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National Branded Fabricator and Equipment Dealer

Turnaround, Asset Monetization, and Company Re-launch

A leading U.S. manufacturer of food service and retail fixtures and dealer of related equipment was experiencing a crisis and possible liquidation attributed to plummeting sales and EBITDA coupled with rising costs due both to self-inflicted wounds and a recession. The Company had a challenging governance structure, with an independent Board of Directors and multiple lenders, who were also the shareholders. EGI was hired to complete a comprehensive assessment on both a top-down and bottom-up basis. EGI's assessment clearly delineated all aspects of the available options, including: a cash-neutral liquidation, a divestiture estimated at $10 to $12 Million, and a turnaround to re-launch and save the Company. The turnaround scenario was predicated on specific courses of action and included investment, ROI, and projected terminal value metrics.

The turnaround alternative was selected by the stakeholders as part of a strategy to better position the Company for an exit strategy at maximum value and EGI transitioned from an advisory role to that of interim management, ultimately providing a CEO, CFO, Vice President Sales and Marketing, and Vice President of Engineering. While serving as the interim C-level team, EGI divested a mothballed plant for well over $1 Million, achieved $200,000 in risk management savings, and reviewed and overhauled all critical business processes of the Company while effecting a cultural shift throughout the organization to create a platform for the Company re-launch for long-term growth. Examples of business critical actions by functional area implemented by EGI included:

  • Sales and Marketing - Provided a vision and value statement as well as a filter for pursuit of growth opportunities. Upgraded the sales team by replacing 30% of staff. Emphasized the importance of customer face-time as well as analysis and metrics to manage by the numbers. Made new accounts a top priority. Successfully implemented sales contests to drive performance, energy, and results.
  • Engineering - Upgraded personnel and implemented new software platforms to improve engineering and manufacturing productivity, material utilization, and reduce errors.
  • Manufacturing - Wrapped up the closure of satellite plant and office relocation to centralize all operations at the flagship operation. Introduced both an independent quality department and an industrial engineering function. Implemented a master schedule that encompassed sales, engineering, manufacturing, and shipping. Reduced material consumption and managed labor as a variable cost. These actions quickly and dramatically improved gross profit.
  • Finance - Renamed the Finance Department to Business Intelligence to reflect its new role of providing meaningful, actionable reports with recommendations and proactive intervention.
  • IT - Developed a corporate systems strategy and more specifically, implemented short-term payback tools such as a spreadsheet to provide capacity planning, a spreadsheet to specify manufacturing man-loading. Streamlined and optimized all business systems in conjunction with implementing Lean office.
  • Human Resources - The single most important success was effecting a cultural shift to produce an environment of empowerment and entrepreneurship. Introduced a bonus system that provided a sharp focus and common goal.

Over a 12 month period under EGI's management, the sales run rate was increased from $55 Million to over $70 Million, while the gross margin was improved by five points, with an EBITDA plan in excess of $3 Million and a projected terminal value of $30 to $35 Million. EGI then participated in the recruitment of a new management team from within the industry to take the Company to the next level based on the platform that had been effected by EGI.