Business trouble can arise quickly and for a variety of reasons. Companies may suffer from missed market expectations, reduced operating profit or severe cash problems. Whether triggered internally or by marketplace dynamics, distressed situations can be managed.
Alignment of Strategies and Improvement Plans with stakeholders. Design of organization (including equity/debt structure), management structure/ operating/ budget plans and Improvement Plans (teams, allocation of responsibilities, new leadership team and incentive/retention plans) and Reporting models with effective corporate governance and tax strategy.
Cash management should become a core competency and managed by a specialist; this goes beyond the 13-week cash flow forecasting. Orderly ordering, spend and standardization of accounts payable; careful management of inventory; and improving accounts receivable for cash collection opportunities culture should be careful monitored by KPI’s and incentivized by realignment of management incentives (e.g., salesmen for cash collections rather than on orders).
Financial restructuring should encompass the honest and intense appraisal of valuation and the debt/equity structure but also the operating processes and value delivery culture that leads to reduction in debt and cash flow.
Managing and regular communication with energy of “right first time” changes in vision, culture, structure and goals and then performance against goals are fundamental to success and trust which stakeholders to organizations. Changes and perceived uncertainties will be quickly judged and rebelled against via irrational actions if deemed poor leading to loss of employees and customers.
Crisis cash management requires deep insights to the reporting and forecasting process that is fundamental to a successful turnaround. Accurate and cleaned up data, active and near real-time communication of key performance indicators via dashboards is necessary to make informed course-corrections to strengthen and enhance strategies and actions.
To quickly boost profitability and cash flow, streamline operations and maximize returns, evaluate all aspects of a business to determine the appropriateness of cost allotted to each area and the ROI of each expense decision for the company. We recommend a ‘zero’ based budgeting approach to costs, customers/ products, locations and procedures/ tasks.
Business diagnostic review of distressed human services case management licensing government contractor ($70M of revenue)
Business diagnostic review of distressed grounds systems government contractor manufacturer ($275M of revenue)
Carve-out & pro-forma cost base & sell-side due diligence ($1.3B revenue, Chapter 11)
Performance improvement of $3.5B government contractor
Creditors advisory for $2.4B distressed international glass manufacturer
Advisor (restructuring and refinancing) to CEO and board of distressed $60M athlete wear retailer
Business diagnostic review of distressed C4ISR government contractor ($180M of revenue)
Business diagnostic review of manufacturer of satellite systems, government contractor ($240M of revenue)
Business diagnostic review and projections of scientific, engineering and IT solutions government contractor ($730M of revenue)
Restructuring Advisor to investors in a residential real estate investment
Creditors advisor for unsecured creditors of $530M housing parts manufacturer.
Creditors advisory for SunTrust on LandAmerica with $2.7B of revenue.
Debtors restructuring advice for $6.5B company.
Business diagnostic review of owner and operator of timeshare vacation properties ($800M of revenue)
Performance improvement of a distressed government contractor
Business diagnostic review and projections for multi-site Medicaid dentistry $100M company in default of debt covenants
Business diagnostic review of timeshare and hospitality company ($800M of revenue)
Disclaimer Note: Certain transactions listed above were effective by principals of Farrell Advisory prior to the date they joined the firm