A manufacturer of carbide, carbide tipped and diamond cutting tools for original equipment manufacturers and other parts suppliers serving the aerospace, automotive, agricultural and other industries.

The Company experienced declining revenues and decreased profitability, due to an economic downturn. 

While the Company implemented cost reductions to improve its operating performance, it operated with tight liquidity despite experiencing an increase in business volume as the economy improved.  Although the business was improving, the Company’s existing lender preferred to not increase its exposure or provide additional credit to fund the growth.  Additionally, the Company was operating with an interim management structure.

Fort Dearborn assisted the Company in developing strategies and tactics to improve profitability and cash flow, improve its management team and Board governance, and led the Company’s efforts to refinance its senior debt with a new bank. 

With Fort Dearborn’s assistance, the Company reduced its inventory while increasing sales by almost 20%, replaced both its interim CEO/Chairman of the Board and its CFO, and implemented sales and production profit improvement initiatives.  These efforts resulted in over $2.0 million of EBITDA improvements and over $2.0 million of inventory reductions.

With improved profitability, a stronger management team and much stronger liquidity, the Company was able to obtain a $3.0 million revolving line-of-credit and $3.9 million of term-debt facilities, providing adequate liquidity to fund its growth. 

Additionally, the new credit facility included lower interest rates, reducing the Company’s cost of capital.