Case Studies

Operations & Financial Advisory for Plastics Injection Molder

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

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Home·Operations & Financial Advisory for Plastics Injection Molder

The Situation

Plastics Injection Molder. Sales declined from $262 million in 2007 to $182 million in 2009. $130 million debt.

  • The gross margin declined from $31 million to $16 million over a two-year period.
  • EBITDA declined from $24.2 million to $4.2 million during the same period.
  • The reduced demand for automotive and construction structural plastic injection-molded parts, fueled by the recession, severely impacted margins and EBITDA.
  • Most of the $30 million transfer work from key customers was single-digit or negative margin work, which was inadequate to support the fixed operating expenses.
  • Utilization fell to under 60% at the three smaller plants and ranged from 30% to 50% at the two primary plants.
  • The company lost critical mass and economies of scale following the decline in automotive volumes.

How We Advised

Our experts served as operations and financial advisors to validate the company’s business plan and projections, implement cost-saving initiatives, and identify additional restructuring opportunities.

  • We determined that the business model was sound but was dependent on the successful implementation of cost reduction initiatives and successful price increase negotiations with the OEMs.
  • Our team confirmed that the cost reductions were realistic and being implemented.
  • With our support and counsel, management successfully negotiated price increases that provided adequate margins to operate the business profitably.
  • With our team’s help, the company projected cash flow to be sufficient to fund operations.
  • The company reduced annual costs by over $6 million.

Key Contacts

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

 

Mark J. Welch, CPA, CTP 
Senior Managing Director 
Strategic Advisory Practice 
+1 412 498 8258 
[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. 

Our Experts