Company Overview
The Company is a family-owned precision machining, manufacturing and assembly company operating from several locations in three states
Company provides high-quality machined components and assemblies utilizing state-of-the-art CNC equipment to a variety of OEM customers, including Fortune 500 companies.
Engagement Overview
The Company experienced continued decline in the top line and value-added (VA) sales while incurring significant operating losses.
At the start of our engagement, management already determined at least one manufacturing location would be closed.
Upon further examination of sales and customer trends, FDP determined a second facility should be closed as well.
FDP examined equipment capacities and finalized a list of nearly 200 pieces of under-utilized equipment that would be sold in order to reduce debt and provide additional liquidity.
Both locations would be closed and sold to further payoff debt and provide liquidity.
FDP reviewed SKU performance identifying nearly 100 parts to be audited for potential price increases.
FDP reviewed casing inventory identifying nearly $1.8 million of inventory to be sold to customers in order to reduce inventory risk and provide additional liquidity.
Finally, FDP with assistance from management identified additional overhead expense reductions of nearly $400 thousand.
Results
FDP generated significant cash savings through expense reduction by closing two manufacturing facilities.
Company is expected to return to profitability in the next fiscal year. Company is expected to improve from breakeven EBITDA to $6 million EBITDA in the next fiscal year with similar sales volumes.