• Although the Company had historically been consistently profitable, a decrease in contract manufacturing volume, coupled with significant investment in a new plant, left the company in an overadvance position with its multi-bank lending group.
• Fort Dearborn was engaged to work with management to create the first comprehensive business plan in Company history and assist in refinancing its debt.
• Strategic, tactical and financial in nature, the business plan was used not only as an action plan within the Company, but also to tell the Company’s story during refinancing efforts.
• The business plan process highlighted the need for well-managed expansion, balancing strategic goals for the future with the financial realities of a soft current business climate.
• While management had already begun cost containment efforts, additional expense reduction was undertaken focusing on inefficient spending in freight, storage and various other operating expenses.
• Interaction between FDP and management fostered financial discipline and accountability within this large family-owned business, particularly in the areas of accounts receivable, overall cash management, and the timing and performance expectations of future capital investments.
• Planning discussions also highlighted the need for management changes, driving senior management to make difficult personnel decisions that had been repeatedly delayed.
• External reporting was enhanced resulting in lenders receiving meaningful financial statements and analysis for the first time.