The Company custom designs, builds and installs material handling equipment for municipal, mining and industrial applications.
The Company was operating under tight liquidity due to:
–Operating losses/negative EBITDA; and
–Over-investment in inventory.
The Company was over-levered with nearly $13 million in secured debt, comprised of:
–$3.55 million with its senior lender;
–$6.50 million in vendor notes payable;
–$1.25 million owed to the IRS; and
–$1.34 million owed to Canada for GST and HST taxes.
The Company had profitable projects in-process and backlog had increased to roughly $30 million (up from roughly $20 million).
FDP was retained to review the Company’s financial forecast, prepare a 13-week cash flow and assist management in preparing an operating plan.
FDP and management implemented a plan to address the concerns of multiple stakeholders and secured the financing to implement the plan.
FDP worked closely with management to:
–Reduce operating expenses by approximately $1 million;
–Strategically increase parts prices and service technician rates to generate additional revenue of approximately $500,000;
–Generate additional $2 - $3 million of liquidity through inventory and accounts receivable reductions; and
–Restructure vendor notes payable, deferring roughly $1.25 million in debt service.
Company returned to sustained profitability and significantly de-levered its balance sheet.