On this pageCommand Quality of Earnings 13-Wk Cash Covenant Runway Cash Unlock Recurring Receivables M&A & Supply

CFO — Finance, Cash & Capital

Quality of earnings, 13-week cash, covenant runway, working-capital unlock and the value levers behind the PE thesis.

Pavion · FY26 (modeled)

#4 SDM Top Systems Integrators (2025)

2,800 employees · 70+ US sites · 23 countries

▲ Executive read· the answer, then the moves

Liquidity of $132M (≈ 7 weeks of cover) and $151M of deal capacity make capital the lever, not the constraint. Free the trapped cash first: normalizing DSO to 48d releases ≈ $12.9M and clears $19.1M of overdue receivables.

8 of 8 headline metrics improving vs prior · still off target: Adjusted EBITDA $116M vs $120M, Adj. EBITDA Margin 14.8% vs 16.0%, Net Debt / EBITDA 4.2x vs 4.0x

Do now — ranked by urgency

1
Staples credit exposureAct now
Why it matters
Move to credit hold pending paydown; reforecast ARR net of likely churn.
What's driving it
Overdue AR
Signal: Alert
FYI
Distress filings + overdue AR; churn risk High on $6.4M account.
Act →▤ open the overdue book
2
Covenant headroom 0.9× (lev 4.6× vs 5.5×)Act now
Why it matters
Sets deal capacity and refinancing risk.
What's driving it
Q1 (act)
Signal: Threshold
FYI
Net-debt/EBITDA 4.6× against a 5.5× ceiling.
Owner: CFO · Treasury
Act →
3
Pull working capital — drive DSO 54→48dWatch
Why it matters
Closing the DSO gap releases ≈ $12.9M of one-time cash; $19.1M is already >60 days overdue and at collection risk.
What's driving it
DSO 54d vs 48d target
Overdue (>60d) $19.1M of $116M AR
FYI
Brand-level unlock to a 50d stretch ≈ $8.5M
Owner: Treasury
Collect →▤ open the overdue receivables
4
3 brands running DSO > 65 daysWatch
Why it matters
Targeted collections sprint on $0.9M; tighten milestone billing on ISC projects.
What's driving it
DSO
Signal: Alert
FYI
ISC (67d), Signet (66d), Staples account (67d) lifting blended DSO.
Act →▤ open the overdue book

Adjusted EBITDA

$116M

+26% YoY · 14.8% margin

Liquidity

$132M

≈ 7 weeks of disbursements

M&A deal capacity

$151M

≈ $15M EBITDA @ ~10x to 5.5x

Working-capital unlock

$12.9M

DSO 54→48d target

Quality of earnings

Reported → Adjusted EBITDA

$24M of add-backs (21% of adj.) — the diligence-grade walk.

Driver bridge

EBITDA — prior to current year

Organic vs. acquisitive vs. price/mix vs. cost.

Treasury

13-week direct cash flow forecast

Above minimum

Net weekly cash (bars) and ending cash (line) vs. $20M minimum. Forecast trough: $28.7M.

$34M

Opening cash

$244M

13-wk collections

$241M

13-wk disbursements

$37.1M

Closing cash

Capital structure

Leverage runway vs. covenant

Net Debt/EBITDA deleveraging path against the 5.5x covenant ceiling.

Headroom = firepower

Deal capacity

Net-debt capacity to 5.5x

$151M

≈ $15M acquirable EBITDA @ ~10x

Net Debt / EBITDA4.2x

Covenant Headroom1.3x

DSCR1.8x

Free Cash Flow$48M

Where the cash is trapped

Working-capital cash unlock

$8.5M opportunity

Normalizing laggard brands to a 50-day DSO releases ~$8.5M of one-time cash.

Integrated Security & Comms (ISC)67d

$1.9M

RFI Enterprises61d

$1.7M

AFA Protective Systems56d

$1.6M

Signet66d

$1.3M

ECD Systems60d

$1.0M

Firecom58d

$0.7M

DavEd Fire Systems54d

$0.2M

Concentrated in newer cohorts (ISC, Signet, RFI) where billing discipline lags integration — the fastest cash win this fiscal year.

Revenue quality

Recurring engine & margin

Annuity growth and where EBITDA is generated.

ARR (Recurring)

$314M

▲ 19.8% vs priorTarget $330M

Recurring Revenue Mix

40.0%

▲ 8.1% vs priorTarget 45.0%

Net Revenue Retention

106.0%

▲ 2.9% vs priorTarget 110.0%

Gross Revenue Retention

94.0%

▲ 2.2% vs priorTarget 95.0%

Annuity engine

ARR bridge

Trend

ARR growth

By business unit

EBITDA margin

Collections

AR aging

Total AR $116M

Current days$54.5M

1-30 days$29M

31-60 days$13.5M

61-90 days$9.8M

90+ days$9.3M

Overdue (>60d) = $19.1M at collection risk.

By account

Receivables & credit watch

Accounts ranked by DSO and credit/churn risk.

Account	Revenue	DSO	NRR	Credit/Churn
Staples	$6.4M	67d	97%	High
Kaiser Permanente	$12.9M	63d	104%	Medium
American Petroleum Institute	$4.1M	59d	100%	Medium
Bloomberg	$14.2M	58d	112%	Low
Align Technology	$7.2M	55d	105%	Medium
IBM	$9.7M	52d	101%	Medium
UPS	$11.3M	49d	106%	Low
FedEx	$18.6M	47d	108%	Low
Oracle	$16.1M	44d	119%	Low
VeriSign	$5.8M	41d	110%	Low

M&A

Acquisition cohort economics

EBITDA uplift, DSO normalization and synergy realization (as-acquired → current).

Brand (cohort)	Acq.	Revenue	EBITDA %	DSO	Integration	Synergy	Status
Firecom	2021	$34M	9→14%	71→58d	100%	92%	Integrated
DavEd Fire Systems	2021	$22M	8→13%	66→54d	100%	90%	Integrated
AFA Protective Systems	2022	$96M	11→16%	68→56d	95%	88%	Integrated
RFI Enterprises	2023	$58M	10→13%	70→61d	82%	74%	In progress
Integrated Security & Comms (ISC)	2024	$41M	9→11%	73→67d	60%	55%	In progress
ECD Systems	2024	$37M	9→12%	71→60d	80%	78%	In progress
Signet	2024	$29M	8→9%	69→66d	45%	40%	Early

Supply

Supplier terms & risk

Partner spend, DPO (working-capital lever), delivery and risk.

Supplier	Category	Spend	DPO	OTIF	Score	Risk
Axis Communications	Video Surveillance	$64M	45d	96%	91	Low
Honeywell	Fire & Access	$58M	42d	93%	88	Low
Motorola Solutions	Critical Comms	$41M	38d	90%	85	Medium
Hanwha Vision	Video Surveillance	$27M	36d	89%	83	Medium
Milestone Systems	Video VMS	$23M	40d	95%	87	Low
Crestron	AV / Collaboration	$19M	44d	92%	86	Low