MorrisAnderson Successful Turnaround, Plan of Reorganization and Refinancing
60M
Annual Sales
25M
in Debt
International Technical Coatings (ITC), Phoenix Arizona
Challenge
Metal racking manufacturer for warehouses with 2 plants. $60 million revenue. $25 million debt.
- Company had significant cost issues with new plant start-up that exhausted liquidity and created bank covenant defaults
- Owner was in legal battle with his ex-partner who he recently had bought out
- Owner had used significant cash resources to fund other business ventures
- Financial function was a mess, reporting months behind, poor control of cash, and no forward planning
- Communications with bank had totally broken down
- Bank wanted to exit loan and company was forced to file an unplanned Chapter 11
Solution
- MorrisAnderson (MA) engaged as Financial Advisor and subsequently as Interim CFO
- MA got control of cash, created forward cash plan and re-opened proactive communications with bank
- MA rebuilt financial processes for timely reporting, forward planning and cost management discipline
- MA created Plan of Reorganization structure that was realistic
- MA re-opened communications between owner and his partner
Results
- Company profitability improved from break even to $8 million/year EBITDA
- MA secured $33 million in exit financing from a new lender and restructured $7 million of existing debt
- Company recruited a new CFO
- Company exited Chapter 11 with strong earnings and a capital structure that was appropriate
