Improved Performance Allows for Refinancing
80M
Annual Sales
15M
in Debt
Wallace Hardware, Morristown Tennessee
Challenge
$80 million building products and hardware distributor. $15 million debt. Serving 9 states primarily in the Southeastern United States.
- 40% volume decline over 2 years.
- Sister company supply house putting additional strain on operations and working capital.
- Company unable to service debt and sitting on excess inventory and other non-performing assets.
- Senior lender had grown fatigued and was exploring all options to exit the relationship with the Company.
Solution
- Morris Anderson hired to develop a turnaround plan and refinance the existing senior debt.
- Morris Anderson assisted the Company in restoring positive cash flow by shrinking operations, enhancing gross margins and reducing operating costs.
- Morris Anderson turned around the company by improving cash flow, selling non-core assets and successfully refinancing the existing senior debt within a twelve month period.
Results
- Cash flow improved through enhanced gross margins and reduced operating costs.
- MorrisAnderson sourced a new credit facility while the Company was still in the midst of a turnaround.
- The previous lender was paid in full and all accounts payable brought current as a result of the refinance.
- The Company was able to avoid a forced sale/liquidation and is now well positioned with a strong financing partner.
