Executive summary
EBITDA bridge – reported to adjusted
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Overview
Meridian Mechanical Services is a Fort Worth-based commercial HVAC and mechanical contractor with three revenue streams: recurring service and maintenance contracts, fixed-price projects and installations, and parts and controls. Revenue grew from $13.5M in FY2024 to $15.6M in the trailing twelve months ended June 30, 2026, with gross margin expanding from 35.2% to 36.5% as the service mix increased.
Management presented adjusted EBITDA of for the TTM period. Our diligence supports . The difference is driven by four items management did not present: rent paid to an owner-controlled entity is below market, three fixed-price projects were over-recognized at June 30, a run-rate warranty accrual is required, and the Bexar County ISD contract lost in May 2026 should be removed from all periods on a pro forma basis. We also identified one additional add-back in the buyer's favor (the owner's spouse on payroll).
Net working capital averaged over the TTM period; the June 30 balance is seasonally high and we recommend a peg based on the TTM average of the adjusted balances. Net debt and debt-like items total at June 30, of which deferred revenue on prepaid maintenance contracts is the item most likely to be negotiated.
Key findings
Ranked by impact in the selected period. Click to open.
Adjusted EBITDA
Amounts in $000s · Increases shown positive, decreases in parenthesesImplied enterprise value sensitivity
Adjusted EBITDA for the selected period and scenario × multiple. Illustrative only; a valuation opinion is outside the scope of this report.
Income statement
Expand any line to see the accounts, vendors or customers behind it, and then the sample transactions traced during fieldwork. Adjustments reflect the scenario selected above.
Revenue & margin
Monthly, all 30 monthsRevenue by segment and gross margin
Observations
Service & Maintenance is of TTM revenue and carries the highest margin (~40% at the gross level). Contract renewals were 91% by count over the last two renewal cycles, excluding Bexar County ISD.
Project revenue is lumpy and concentrated: Cook Data Centers and Alliance Gateway Industrial together represent of TTM project revenue. Project backlog at June 30 was $4.1M (management schedule, tested to signed contracts).
Seasonality is pronounced. June through August generate roughly a third of annual service revenue, which is why a June 30 balance sheet shows elevated receivables and why we peg working capital on a TTM average.
Customer concentration
Selected period. Expand a customer for segment mix; sample invoices shown where traced.
Net working capital
Month-end balances · $000sReported and adjusted NWC, with proposed peg
Peg recommendation
We recommend a peg equal to the TTM average of diligence-adjusted NWC. The June 30 balance sits above the average because of summer service billing; a peg set at the closing balance would overpay the seller by the seasonal swing. Diligence adjustments reduce reported NWC for AR over 90 days without documented collection plans, the contract-asset overstatement in D2, and accruals for warranty and bonuses (D3, D4).
Net debt & debt-like items
As of June 30, 2026 · $000sProof of cash
FY2025 · Revenue to bank deposits · $000sWhat this tests
A proof of cash reconciles revenue recorded in the general ledger to cash actually deposited in the bank, after allowing for the change in receivables, sales tax collected, non-cash write-offs, and deposits that are not revenue (line of credit draws, insurance proceeds). It is the most direct test that reported revenue is real.
For FY2025 the unreconciled difference is , or of expected receipts, which is within our tolerance. The remaining difference is consistent with timing of December deposits in transit.
Disbursements were tested separately: 100% of payroll runs and 92% of vendor disbursements by dollar value were agreed from the bank statements to the general ledger.
Basis of preparation & scope
Sources. Unaudited monthly financial statements from Sage Intacct (Jan-2024 through Jun-2026), ADP payroll registers, Frost Bank statements, the job cost ledger and WIP schedules, customer contracts, and interviews with the owner, controller, and two project managers. FY2024 and FY2025 financial statements were reviewed (not audited) by Whitley Penn.
Procedures. We analyzed revenue and margin by customer, segment, and job; re-performed percentage-of-completion on all open fixed-price jobs over $100K; reviewed vendor-level general ledger detail for every operating expense account; tested a proof of cash for FY2025; and reviewed the balance sheet for unrecorded liabilities and debt-like items.
Limitations. This report is prepared for Keystone Facility Partners in connection with its evaluation of the Company and does not constitute an audit, review, or valuation. Figures are presented in thousands of US dollars unless otherwise stated. Adjustments labeled "Proposed" have been shared with management and, where noted, are disputed.
About this sample. The company, people, customers, vendors, and figures in this document are fictional and were generated to illustrate the structure and depth of a Till CFO quality of earnings report. Any resemblance to a real company is coincidental.