From Bob’s Desk: Making Elm financially solid for years to come

By Bob Bacon

If you are a regular reader of Bob’s desk, this month’s installment should tie together my last several newsletters. I discussed the strength of the Elm leaders who will lead the company into the future. Our guiding business principals of Safety, Service, Integrity and Evolution have been better identified and communicated. The final step in “Elm 3.0” was how we make the company financially solid for years to come.

I began purchasing the company in a multi-year deal from our founder Bob Schmidt in 1995. The company was small and my personal expenses were low. This allowed me to complete the buyout and refinance the company by 2000. “Elm 2.0” was on its way.

Fast forward 24 years, the company is many times larger, it needs a lot of capital to operate and recent Massachusetts taxes now penalize successful Chapter S corporations like Elm with additional taxes. The other stockholders and I have been happily reinvesting a portion of our after-tax income back into the company every year to help it grow and evolve. Over the last 52 years, Elm has grown on average over 10 percent per year! If we all had been fortunate enough to invest $1,000 in Elm every year since 1972 we would each have more than $1.5 million invested in Elm!

Elm Electrical has been a very good investment for me and my fellow stockholders. The third piece of our company’s success is its financial strength. We wanted a way to keep the company well capitalized, reduce the negative effects of Massachusetts corporate tax burdens, allow other fellow employees the benefits of ownership and provide a means for retiring shareholders to redeem their shares. Over the next few weeks, Elm will be announcing our plan that satisfies all four of these financial objectives.

I am very hopeful Elm 3.0 can be even more successful than 2.0 and it will benefit our employees and community for many years to come.