Plant Consolidation and Right Sizing Stabilize Company

Adplex - Rhodes

Houston, Texas

Challenge

Multi-plant printing ad specialty and proprietary artwork layout software solutions developer. $200 million in revenues. $50 million debt.


  • Revenues were dropping for several years.
  • Ad specialty market shift from print media to internet coupled with the Great Recession lead to significant volume losses at each facility.
  • Company was slow to react to volume losses, which resulted in million dollar operating losses annually and loan covenant violations.
  • There was a high probability the Company would lose their financing.

Solution

  • MorrisAnderson engaged by the Company to perform a viability assessment and restructuring plan.
  • MorrisAnderson engineered a comprehensive crisis management, turnaround, and cash management strategy to re-engineer and right size the Company.
  • Plant consolidations and corporate right sizing reduced operating expenses by over a million dollars annually.
  • Accelerated development and marketing of the Company’s proprietary layout software to augment revenues and open new market revenue generating opportunities.

Results

  • MorrisAnderson team identified cost reductions exceeding a million dollars annually.
  • Cost reductions, combined with the accelerated software development and marketing revenue program, resolved lender concerns and reestablished banking relationships, preserving all existing borrowing.
  • Management was able to return company to profitability while generating sufficient positive cash flow to service all business obligations and debt service.
  • Re-established the banking relationship with the primary lender avoiding costly re-financing efforts.