Case Studies

Operational & Financial Control Improvements Allow Refinancing

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

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Home·Operational & Financial Control Improvements Allow Refinancing

The Situation

Halloween Costume Company. $14 million in sales. $5 million debt.

  • Design and Source Products from China.
  • A Competitive Market where a couple of large companies dominate the industry, especially for licensed products.
  • The Company $1.5 million out of compliance on the Borrowing Base.
  • The Management Team is not getting along and is becoming a distraction for employees.
  • No accounting discipline is used, and an outsourced controller is not providing the guidance necessary.
  • High concentration issue with 2 customers representing 50% of the business.
  • Inventory is too high.
  • No leadership.

How We Advised

  • Created budgets and cash flow to demonstrate to the bank the cash requirements necessary to succeed in seasonal business and to pay back loans.
  • Began aggressive refinancing campaign.
  • Refocused the sales team on additional customers.
  • Reorganized leadership around the owner of the company and provided guidance on management for a very creative individual.
  • Created a budgeting and costing discipline to allow better responses to customers.
  • Began resourcing campaign to diversify vendors.
  • Refinanced loans with a new lender after receiving multiple term sheets.
  • Created loan documents that assisted the company through seasonality issues.
  • Worked with Vendors on supporting the company during the restructuring and negotiated extended terms with vendors.
  • The owner became more involved with overseeing the business and not just the creative aspect.
  • Hired a full-time Controller who has added accounting discipline.
  • Hired new VP of Ops to oversee distribution and sourcing.

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. 

 

> Debt Restructuring Services 
When a company is in financial distress, our Strategic Advisory experts design and implement debt restructuring and refinancing strategies tailored to the company’s unique circumstances. We help middle-market businesses stabilize operations, improve liquidity, and optimize their capital structures. 

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