Case Studies

Assessment & Turnaround for Writing Instrument Manufacturer

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

Read More close Created with Sketch.
Home·Assessment & Turnaround for Writing Instrument Manufacturer

The Situation

Writing instrument manufacturer (No.2 pencils). One of the oldest public companies in the US, with roots back to 1795. $100 million in annual sales. $6.5 million EBITDA. $45 million bank debt.

  • The historical educational market is in decline as big-box retailers are moving into the educational segment, and education budgets are being cut.
  • Plants are operating at 50% of capacity.
  • Inventory and AR levels are excessive.
  • Stock market cap at $4.5 million.
  • Covenant defaults occurred, and senior lenders blocked sub-debt payments.

How We Advised

Our experts were engaged to do an assessment and develop a Turnaround Plan.

  • Implemented an inventory and SKU reduction plan to improve liquidity and profitability.
  • Implemented over $1 million of layoffs and cost reductions.
  • Implemented purchasing controls and vendor management program.
  • Restarted stalled plant relocation from Ohio to Mexico.
  • Prepared to refinance the company with a planned sale one year later.
  • EBITDA improved by $3 million to $9.5 million run rate.
  • The company was refinanced as a bridge to eventual sale.
  • The company was sold with Shareholders receiving $18 million, over $13.5 million more than the likely overhauled market capitalization when our experts arrived.

Key Contact

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

Related Practice Areas

> 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. 

 

> Solutions for Distressed Situations 
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 Experts