Outdoor Power Equipment Manufacturer

Company Overview



Outdoor Power Equipment Manufacturer - a $250 million outdoor power equipment manufacturer with  multiple plants whose products are sold through various channels including domestic dealerships, an international distributor network, and direct to large retail customers.

Engagement Overview
•  The Company had incurred net losses for three years while continuing to increase sales and dealer locations throughout the US.

•  The growth generated increased inventories which, combined with losses, resulted in significant increases in the Company’s borrowings from it’s multi-bank lending group.

•  Fort Dearborn worked closely with management to develop a detailed comprehensive business plan.

•  Strategic, tactical and financial in nature, the business plan was used not only as a management action tool but also as the Company’s “story” during its refinancing efforts.

•  While management had already begun to implement lean manufacturing and cost containment efforts, FDP identified additional expense reductions which focused on inefficient spending in parts purchasing, elimination of the second shift and other operating expenses.

•  Fort Dearborn also assisted management with the evaluation of facility consolidation, preparation of a formal competitive analysis, and profitability by Channel and Customer.

•  Interaction between Fort Dearborn and management fostered improved financial discipline and accountability within this large family-owned business, particularly in the areas of market direction, product introduction and working capital investment and management.

•  Planning discussions highlighted the need for management changes, driving senior management to make difficult personnel decisions.

•  The result - The Company successfully refinanced its credit facility, gained access to additional capital, and the lead lender remained as the lead financing source for the Company’s new, larger credit facility.

Results
•  Fort Dearborn was instrumental in helping the Company return to sustainable profitability and increase its line of credit facility which allowed the Company to implement its growth strategy and meet its current and long-term capital needs.

•  Additionally, over the next two years, the Company reduced its operating expenses by several million and dramatically improved its inventory turnover.

•  Interest from several lenders resulted in multiple proposals and competitive pricing on the new credit facility.