Troubled Company Assistance

I hired the wrong replacement after my long time General Manager retired.

Type of Business:

• Sub $10 million in sales Service Company in the Tourism  sector which had been in existence for decades
• Long time  and successful General Manager had recently  retired.

Problem:

• A new General Manager recently hired with experience and success as a VP of Marketing for two Fortune 500 companies, but no previous Profit Center responsibility.
• Within one year of hire, the leisure entertainment company had booked a loss in one year greater than the earnings for the prior five years.
• Company was now plagued with additional overhead, was slow to respond to the market and was losing it’s entrepreneurial spirit.

Our Solution:

• Redefined the vision and strategic focus of the company back to it’s core value proposition.
• Plotted a Turnaround Plan with defined milestones, dates and responsible parties.
• Presented a plan to creditors, negotiated and procured Turnaround financing.
• Rallied the key employees to a new strategic vision of recovery and assigned responsibilities with specific short term goals and objectives.
• Recruited and integrated a new General Manager to champion the new strategic vision.
• Implemented an improved business planning systems with key operating metrics and monthly performance reporting.

Results:

• Within 18 months the Company was restored to profitability.
• Improved oversight and control to prevent a re occurrence of a similar problem.

 

I am too small to hire strong management and my family is tired of sinking money into a Black Hole

Type of Business:

• A Sub $5.0 million in sales Specialty Manufacturer in the commercial promotion business.

Problem:

• The Company had been running at a loss for several years funded primarily by equity and credit cards of related parties, a local bank and vendors.  The related party equity and debt sources no longer wished to fund the business.  The Company was insolvent however had a great reputation in the business and was well liked by it’s customers.

Our Solution:

• We orchestrated an Assignment for the Benefits of Creditors initiating a “Friendly Foreclosure” shedding all of the unsecured debt.
• a NewCo was established with related party shareholders and all significant Assets transferred legally to the new entity.
• Operations continued in the same location and with the same name and trademarks, with minimal disruption.
• Strategic and operational assistance were provided to improve operating efficiencies.

Results:

• The Company now operates profitably as an affiliate of a larger manufacturer in the same business.
• Old Co name and business goodwill maintained.

Financial Controls / Preparation for Sale

My Company is growing too fast for me and is coming apart at the seams.  I need cash, management help, and systems now!

Type of Business:

• A privately held Consumer Products company with explosive sales that had doubled each year for the previous four years and was projected to exceed $50 million that year.

Problem:

• The company was running short of cash for working capital and had no external sources available.
• An accounting system conversion was not fully completed and the books and records were in disarray.
• Order entry systems were failing and inventory control and product costing system were non-existent.
• Shipment were late to customers.
• The company had several non-compliance issues pending with significant legal and financial ramifications pending.

Our Solution:

• Immediately generate short term cash through improved working capital management and bridge financing.
• Plotted a Turnaround Plan with defined milestones, dates and responsible parties.
• Cleared up non-compliance issues, got critical financial controls in place and financial statements current.
• Negotiated and obtained outside financing.
• Recruited and integrated new management in key areas.
• Implemented a business planning systems with operating metrics and monthly performance reporting.

Results:

• Within 24 months the company had Audited Financial Statements, new financing, non compliance issues settled, improved operating and financial controls, a new distribution warehouse and a professional management team operating to an agreed upon growth business plan.
• The company was sold as a all cash deal, representing a substantial gain to selling shareholders.  The primary shareholder was able to comfortably retire versus facing bankruptcy prior to our involvement.

 

My business continues to grow but my Financial Controls are not keeping pace.  I currently have Family and Friends running this area of the business.  What do I do?

Type of Business:

• A less than ten year old, greater than $100  million dollar in sales Industrial Manufacturer and Repair Services provider experiencing explosive sales.

Problem:

• The company was five months behind in its financial reporting to its principal lenders.
• The company was in default with its bank covenants and was in dire need of growth and working capital.
• No operating metrics or financial performance reporting existed.
• Excessive overtime and temporary overflow staffing existed in several departments.
• Family members and friends occupied key management positions that had outgrown their training and core strengths.

Our Solution:

• Set milestones and plan to implement new financial controls and month end financial close procedures.
• Designed new operating management reports with key performance metrics.
• Developed an annual operating plan with defined operational and financial goals and objectives.
• Developed new human resources plan with defined job responsibilities, training required and management voids.
• Recruited critical management talent not existent in the company.
• Results oriented pay incentives systems were developed.
• Refinanced the company’s existing lines of credit, lowered their cost of debt and improved the capitalization structure to better accommodate their business needs.

Results:

• Within months, monthly financial closes were down to within 10 working days from previously being months behind.
• Financial administration staff was reduced by over one third with no overtime.
• Interest costs on debt was reduced by over 30% by lower renegotiated rates and improved working capital management systems.
• The company more than doubled it sales and was sold to a private equity group for more than 60% of a previous offer.

My Industry is Consolidating.  If I don’t do something quick,  I will lose this business. 

Type of Business:

• A local Southern California Food Broker was doing less that $15 million in sales was struggling with rapid changes in their marketplace.

Problem:

• Both customers and competitors were consolidating rapidly in search of efficiencies needed in the supply chain.
• The company had limited access to capital due to its small size.
• The industry was highly fragmented with similar sized suppliers making it difficult to initiate a conventional “Roll Up” consolidation play.

Our Solution:

• Develop a unique “Partnership Roll Up” model that allowed the company to align itself with similar sized companies with a predefined goal of formal consolidation later.
• Strategies for back office synergies were developed an executed generating immediate synergies in accounting, information Systems, HR management, purchasing and operations.
• Continuous improvement and bench marking systems were implemented to insure best practices for the growing entity.
• Partner companies were formally merged into a consolidated company

Result:

• The consolidated company’s revenues grew to over 40 times the original company’s.
• Members of the group ultimately received over $400m in liquidity representing a 9x multiple of consolidated EBITDA.

We have had turnover and lost our direction.  We need to get this under control ASAP or we might lose funding and our Non Profit tax exemption certification. 

Type of Business:

• A Non Profit organization with a $1.0 million dollar operating budget had turnover disruption

Problem:

• Recent turnover in the Board of Directors and a key financial manager left the financials in disarray.  The prior years financial audit was six month overdue with expenses exceeding three times the original budget with no completion date in site.
• Tax compliance and stakeholder confidence was jeopardized.
• The internal financial position was recently vacated with no rehire prospects identified.
• Funding sources were at risk due to the lack  of confidence in the administration of the non profit as well as a lack of clear vision as to its future direction.
• The Board of Directors has just completed an outsourced developed strategic plan that was overly complex and budget prohibitive for implementation.

Our Solution:

• Immediately gained an understanding of the status of the uncompleted Audit and the status of the accounting books and records.
• Identified and defined the ongoing financial control support needed for the organization.
• Designed and proposed a redesigned financial control system.
• Hired an new internal Accountant and outside CPA firm under the new requirements.
• Installed a new accounting system to support timely and accurate financial reporting to the Board of Directors and upper management.
• Simplified the Strategic Plan to include an Annual Operating Budget with monthly variance reporting to management.
• Developed Board of Director oversight committee with defined objectives and scheduled meetings.

Results:

The Non Profit had newly defined financial control policies with budget controls built into the annual operating plan.  Financials were current and reported monthly under a strict close schedule.

 

I an bored with my business and want to retire but cannot find a buyer willing to pay a reasonable value for my business. All prospective buyers want a significant portion of the sales price as a deferred payout while they run the company.

 

Type of Business:

• A $9 million in sales closely held , family run business

Problem.

• The business was highly specialized in which the exiting owner played a key role in its success.  As a result he had a significant personal guarantee on bank loans that the owner did not want to carry into retirement
• All prospective buyers required to the owner to remain active in the business to insure successful transition as well as requiring a deferred payout for most of the sales price.

Our Solution:

• Identify  key management wishing to buyout the owners equity position under a deferred payout.
• Train the new management team on skills and responsibilities of the exiting shareholder.
• Hire internal and external management resources to support the new management team previously handled by the exiting shareholder.
• Set up systems and controls such that the exiting shareholder would have confidence in the financial management of the company after his exit.
• With the controls in hand, negotiated with their lender the release of the exiting shareholder from his personal loan guarantees and transferring them fully to the new management team.
• Procured new financing for a partial payout of the buyout purchase price in cash at close and cover transactions costs.

Result:

• The new management team was energized and excited about owning a equity stake in the business
• The selling shareholder now having some eggs out of his retirement basket in cash as well relieving him of a huge contingent liability from his personal guarantee on the company’s bank loans.
• Was left with a passive income as well as free time to work part time as a paid consultant back  to the business  and to pursue other business opportunities of his renewed interest.

 

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Other Examples of Financing, Fraud Investigations, Interim Mgt, ect. upon request.