MorrisAnderson Cost Reductions Stabilize Company

250M

Annual Sales

150M

in Debt

City Forest, Ladysmith Wisconsin

Challenge


Processor of paper products made from recycled materials. $ 250 million in annual revenues. $ 150 million in debt.


  • Company was in violation of all loan covenants following several years of severe operating losses
  • Liquidity crisis was impacting the day-to-day business operations and performance
  • Significant possibility of losing financing due to the company’s under performance and uncertainties in the paper markets.

Solution


  • MorrisAnderson (MA) was retained by the State of Wisconsin Investment Board (SWIB) to perform a business viability assessment.
  • Prepared comprehensive business plan assessment and operational and financial review of core business model and the assumptions driving projections.
  • Identified over $3 million of direct and indirect annual cost reductions.

Results


  • Business plan valid based on analysis conducted by MA team.
  • Cost reductions identified by MA team combined with validation of business plan resolved lender concerns and reestablished banking relationships preserving all existing borrowing.
  • Management able to return the company to profitability while meeting all obligations.