Case Studies

Turnaround of Construction Supplier

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The Situation

  • A construction supplier caught in liquidity growth caused a crunch.
  • $1.6 million EBITDA.
  • $1.5 million annual interest expense.
  • $0.5 million minimum principal payments.
  • $150,000 A/P with 30-day maximum terms.
  • $(1.3) million loan over-advance position.

How We Advised

  • Built a 52-week cash forecast.
  • Secured additional supplier credit terms.
  • Explored purchase of needed key asset (gang saw) to increase sales, lead times, and reduce payroll.
  • Generated $435,000 additional liquidity by extending terms with selected suppliers to 45 and 60-day, increasing A/P to $585,000.
  • Funded purchase of gang saw via additional supplier liquidity.
    • ($2) million in additional sales.
    • ($0.4) million additional EBITDA.
  • Provide additional working capital to grow the business by negotiating increased advance rates on inventory in drying yards.
  • Helped management restructure the business to allow for continued growth.

Key Contact

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

Related Practice Areas

> 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. 

 

> 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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