MorrisAnderson Profit Improvement Allows Company to Refinance
250M
Annual Sales
60M
in Debt
Yesco, Salt Lake City Utah
Challenge
Electronic sign and lighting design and installation. Annual revenues of $250 million. $60 million of debt. Approximately 1,500 salaried and hourly employees in 10 locations. Operates four distinct business lines: Custom Signs, Electronic Displays, Outdoor Billboards and Franchising.
- Company experienced declining sales in two largest business lines as a result of the weakness in the construction market and overall softness in the economy.
- Additionally, operating costs were not managed and when sales declined, the Company could not easily identify cost savings in order to right size operations.
- Several restructuring initiatives failed as a result of a decentralized organizational structure.
- Financial reporting unable to capture true costs and profitability of custom jobs.
- Senior lender was fatigued as covenants were violated and Company could not produce a comprehensive restructuring plan satisfactory to the lender.
Solution
- MorrisAnderson worked closely with the Company’s senior management team to review prior restructuring initiatives, vet current business plan assumptions and assist Company in assembling a comprehensive restructuring plan to present to the lenders.
- Additionally, MorrisAnderson assisted the Company in developing a rolling 13 week cash flow reporting package to assist in managing liquidity and evaluating cash flow at each separate business line.
- MorrisAnderson worked closely with the senior lenders to evaluate alternative restructuring options including the sale of parts or all of the Company’s business and a refinancing.
- Company implemented many of MorrisAnderson’s recommendations for monitoring progress of the Company’s restructuring initiatives.
Results
- Company successfully assembled a comprehensive restructuring plan over a 9 week period and presented to its lenders.
- Company was pleased with MorrisAnderson’s assistance and guidance during the 9 week period and agreed to have MorrisAnderson stay on to monitor Management’s progress on executing its restructuring plan.
- Company was able to secure refinancing in May 2012 that paid off existing lenders 100% and gave the Company much needed liquidity to continue executing its restructuring plan and provide future growth capital.
