The Company had under- performed for the past few years, in terms of profitability and fleet utilization, and was overleveraged relative to its operating cash flows.
Due to its inability to meet forecasted results and other covenant violations, the senior lender had increased interest rates and was reducing collateral availability. Debt with other lenders was also in various stages of default.
Fort Dearborn identified specific opportunities and assisted in the immediate implementation of several profit improvement actions including: Eliminating unprofitable contracts to increase linehaul rates per mile; reducing tractor maintenance costs through improved fleet management; developing a fleet reduction plan; reducing the number of terminals and repair facilities; and reducing various other operating costs.
Fort Dearborn also worked with management to develop short and long-term strategic plans and upgrade their management team.
Based upon the improvement in performance, Fort Dearborn assisted the Company in refinancing its senior credit facility and other debt agreements resulting in the closing of a $35 million new loan facility.
The new lending arrangements provide for additional growth capital, reduced borrowing costs dramatically, reduced collateral monitoring and reporting requirements and reduced the number of lenders from fifteen to three.