Asset heavy dedicated truckload logistics

Company Overview

Trucking company with approximately $95 million in revenue, that operates with an owner-operator driver base utilizing approximately 400 trucks, 785 trailers focused primarily on dedicated truckload east of the Mississippi river.

Enagement Overview

The company experienced it first operating loss due to the underutilization of newly acquired equipment. The company also obtained its first financial audit (financials previously were reviewed), resulting in adjusted financials that took the company from a profit to a loss for the fiscal year.
During this time period to fund the operational cash loss the company had been drawing funds from its line of credit and had exceeded it borrowing capacity.
The company has created and was in the process of implementing structural changes to its operations in order to return to profitability. The company’s lender wanted an independent consultant to evaluate the near‐term liquidity position, financial reporting reliability and the operational improvements impact on financial performance.
Fort Dearborn created a 13 week cash forecast and worked with management to improve and clarify the company’s working capital
With the assistance of management, Fort Dearborn was able to review the companies operating strategy and verified the actions taken by the company to return to profitability.
FDP forecasted the improved results based upon the company changing insurance coverage for excess liability, a reduction in force, reduction in driver pay and a reduction in empty miles executed by management.

Results

Based on Fort Dearborn’s assessment over the Company’s financial position and prospects in the future the company began the process of being shifted from the bank’s workout department to an asset based loan with light covenants.
Within a month of the bank meeting the company and Fort Dearborn, the company had a waiver for its violation of loan covenants. A few months later the company had a new debt agreement in place.