Wood Products Manufacturer
A powder-coated wood manufacturer had experienced several years of significant losses and negative cash flow. The owners were discouraged by poor management, shrinking customer base, and rising material costs. The company was in default of its debt covenants with its senior lender. As a job shop, projects were becoming smaller and less consistent. The ability of management to project cash flows and operate the company with any sort of consistent process was difficult. There were significant market opportunities outside of the current customer base that suggest a turnaround was possible. All aspects of the company needed assessment and refocus, from marketing to operations. The company lacked a clear strategic plan to be able to define and implement the needed changes.
DWH was engaged as an interim general manager to perform an assessment of all key areas of the business. Through the DWH assessment process inconsistencies were noted in the financial operations of the business. After further analysis and investigation it was revealed there were irregularities related to management activities. The company was in significant financial distress beyond what was presented to ownership.
Over the following several months DWH implemented a strategic plan that included recruiting new managers and key employees, restructuring the customer base, implementing an inventory control system, and streamlining operations. Through its interim management role, DWH managed the company on a daily basis with a focus on profitability and maximization of stakeholder value. Best practices and process were put in place to ensure the consistent management of the company in the future.
After the several months of active management by DWH, the client company achieved positive cash flow for the first time in its five-year history. With a new management team in place, the company was able to stay focused on its strategic plan and develop new customer relationships that were consistent and ongoing. Not long after, the company achieved profitably on an annual basis. At that time, owners decided to sell the business. DWH assisted with identifying and engaging possible buyers. After a letter of intent was signed, DWH assisted with identifying a deal structure and managed the negotiation and deal facilitation. In February of 2012 the company was sold with a positive outcome for all stakeholders.