Case Studies

Downsizing Distributor of HVAC Equipment

J.S. Held Acquires Shechter & Everett to Expand Forensic Accounting Capabilities for Family Law Disputes in Florida

Read More close Created with Sketch.
Home·Downsizing Distributor of HVAC Equipment

The Situation

Distributor of HVAC equipment. Revenues $30 million, down from $47 million. $6 million debt. The owner leveraged the company to buy out family members at the height of the market. The vendor representing 70% of the business is also a secured lender in the inventory.

  • Efforts to maintain revenues led to increased credit risk, slow payment, and ultimately, many customers going out of business.
  • Inventory held at historically high levels even in the face of revenue declines.
  • Buyout of family members allowed sales and marketing functions to languish.
  • The bank’s $10 million note was deemed to be at significant risk.

How We Advised

The owner was removed from day-to-day decision-making, and our experts were installed as CRO to help management.

  • Forbearance agreement with Senior Lender.
  • An aggressive, market-oriented inventory management system was implemented.
  • Implemented professional sales and marketing program.
  • Installed professional collections procedures and policies.
  • Senior Lender and key vendors supported the turnaround process.
  • Inventory rationalization reduced inventory by 35% in four months, resulting in no margin loss.
  • Professional marketing and sales performance helped grow the customer base toward more professional, faster-growing customers.
  • The lender paid down $7.4 million, versus the initial recovery estimate of $4.5 million.

Key Contact

Dan F. Dooley, CTP 
Senior Managing Director 
Strategic Advisory Practice 
+1 603 660 8952 
[email protected] 

Related Practice Areas

> Chief Restructuring Officer (CRO) and Interim Management Services 
Our experienced C-suite interim executives advise and support companies in financial distress, experiencing hypergrowth, or that are challenged by critical vacancies among senior leadership. Whether the leadership void results from operating challenges, a recent officer resignation, the need for added support during busy periods, or during an extended job search for the right permanent hire, our experienced executives provide immediate relief and value. 

 

> Turnaround and Restructuring Services 
Navigating the many challenges confronting a company in transition requires an operationally focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. Drawing upon decades of experience in the turnaround space, we help companies in transition identify practical strategies to improve profitability and liquidity for immediate relief, while concurrently developing and executing a comprehensive turnaround plan for long-term, sustainable value creation. 

Our Experts