MorrisAnderson Cost Reductions Stabilize Company

Challenge

---

Processor of paper products made from recycled materials. $ 250 million in annual revenues. $ 150 million in debt.

---

• Company was in violation of all loan covenants following several years of severe operating losses
• Liquidity crisis was impacting the day-to-day business operations and performance
• Significant possibility of losing financing due to the company’s under performance and uncertainties in the paper markets.

Solution

---

• MorrisAnderson (MA) was retained by the State of Wisconsin Investment Board (SWIB) to perform a business viability assessment.
• Prepared comprehensive business plan assessment and operational and financial review of core business model and the assumptions driving projections.
• Identified over $3 million of direct and indirect annual cost reductions.

Results

---

• Business plan valid based on analysis conducted by MA team.
• Cost reductions identified by MA team combined with validation of business plan resolved lender concerns and reestablished banking relationships preserving all existing borrowing.
• Management able to return the company to profitability while meeting all obligations.