Case Studies
Industries: Manufacturing, General Building Construction
Primary Services: Business / Operational Assessments
Our client is one of the largest manufacturers of extruded pipe in North America with approximately $150 million in revenue derived from two plants.
The Company’s performance had been declining for over a period of years, exhibiting diminished earnings, exacerbated by covenant violations, and a loss of confidence by the senior lender. The Company relocated one of its plants a few years earlier to increase capacity and capability which was a significant contributor to its poor results. In particular, scrap rates had elevated to abnormal levels as the Company struggled with the new facility, new capabilities, and increased employee turnover. In conjunction with these operational challenges, the Company was experiencing constrained liquidity and difficulties managing its borrowing base availability.
Our experts were hired by the Company to perform an operational assessment with particular focus on the challenges and poor performance in the new location to review the liquidity and cash management processes. Using the Company’s operational data, we were able to provide insight into the operational challenges, confirm the windows of poor performance, and identify the recent progress the Company was making in addressing the root cause issues. Further, we provided a series of recommendations across both operations and finance that would both improve performance and allow continued monitoring of progress. This information was useful in regaining the confidence of the lender, and also for the company to refocus its efforts in using data-driven approaches to address performance gaps. The Company continued on a path to recovery and a restored lending relationship.
Brian F. Gleason, CTP
Senior Managing Director
Strategic Advisory Practice
+1 610 659 8118
[email protected]
> Business / Operational Assessment
Most consulting firms approach a business assessment from a purely financial perspective — our assessments provide a 360° view of a business, addressing growth drivers, profitability, and uses of capital. Along with detailed financial performance reviews and cash flow forecasting, our comprehensive Business / Operational Assessment identifies the various challenges clients encounter throughout their operations.
> Liquidity Management
For companies in distress or undergoing rapid growth, ensuring sufficient cash flow to support operations requires a methodical approach to liquidity management marked by multi-department input, cross-constituent communication, prioritization, and negotiation. Our experts apply extensive experience identifying additional sources of cash, prioritizing payments, and interfacing with vendors to ensure continued operations.
> Operational Value Creation
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