Out of Court Liquidation / Turn Around
A North American Distributor, which had experienced rapid growth, had run out of cash and recorded its first loss in its 32-year history.
- Cash Flow was critical.
- The business was failing rapidly.
- The lending institution was calling in the loan.
- A/R DSO had climbed to 65 days.
- Inventory DOH had climbed to 70 days.
- Operating expenses were 95% fixed.
- 250 of over 2,000 SKU’s comprised 85% of its sales.
- A customer segmentation analysis showed 90% of its revenue came from 10% of its customers.
- A complete assessment of the organization was completed.
- A complete turn-around plan was implemented.
- Existing personnel were upgraded.
- A telemarketing sales initiative was launched.
- The revolving credit facility was negotiated with a new lending institution.
- Leases were terminated, facilities were sold, and warehouses were consolidated.
- A business that was not part of the core competency of the business was divested.
- Expenses were reduced by 45%.
- Headcount was reduced by 50%.
- DSO was reduced by 17 days.
- DOH was reduced by 25 days.
- Debt levels were reduced by 70%.
- $20 Million of free cash flow was produced.
- The balance sheet was restructured and the company was positioned to sell.
- Shareholder value was maximized by the sale of the company.
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