Company Overview
The Company is a broadline food distributor serving restaurant and food service businesses located in Wisconsin, Minnesota and Illinois.
The Company operated from 3 different facilities strategically located to serve its geographic markets.
Company experienced significant growth. However, the Company opened a new distribution facility and began experiencing a significant drain on its financial performance.
Engagement Overview
Due to loan covenant violations, the Company’s senior lender required the Company to engage an independent consulting firm.
The Company retained FDP to prepare its monthly financial forecast and 13-week cash flow forecast. In additional, FDP reviewed operations for additional profit improvement opportunities.
As a result of our review, FDP identified and implemented profit improvement initiatives in excess of $4 million annually. Initiatives focused on certain customer pricing adjustments and overhead expense reductions.
In addition, FDP performed a SKU rationalization that identified nearly 18,000 SKUs that should be discontinued due to low-activity.
FDP recommended modifications to the financing terms to assist the Company with seasonal business issues.
FDP discovered short-term liquidity issues and developed a plan to address the cash need through better vender management.
Results
FDP identified significant profit improvement initiatives that returned the Company to profitability.
FDP discovered and executed a plan to managed through short-term liquidity issues.
FDP identified a significant amount of SKUS to be discontinued thereby reducing costs to warehouse and maintain low-activity SKUs.