Phoenix successfully refinances a processor and fabricator of steel and implements a plan to return the Company to profitability.
Phoenix’s client was a $20 million processor and fabricator of Tool Steel and Flat Steel Plate based in Pennsylvania.
Due to underutilized operations, both domestically and internationally, and an overall downturn in the machine tool industry, the Company’s senior lender required the Company to engage a crisis manager to advise the Company on its strategic options.
Phoenix was engaged and quickly recommended a plan to return the Company to profitability, which included the sale or liquidation of the European plant. Phoenix also identified and implemented numerous cost reductions for the U.S. plant and developed a manufacturing forecasting model that identified all manufacturing requirements, including materials, labor hours, direct overhead costs, and inventory levels based on a forecasted sales level. This tool was instrumental in identifying the Company’s operational drivers and managing the Company’s production facility and cash. With the closing of the England plant, and more efficient U.S. operations, the Company began to return to profitability and the Company went from a negative $1.1 million EBIDTA to a positive $3.2 million EBIDTA. Finally, Phoenix refinanced the Company’s debt with a new lender.
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