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 - Manufacturing Company

A manufacturing company with annual sales of $55 million was acquired from a public company by two private equity firms. Although the company was incurring negative cashflow of $500,000 monthly, it owned valuable trade names, distribution channels and technology that the private equity firms wanted to develop and grow.

The controlling private equity firm retained our services to implement an initial turnaround plan to bring the operation to a cash flow breakeven within 90 days. The following action steps were taken to attain the initial goal:

• Rationalized all product brand names and related distribution channels according to our modified Economic Value Added (EVA) formula and eliminated those that did not meet a minimum criteria threshold or were not expected to do so in the short term. This resulted in a decrease in annual sales of $15 million but improved operating cashflow by $2 million annually.

• Reduced the company's operating expenses by $3.5 million annually by a) reducing total headcount by 40%, including the elimination of several management layers; b) redesigning the physical manufacturing plant layout resulting in a 50% decrease in square footage and significantly improved efficiency; and c) reducing inventory on hand by 38%.

• Implemented performance based programs including specific bench mark goals by department which resulted in a) an improvement in manufacturing efficiency of 26%; b) an increase in engineering productivity of 32%; and c) an increase in on-time shipping performance from 75% to 98%.

It should be noted that base sales for the retained core product lines were maintained during this period and, in some cases, increased modestly due to the improvement in the on-time shipping performance.

As a result of the success of the initial turnaround plan our services were retained to grow the business and ultimately position the company for sale within 3 to 5 years. The company was ultimately sold four years later resulting in a significant profit for the private equity firms and the management of the company who were granted options after the initial turnaround period.