Case Study

Community Healthcare Clinics

Non-profit, 31 community-based healthcare clinics.

Revenue

$118 million

Industry

Healthcare, Retail

Services Provided

Turnaround & Business Restructuring, Enterprise Performance Improvement, Capital Solutions

Situation

Deep covenant default resulting from substantial operating loss, excessive leverage, and non-compliance of loan and financial reporting requirements. Management had prepared a plan to remediate the business operations but was unable to reconcile planned improvements to obtain profitability. Company asked to exit bank because of excessive debt and significant operating losses.

Accomplishments

  • Completed detailed historical financial data analytics to determine root causes of operating losses.
  • Evaluated the company‚Äôs existing turnaround plan; monitored and communicated progress to lenders and stakeholders.
  • Developed, implemented, and monitored 13-week forecast model as a tool to monitor cash collateral roll-forward on working capital, and debt service and amortization on a complex $98 million debt structure for the lender group.
  • Assisted the company in developing a detailed budget model, based on a roll-up of 31 locations and operating unit detail, including encounters, adjustments to rates, staffing levels, and tracking of Medical, Medicare, and governmental grants.
  • Completed a thorough analysis of operations to identify additional performance improvement processes, including reduction of labor costs, improvement of service efficiency, establishing performance objectives by service division.
  • Developed and managed exit financing presentation and diligence materials for a $17 million refinancing with potential lenders.
  • Using combined financial and operating data analytics, EMAGroup was able to evaluate trends from comparative historical performance, and to evaluate service line and operating unit profitability.
  • Advised senior management team on strategic decision making; providing management with appropriate data and associated analytics to make informed decisions.