Company Overview
The Company is a premier commercial millwork firm providing engineering, design, production and installation services.
The Company operates from 3 facilities in the US. Architectural Arts has 2 facilities located in Des Moines, IA and Emmetsburg, IA. All-American Millwork and Fabrication operates one facility located in Hardin County, TN. The Company employs more than 400 employees.
Engagement Overview
FDP was engaged by the Company to prepare a 13-week cash flow forecast model and assess the short-term liquidity needs of the Company.
In reviewing the customer base and outstanding trade receivables, FDP identified nearly $1.8 million of improper billings that materially misstated the financial statements and borrowing base certifications provided to the Company’s senior lender.
These discoveries led to further detailed work which uncovered a significant amount of personal expenses being charged to the Company’s credit cards
Once corrected, the Company was significant over-advanced on its line of credit with the senior lender. As a result, ownership injected additional capital into the Company to provide liquidity.
Additionally, FDP implemented significant price increases providing as well as stretching the vendor base to provide additional liquidity.
The senior lender ultimately exited the relationship without incurring a loan loss.
Results
FDP identified and corrected material misstatements in the Company’s financial reporting.
FDP identified significant short-term liquidity improvements stabilizing the Company.
The senior lender ultimately exited the credit without incurring a loan loss despite the significant over-advance.