Improved Performance Allows for Refinancing

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.

Daniel F. Dooley

Dan Dooley, CTP, is a Principal and CEO at MorrisAnderson based out of Chicago. He has a strong national reputation in crisis management, operations improvement, debt refinancing/restructuring and C-level positions. He is a frequent speaker at industry conferences and a regular author for industry periodicals. Dan has served on the Board of Directors of both… Read More