Improving Value So Shareholders Can Exit With 4x Value

Consumer Products & ServicesPerformance ImprovementTurnarounds & Restructuring

100M

Annual Sales

45M

Debt

Dixon Ticonderoga, Orlando Florida

Challenge

Writing instrument manufacturer (No.2 pencils). One of the oldest public companies in the US with roots back to 1795. $100 million in annual sales. $6.5 million EBITDA. $45 million bank debt.

  • Historical educational market in decline as big box Retailers moving into educational segment and education budget cuts.
  • Plants operating at 50% of capacity.
  • Inventory and AR levels excessive.
  • Stock market cap at $4.5 million.
  • Covenant defaults occurred and senior lenders blocked sub-debt payments.

Solution

  • MorrisAnderson engaged to do assessment and develop Turnaround Plan.
  • Implemented inventory and SKU reduction plan to improve liquidity and profitability.
  • Implemented over $1 million of layoffs and cost reductions.
  • Implemented purchasing controls and vendor management program.
  • Restarted stalled plant relocation from Ohio to Mexico.
  • Prepared to refinance company with planned sale 1 year later.

Results

  • EBITDA improved by $3 million to $9.5 million run rate.
  • Company was refinanced as a bridge to eventual sale.
  • Company was sold with Shareholders receiving $18 million; over $13.5 million more than a likely overhauled market capitalization when MorrisAnderson arrived.