DEAL SIZE
$38,000,000
Undisclosed Client
COMPANY
Confidential
OVERVIEW
- Company’s revenue were declining dramatically due to worst downturn in U.S. automotive industry since World War II
- Company was in violation of its senior debt covenants, signed only four months earlier
- Record high oil prices significantly increased the price of resin – a key component to all of the company’s product
- Company’s vendors had placed a credit hold on their accounts and enforced cash-in-advance terms
- Frozen debt markets prohibited the company to finance new equipment required by newly-launched programs
ACM VALUE ADD
- Developed reduction-in-force plan to bring labor to optimal levels commensurate with the decline in sales
- Met in person with all key vendors to re-negotiate terms and restructure payables
- Reduced inventory at all four plants by increasing operational efficiency and maintaining constant communication with key vendors
- Developed daily and weekly flash reports for key management and accounting staff – improving communication and information flow throughout the company
- Despite a significant decrease in sales, the company maintained consistent EBITDA margins due to implementing cost-savings strategy
- Reduced inventory by $800,000 or 18.0% and reduced labor by $1.7 million or 14% during twelve month period, increasing the company’s cash flow
- Successfully developed payment strategy with all key vendors, which included deferral of payments – resulting in a reduction in payables by $2.0 million or 25.0% over a 8 month period
- Successfully negotiated an amendment to senior and mezzanine debt facilities with revised covenants
- Negotiated equipment financing deal with key vendor
