Project-Based Consulting Services

Case Study: A Skittish Bank Finds Comfort in the Company’s Plan

$25 million Commercial Printing company

Overview

Given the variability in revenue of a project-based operation, a $25 million Commercial Printing company continued to fall short of profit expectations causing its lender unease over the prospects of the organization. The lender requested the Company hire a financial consultant to help develop a turnaround plan.

Solution

With reluctance from ownership, Sutker Moran was hired and instantly plugged itself into the Company’s cash situation to create a 13-week cash flow projection to help gain comfort with the adequacy of the company’s near-term liquidity.  Simultaneously, Sutker began working on a Zero-Based Budget exercise to find the optimal structure of the company.  The resulting plan including downsizing to a two-shift operation, selling excess equipment to pay down term debt, and shifting focus away from identified underperforming segments while investing more resources those segments that were determined to generate incremental profits.  When presenting the financial plan to their bank, it was satisfying to listen to our once-reluctant client explain the zero-base process to our lender.  Based upon the plan, the lender loosened its lending limits. Fast forward a year later and the Company is generating consistent profits, and the upcoming bank renewal will be far less restrictive.

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Case Study: Creating Value in a Distressed Business

$20 million Marketing Agency

Overview

Given market conditions, an eroding customer base, and the recent flight of good employees, the president of a $20 million marketing agency was at her wits end as she foresaw the organization continuing to deteriorate.

Solution

Hired by the organization to assess their situation and provide strategic alternatives, Sutker Moran, through developing comprehensive income statement and cash flow projections, determined given the critical nature of the situation an expedited sale of the company was the best path to maximize the value of the organization. Sutker worked closely with remaining key members of the organization as well as with various members of the ownership group who had diverse opinions to obtain insight on how best to craft a Sales Memorandum that conveys the Agency’s value. Sutker contacted several buyers and was able to identify two interested parties. Sutker then skillfully negotiated a very attractive sales price from this buyer that provided the ownership group a satisfying return on their investment, especially given the circumstances.

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Case Study: If Distressed, Start from Scratch

Overview

Due to a dramatic industry slowdown,  a recently acquired $4 million training firm was incurring substantial losses, having difficulty repaying its acquisition term debt, and heading towards insolvency. The lender was requesting financial information that the lead accounting person at the company did not have the wherewithal to produce.

Solution

Sutker Moran was hired to assess the situation by developing financial projections as well as construct a turnaround plan. In a period of one week, Sutker Moran facilitated a zero-base budgeting exercise with management which started from scratch and brought back segments of the business that were profitable as well as identified opportunities for profit improvement. Unthinkable when we were first engaged, the actions taken because of the exercise allowed the company to continue to operate as well as provide comfort to the lender to maintain support while management seeks to revitalize the revenue base and ownership seeks equity investors.

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Case Study: The Controller’s resignation leads to the discovery of financial misstatements. Then, profit-enhancing actions.

Overview

When the Controller of a $11 million fabricator resigned, the Company’s lender referred Sutker Moran to ownership/management. Once hired as the Company’s CFO/Controller, Sutker performed a high-level review of the financial statements where they recognized liquidity was very tight, profitability was minimal, and inventory continued to rise.

Solution

Sutker began its onboarding process of reconciling every balance sheet account. During this process, Sutker identified a significant overstatement in inventory. The restated financial statements revealed the Company was losing money.

Sutker and management conducted a thorough analysis of the business resulting in $600,000 of profit enhancements that included position eliminations, insurance cost reductions, and reductions in discretionary expenses. Sutker further helped enhance liquidity by facilitating the restructuring of the Company’s bank term loan, saving $50 thousand per month.

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Case Study: Mapping Out the Solution allows for a Triumphant Return

$10 Million Restaurant Group

Overview

COVID-19 and the resulting capacity restrictions brought a successful restaurant group to its knees. Ownership as well as the group’s lender questioned its viability.

Solution

Working with ownership/management, Sutker Moran developed financial projections for each restaurant, modeled to easily evaluate various scenarios given the uncertainty of the situation. Sutker, then, analyzed various components of the operation which was used by management to identify cost reductions. After incorporating these reduced costs into the projections, Sutker modeled the payment deferrals it needed from its lender and landlords in order to survive. Armed with a plan, Sutker was able to negotiate and agree upon a deferred payment plan from its lender as well as its landlords. These deferrals allowed the restaurant group to survive until obtaining government relief and the eventual lifting of capacity restrictions.

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Case Study: The Bank and The Company Working Together to Solve a Problem

$100 Million Trucking Company

Overview

A historically profitable $100+ million provider of temperature-sensitive transportation services lost a major customer. Coupled with the downturn of the oil and gas fracking industry, the Company had severe liquidity issues.

Solution

Through various financial analysis and working with the management team, $6.1 million in profit improvements were identified and implemented. Through negotiations with each secured lender, the annual principal and interest payments were reduced by $5.3 million or $442 thousand per month. The Combination of profit-enhancements and principal re-amortization provided sufficient liquidity and resulting profitability.

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Case Study: Dominant “Partners” almost Kill the Business

$30 million Packaging Company

Overview

The two largest customers, representing 86% of revenue, dictated the pricing of a $30 million Specialty Cheese Packaging business. One of these customers also supplied 71% of the raw cheese purchased used in production. These dominant “partners” were putting a stranglehold on the business resulting in lackluster performance and drained liquidity.

Solution

The first step was to improve operations – implementing various manufacturing efficiencies, reducing production capacity, and eliminating non-essential personnel. Next, it was time to convince ownership to push back on the major customers, one of which was supplying a majority of the raw cheese. Either our “partners” would allow us to make money or would lose a good supplier and, in one instance, also a good customer. The Company entered into a tolling arrangement with the largest customer and negotiated price increases with the second largest customer. These steps would dramatically increase margins and eliminate a significant amount of cash required to pay for product. Through these restructuring actions, the Company’s’ operating deficit was reversed the following year.

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Case Study: Does this business really work?

$20 million web-based furniture maker

One of the two owners of a Company that was in the very mature age of its business cycle but cash flowing began to invest in a start-up business in a potentially burgeoning market. After several years of consistent losses and several million dollars invested, both owners questioned the viability of the business model. Sutker Moran “locked arms” with the Company’s management team and helped them make significant restructuring moves such as the elimination of a low profitable, resource-draining royalty relationship as well as non-productive sales representatives while constructing a working senior management team structure and creating methodologies to identify and convert excess inventory into cash. Even though Sutker played a small role in Company’s future success, we are proud to say we helped the management team build the foundation to allow it to have doubled in size and consistently generate millions of dollars in annual profits.

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Case Study: Beginning With the End in Mind

$100 million printer

Overview

A multi-division printing company wanted to develop an operating plan for its upcoming fiscal year.

Solution

Sutker introduced its results-oriented business planning process which included surveying key personnel regarding the marketplace, operations, personnel, and organization, working with the Company’s management team to, based upon the survey results, identify and analyze key company attributes, weaknesses, and opportunities. Based on this assessment, Sutker helped the team develop strategic goals. Then, “drilled down” to specific action steps to attain these goals as well as determine key result measures to assess their progress.

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Case Study: Costing Analysis Key to Reinstating Profitability

$12 million plastic injection molder

Overview

A $12 million injection molding company was minimally profitable mainly due to the inability to pass through significant material price increases.

Solution

Through a zero-base exercise, eight unnecessary positions were identified and eliminated for a net annual savings of $450,000. We also conducted a lengthy activity-based cost analysis and discovered opportunities for $750,000 in annual price increases. A minimum order requirement was established for non-major customers, eliminating unprofitable short production runs. In addition, activity-based set-up charges were instituted to encourage major customers to order in larger lots.