Month: August 2020

Completed deep turnaround process within 12-month period, including reduction of labor costs, management of price increases, improvements in production workflows and equipment utilization; based on use of data analytics to pinpoint issues and improvements.

Completed exit financing to new lender for $17 million credit facility.

Using combined financial and operating data analytics, EMA was able to evaluate trends from comparative historical performance, and to evaluate product line and customer profitability. Customers had shifted buying patterns as pricing was increased, resulting in only 50% of pricing increases taking effect.

Labor content had increased significantly in key products even with new production machinery. The Company had focused on total labor cost and not on expected unit labor costs so while some products were produced more efficiently, the labor content shifted to other products that were not being closely monitored.

Machine downtime and changeover time was much higher than expected. To save money, management held off on upgrades and repairs which resulted in reduced throughput. Lack of proper production planning resulted in inefficient short production runs, higher material content costs, and frequent changeovers.

Served as Chief Restructuring Officer to stabilize core store operations and interim funding needs, along with cash management and preparation of business for sale.

Through turnaround efforts, created additional options for viability of the business that helped to increase the prospective sale value in 363 auction process. Scaled down the number of stores, restocked the stores with more staple and cost-effective product that improved gross margins, and ran promotions that reinvigorated store sales.

Identified alternative bidders that helped drive up the auction value. Managed bidder diligence process and assisted management with presentations and prospective business opportunities for the retail operations and separately the brand.

Served as Chief Restructuring Officer in family-owned business that included divorced founders that had spouses and children working in the business.

Turnaround process included restructuring and downsizing of operations in Michigan and Alabama to reduce overall costs, liquidating excess raw materials, managing working capital resources, and facilitating family decision making processes.

Negotiated and provided regular updates to Departments of Defense and Justice and working group of 35 states attorneys general about restructuring efforts, exiting of defense contract, and replacement vests provided to police and military personnel.

Provided replacement product across the country to police officers and military while improving operating margins.

Exited unprofitable business lines and products, while increasing prices on core products. Assisted with new sales contracts to Los Angeles Police Department and New York State Troopers.

Managed the sale process of the Company to a strategic buyer for $48 million.  Sale resulted in full recovery to lender owed $28 million and provided an additional $20 million of monies for unsecured creditors. We were subsequently hired by the buyer to manage the integration of the body armor business into their operations.

Stabilization of cash and working capital management to provide runway for turnaround and/or sale of the business. Supported strategic repositioning initiatives and cost savings initiatives.

Monitored realignment of Amazon-based agreements involving sales through Amazon and Amazon Marketplace to strategically manage distribution and pricing models to improve gross margins.

Positioned Company for recovery to secured lender on outstanding loan debt, following exit of private equity investor.

Served as Chief Restructuring Officer to help wind down operations to a core around which business could be reorganized.

Managed downsizing of operating units managed and updated change-order to obtain recoveries on selected projects and assisted with sale of non-core equipment.

Facilitated downsizing of business to allow reorganization around a much smaller core business.

Negotiated with trade vendors to facilitate an orderly downsizing of business where appropriate and wind-down of other business units.