Cost Reductions Allow Recapitalization


Annual Sales



Quality Wood Products, Kansas City MO


Custom cabinet manufacturer. Sales of $14 million. Bank Debt of $5 million.170 employees. Serving new home construction and remodeling.

  • Company was acquired near peak of home-building market.
  • New owner/manager, a father and son team, did not have meaningful industry experience.
  • As the housing market began a dramatic decline, revenues fell from $20 million to below $14 million
  • Highly-leverage balance sheet soon became over-leveraged, management was not effecting change in cost structure.
  • The company began defaulting on senior debt covenants.


  • MorrisAnderson hired as Financial Advisor and provided an initial assessment that delivered the “facts” to the lenders, including a rolling 13- and 52-week cash forecasts and a recommended work plan.
  • Executed the work plan to reduce fixed costs, optimize working capital, and implement a reporting process.
  • Solicited prospective sources for re-financing and worked closely with sub-debt lender for solutions.


  • Reduced fixed cost structure and working capital, re-aligned organizational duties and management responsibilities.
  • Increased cash conversion cycle by reducing inventory and working closely with customers and vendors.
  • Further decline in the industry and economy resulted in continued challenges with (a) financial performance and (b) refinancing.
  • Due to implementation of work plan, combined with reliance on the reporting implemented by MorrisAnderson, the senior lender continued to forbear.
  • Ultimately the company was able to recapitalize with its sub-debt lender executing warrants which initiated a change in ownership and allowed a recommended change in management to occur.