Case Study:
Specialty Material Transportation
Provided turnaround services to specialty transportation company to reduce costs and resume profitability.
$114MM transportation provider of specialty materials throughout the U.S. operated from 15 terminals and corporate offices with 680 employees and serving 136 active customers, where the top ten represented 80% of total sales. Although historically profitable, the Company faced challenges because of the loss of a major customer, a seasonal flattening of sales volume, and the significant downturn in a primary market for its customers (oil and gas fracking). This left the company with $74MM in long-term debt to 15 secured lenders and $1.8MM in monthly principal and interest payments.
The Solution
Implemented best practices in liquidity, management, greatly improving cash flow
Restructured long term debt via negotiations with each secured lender.
Mapped out comprehensive profit improvement opportunities through close analysis of the P&L.
Determined profitability-by-terminal and identified the most profitable opportunities for incremental sales.
Rationalized the sales base considering customer mix, business segments, terminal locations, and total headcount and analyzed the fixed cost structure to implement cost reductions.
The Results
Reduced annual principal and interest payments by $5.3MM ($422K per month).
Developed a $6.1MM profit improvement plan that would improve the prior-year’s loss of ($3.8MM) to a profit of $2.3MM.
Services & Roles
Turnaround and Restructuring
Financial Advisory
*Some engagements may have been performed by team prior to joining Harney Partners.
