Case Study:
Name Brand Tech-Centric Consumer Product Group
Successful stabilization & then turnaround of a national market leader struggling with profitability, liquidity and devastating unforeseen harm to margins due to tariff escalation.
The Company is a perennial leader in its space, with prominent presence at Home Depot, Lowe’s, Ace Hardware, Menards and similar big box hubs.
It invested significant monies into research and development to expand its product base and followed some flawed professional advice as to capital markets that resulted in significant cash outlays and recurring expense that drained its liquidity. Recent tariff conflicts cost them $3M in a six-month period.
They fell into an over advance position which led to forbearance and threat of foreclosure. HP assessed the enterprise and provided a comprehensive analysis, and forward-looking perspective that re-opened the revolver, provided an extensive runway for a capital raise and a vision of a profitable enterprise and an appropriate bridge plan.
HP created a window for the company to complete a production and supplier transition that mitigated tariffs while helping them exit (go dark) the decision to operate as a public company to pursue a private offering and then altered their procurement process to optimize their inventory and create needed to liquidity to attract equity and debt players.
The Solution
Performed a comprehensive financial review of historical and prospective performance.
Created a financial illustration highlighting a post-tariff, post public entity with a profitable streamlined operative structure.
Provided a completely new insight as to collateral value and true risk position of the lender as to Mexico operations.
Established a credible and reliable cash flow tool and routine reporting structure for a predictable view of performance.
Quickly aligned management for a joint effort to enhance insight into performance and opportunity and drive change.
Initiated a department-by-department assessment effort combined with a SWOT analysis & zero-based budgeting effort.
Drove intradepartmental coordination and eliminated operative silos and the adverse effects of that condition.
Led planning, budgeting and operational optimization in a collaborative environment through ideas, follow-through and leadership not mandates.
The Results
Fundamentally altered Lender’s view of the Company creating new pathways and opportunities.
Lender provided an interim over advance pursuant to an HP financial plan that enabled the Company to maintain production and achieve its sales goals as well as customer relationships.
HP secured considerable concessions in forbearance to create a path to a lender exit including onboarding of an IB resource.
HP operating as an insider (not outsider) fostered numerous value add opportunities as external liquidity was pursued.
Company secured a replacement lender that is now funding its new product offerings and growth plan.
Services & Roles
Chief Restructuring Office
Financial Advisory
*Some engagements may have been performed by team prior to joining Harney Partners.
