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Business Viability Assessment of Military Training Device Manufacturer

J.S. Held Acquires Clark Seif Clark, Strengthening West Coast Capabilities for Environmental Claims, Disputes, and Catastrophe Response

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Home·Business Viability Assessment of Military Training Device Manufacturer

The Situation

Manufacturer of simulation and training devices for the military. $25 million in annual revenue. Substantial growth with a $35 million backlog and $85 million in the pipeline. Over advance of $2.3 million on $7 million of debt. 175 employees. Minority-owned defense contractor. 

  • Significant growth from $0 to $25 million of annual revenue in six years.
  • The sales network produced a significant backlog of $35 million.
  • Poor financial controls created a $2.3 million over-advance situation and no funds for payroll.
  • The company faced liquidation and a potential loss of up to $7 million to the bank.

How We Advised

Our experts were brought in by the bank group to evaluate the business's viability.

  • We worked with management to develop a business plan to convince the bank to fund additional payroll costs.
  • Secured by an Income Tax refund, an outside investor put in $1 million with the bank’s consent to fund working capital.
  • A forbearance agreement imposed tight financial controls on cash use and required the company to seek additional capital, with our team guiding the process.
  • In July 2010, the company was sold to a strategic investor, and the bank was paid back 100% of all outstanding amounts.

Key Contact

Dan F. Dooley, CTP 
Senior Managing Director 
Strategic Advisory Practice 
+1 603 660 8952 
[email protected] 

Related Practice Areas

> Business Plan Validation 
We deliver integrated solutions for distressed and insolvent businesses that maximize recovery, mitigate risk, and restore enterprise value. Our experts are retained to help distressed organizations stabilize operations, protect stakeholder interests, and execute turnaround strategies. We take an operationally-focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. Our team delivers hands-on guidance and independent analysis to lenders, creditors, legal counsel, executive teams, boards of directors, and investors. 

 

> Turnaround and Restructuring Services 
Navigating the many challenges confronting a company in transition requires an operationally focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. Drawing upon decades of experience in the turnaround space, we help companies in transition identify practical strategies to improve profitability and liquidity for immediate relief, while concurrently developing and executing a comprehensive turnaround plan for long-term, sustainable value creation. 

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