Davey Tree Flipbooks

26 | July/August 2014 The Big Picture News from Davey's corporate office. L ooking ahead to the future, expectations are high. But that won't stop employees from continuing to build upon the "extraordinary legacy" that exists at Davey. "With your support, I know this company will continue to be the institution we all want it to be," said Karl Warnke, chairman, president and CEO as he addressed Davey shareholders at the conclusion of their annual meeting. Company milestones, retirees, achievements and shareholders themselves all received special recognition during the annual Shareholders' Meeting on May 20. "We've accomplished a great deal in 35 years," Warnke said as he referred to Davey reaching its 35th year as an employee-owned company. "We have so much more yet to do; it's really exciting." As the company looks ahead to future milestones, Warnke said consistent employee ownership messaging must exist. "You cannot waiver from that message," he said. "Be consistent and steady so you can earn the respect and confidence of employees. There are opportunities here at Davey, but we expect company loyalty, continuous self-improvement and maximum effort in return." After all, the continuous, determined effort of Davey employees has proved to be the steering force behind the achievement of company goals and the potential for future successes. As Warnke says, "The company's fortunes rise and fall on employees' decisions, judgment, leadership, execution and results. And now, management and leadership is the strongest I've ever seen." FINANCIAL STRENGTH. Reflecting on 2014's seasonable start, CFO and Secretary Joe Paul is optimistic about the success of the company through the rest of the year. Although last year's cold, wet weather condi- tions, new contracts and project costs slightly set back Davey's operating income compared to that of 2012, the company continues to experience a positive revenue growth trend since the Great Recession. In fact, "2013 was a record-setting year for revenue," Paul said. Because Davey continues to grow and achieve success, the share price continues to increase. According to Paul, stock redemptions, in number and dollar amount, have particularly increased the past two years as a result of several recent executive retirements. In its 35th year as an employee-owned company, stock ownership participation continues to be strong. As of Jan. 29, Paul determined Davey has 13,969,936 shares outstanding. Active employees represent 56.3 percent of ownership. Approximately 69 percent of shares represent direct ownership while 31 percent represent shares acquired through 401KSOP Plan accounts. As share ownership increases, Davey's overall objective is this: Drive shareholder value. "We are going to earn client loyalty, improve our operating margins and maximize employee engagement," Warnke said, illustrating Davey's path toward $1 billion in revenue by 2020. "Employee ownership will remain our business model for the foreseeable future." GROWING OPERATIONS. In terms of employees, capabilities and service areas, there's no doubt growth has helped define Davey's successes in recent years. "We're focused on all aspects of growing the business," said Pat Covey, president and COO, as he highlighted three sources of Davey's recent growth: organic growth, strategic mergers and acquisitions and market expansion. "Starting up incurs time, money and getting people up to speed," Covey said. "This impacted our bottom line, but based on the first few months of this year, I feel good about us coming in where we need to be. From a cultural and talent standpoint, acquired companies add tremendous numbers and abilities to Davey's employee pool, and their ideas force the company to find new and creative solutions." One example of Davey's most recent talent expansions in the Washington, D.C. area is Wetland Studies and Solutions, Inc. (WSSI). "Until now, we didn't have Davey Resource Group or wetlands work represented in that area," Covey said. Looking ahead to purchasing the WSSI building and expanding its services, Covey says Davey now has a unique, Leadership in Energy and Environmental Design (LEED)-certified facility—complete with a green roof—to take clients and train employees along the east coast. Making Victories Happen Davey focuses on strategic growth opportunities to experience and achieve a "strong and fruitful 2014." Joe Paul presents a financial review of the company to Davey shareholders.

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