Eliminated Loan Over-Advance so Company can Grow Again

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Challenge


  • Company caught in liquidity growth caused crunch
  • $1.6 million EBITDA
  • $1.5 million annual interest expense
  • $.5 million minimum principal payments
  • $150,000 A/P with 30-day maximum terms
  • $(1.3) million loan over-advance position

Solution

  • Build a 52-week cash forecast
  • Secured additional supplier credit terms
  • Explored purchase of needed key asset (gang saw) to increase sales, lead times and reduce payroll

Results

  • Generated $435,000 additional liquidity by extending terms with selected suppliers to 45 and 60-day, increasing A/P to $585,000
  • Funded purchase of gang saw via additional supplier liquidity
    -$2 million additional sales
    -$.4 million additional EBITDA
  • Provide additional working capital to grow the business by negotiating increased advance rates on inventory in drying yards
  • Helped management restructure the business to allow for continued growth

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