Operations/Financial Control Improvements Allow Refinancing

Rasta Imposta

Runnemede, New Jersey

Challenge

Halloween Costume Company. $14 million sales. $5 million debt.


  • Design and Source Products from China
  • Competitive Market where a couple of large companies dominate the industry especially for licensed product
  • Company $1.5 million out of compliance on Borrowing Base
  • Management Team not getting along and becoming a distraction for employees
  • No accounting discipline and using an outsourced controller that is not providing the guidance necessary
  • High concentration issue with 2 customers representing 50% of business
    Inventory too high
  • No leadership

Solution

  • Created budgets and cash flow to demonstrate to bank cash requirements necessary to succeed in seasonal business and to pay back loans
  • Began aggressive refinancing campaign
  • Refocused sales team on additional customers
  • Reorganized leadership around owner of company and provided guidance on management for a very creative individual
  • Created budgeting and costing discipline to allow better responses to customers
  • Began resourcing campaign to diversify vendors

Results

  • Refinanced loans with new lender after receiving multiple term sheets
  • Created loan documents that assisted the company through seasonality issues
  • Worked with Vendors on supporting company during the restructuring and negotiated extended terms with vendors
  • Owner became more involved with overseeing business and not just the creative aspect
  • Hired full time Controller that has added accounting discipline
  • Hired new VP of Ops to oversee distribution and sourcing