$200 million concrete commercial contractor, $65 million debt and lease obligations
- Company began incurring operating losses that cumulated to negative $5 million EBITDA.
- The defaults on loan covenants resulted with the lender accelerating the maturity of the credit facility.
- The Company had exhausted its cash resources and liquidity had no ability to refinance.
- Facing insolvency, bankruptcy was not a viable option from which the Company could recover.
- Money losing non-core businesses needed to be shutdown.
- Fixed costs, including payroll needed to be reduced.
- Non-core assets and underutilized leased assets needed to be divested.
- Cash flow needed to be managed on a daily basis, collections with long-time customers needed to be accelerated.
- Needed a plausible turnaround plan to merit loan forbearance, and an additional ten groups of secured creditors needed to support any turnaround prospects.
- Survived cash liquidity crisis by working closely with all major stakeholders.
- Developed a plan that illustrated annual budget EBITDA of positive $6 million – – an ambitious $11 million turnaround with credibility supported by the detailed bridge analysis constructed by MorrisAnderson.
- Executed on shutting down the non-core business, implemented payroll cuts and obtained fixed cost reductions.
- New policies and procedures were developed to improve management of jobs which resulted with improved gross margins within two months of implementation.
- MorrisAnderson’s rapid execution generated immediate results and earned a forbearance with the bank lender followed by concessions and support that MorrisAnderson obtained from all other secured creditors.
- Non-core assets were divested to reduce debt by $10 million and lease obligations by $30 million; go-forward leases were modified to provide near-term cash relief and installment notes were negotiated for deficiencies from divesting assets.
- The Company achieved its full-year $6 million EBITDA target within six months and, with essentially the same revenues as prior year, achieved $11 million EBITDA for full year – – a $16 million turnaround. The bank lender was refinanced in full and the Company reduced its overall debt obligations by $40 million.