Plan Bravo Partners

• 1: Home
• 2: Our Approach
  • 2.1: Business Assessments
  • 2.2: Traditional Management Consulting
  • 2.3: Corporate Finance
• 3: Our Services
  • 3.1: Business Assessments
  • 3.2: Traditional Management Consulting
  • 3.3: Corporate Finance
  • 3.4: Client - Manufacturing Company
  • 3.5: Client - Operations Improvement
  • 3.6: Client - Equity Infusion
• 4: Core Strengths
• 5: Our Team
  • 5.1: Joseph B. Prochot, Partner
  • 5.2: Charles W. Stevens, Partner
  • 5.3: Gregory J. Witherspoon, Partner
  • 5.4: Brian S. Hendrix, Associate
  • 5.5: John C. Simmons, Associate
• 7: Contact Us

Case Study - Operations Improvement

A middle market service company with annual revenues of approximately $20 million that had been in business over 21 years was operating at a loss, had a highly leveraged balance sheet and was being pressured by its bank to improve operating performance. The company owner's goals were to improve profitability, reduce leverage on the balance sheet and improve the company's relationship with the bank.

An analysis was performed and several operating and financial alternative were identified that would improve profitability, reduce balance sheet leverage and increase shareholder value. The value added alternatives included:

• The development of pricing strategies to assure minimum gross profit benchmarks on all new contracts and to identify and eliminate unprofitable contracts. This resulted in the elimination of unprofitable sales of $1 million but an increase in gross profit.

• The development of equipment utilization models to identify and monitor underutilized equipment. A portion of the underutilized equipment that was identified was sold and debt was reduced by $500,000 resulting in improved balance sheet leverage.

• The restructure of existing debt including the negotiation of new payment terms and, in some cases, discounted payment amounts resulting in an improvement of available annual cash flow in excess of $1.5 million.

The reorganization of the company's structure including the consolidation of certain operating functions and other overhead costs. This resulted in a headcount reduction of 15% and cost savings in excess of $1 million annually.

An implementation plan was designed and implementation began immediately utilizing the strengths of the owner, management and staff of the company. The implementation of the plan resulted in the company becoming profitable, greatly reducing balance sheet leverage and significantly improving its relationship with their bank.

With this success as a platform a growth strategy was designed and successfully implemented that included internal core growth as well as an acquisition growth strategy. To facilitate the growth strategy $20 million of new debt financing was secured from the company's existing bank and the company was able to acquire five companies over a two-year period that increased revenues by more than $40 million annually.