooth part of the process that can happen next.
[38:23] And that's how it came to pass that on the second to last day of the job.
The convict crew the tar the plate Factory roof in the spring of 49 wound up sitting in a row at 10:00 in the morning.
Drinking icy cold Bohemian style beer courtesy of the hardest screw that ever walked the turn and Shawshank State Prison.
[38:46] Thanks so much for listening today if you do have questions go to our website at journey to an ESOP.com.
If you liked the podcast if you love the podcast share it with a friend and see if might be helpful for them if you have questions you can always go to their website journey to a nice up.com and ask those.
And with all of that have a wonderful Thanksgiving have a wonderful holiday season and look forward to our next step on this journey to an Esop